401k administrator conflict of interest?

[Surewhitey]

So the company 401k is administered and managed by John Hancock via the owner / owner's son. The fees for funds start at 1% for Vanguard S&P 500 to over 1.5% for any options. The company employs 100+ employees and I've always worked for this size company.

In my past experience, I've paid a tiny amount for any S&P 500 fund in any 401k and never 1.42% in a guaranteed cash option (current fee).

It just seems like a very onerous fee structure and it's suspicious that the owner's son is likely benefiting from this. Any opinions here?

She is a silent owner, currently run by another son of the deceased owner. She also is part of the investment management...

 

[braumeister]

What kind of company match do they give you?

 

[Fedup]

One of my previous company was sued in a class action suit for similar things but I only got a measly check, less than$100. So what can you do? Can you find another job?

 

[Surewhitey]

1%.

If it were 3-6% I'd not think much of it. 1% more in fees than I should pay annually on my balance can get pricey as I prefer to take full advantage of it. After 2 years, I'm paying them $340 in fees. After 10 years, I'm expecting that to be $2,500-3000+ annually.

 

[Surewhitey]

Another job, yes. Lots of red tape to deal with. I like my j*b for the most part. I just don't like the fox in the hen house idea.

 

[target2019]

Smells fishy. What's the match? Just get that and use your Roth-IRA and taxable accounts.

 

[Surewhitey]

Smells fishy. What's the match? Just get that and use your Roth-IRA and taxable accounts.

1% match...I think the IRA is the way we'll go for now. Just can't bring myself to enriching people I don't know for a basic service...

 

[Lakewood90712]

IMO, in a small closely held company , you are stuck. Ya, the fees add up over time, and there might be violations.

If things are fishy with owners who are the management, look for another job.

If you are dissatisfied with the company , your feelings will grow worse , not better with time.

Want to raise a stink about it ?, hire a law firm with a $$$$$$ retainer ?

About the only sure outcome will be loosing your job one way or another .

 

[iloveyoga]

I agree, just go up to the match, and then use low cost funds for your IRA. Is there a way you can pass along your feedback on the 401(k) fees to someone as they are too high.

 

[pb4uski]

IRA is the way to go unless the IRA contribution limits are too limiting for you.

 

[Surewhitey]

Maybe a stink when I'm ready to call it quits in hopes of a claw back payoff...not really worried about it for now as I can, at least, control how much I pay in relation to the tax deferral benefit. 1st world problems, right?

 

[Surewhitey]

Yeah, I'll definitely work on the IRA options and reduce the 401k amounts to take full advantage of these...

 

[Surewhitey]

I did mention it to the HR person in charge. She's only in charge to the limit allowed by the current owner, I'm sure. The cookie cutter response told me to "go back to my cubicle, they have it under control"...I have bigger things to worry about, this is just a fly buzzing around my head for now.