Fidelity Flex

[almost_there]

My company has a 401k plan with Fidelity. Next month we are changing to "Fidelity Flex". Basically they will map our existing funds to equivalent fidelity flex funds. These funds are supposed to have an expense ratio of zero. This sounds like a good thing. The funds seem to be newly created. For instance from the prospectus of FDFIX:

Performance history will be available for the fund after the fund has been in operation for one calendar year.

Has anybody had this happen to their Fidelity 401k plan? Any surprises?

[braumeister]

Quote:

Originally Posted by almost_there These funds are supposed to have an expense ratio of zero.

Anything that sounds too good to be true …

But I would guess they have some decent fees built into administration of the 401(k) program.

[almost_there]

Quote:

Originally Posted by braumeister Anything that sounds too good to be true … But I would guess they have some decent fees built into administration of the 401(k) program.

The company is going to pay the fees. It does sound too good to be true but I understand that Fidelity is feeling lots of heat from Vanguard so maybe this is their response.

[Bamaman]

Many companies pay the fees, and that's why they make retirees move 401K funds into IRA Rollover accounts--even if at the same investment firm.

But I've never seen them move the funds into a one single fund--and not give the employee decision making capabilities with 5-10 funds at a minimum. If that fund doesn't produce, the company could possibly have legal problems if employees came back on them.

[bw5972]

Quote:

Originally Posted by almost_there My company has a 401k plan with Fidelity. Next month we are changing to "Fidelity Flex". Basically they will map our existing funds to equivalent fidelity flex funds. These funds are supposed to have an expense ratio of zero. This sounds like a good thing. The funds seem to be newly created. For instance from the prospectus of FDFIX: Performance history will be available for the fund after the fund has been in operation for one calendar year. Has anybody had this happen to their Fidelity 401k plan? Any surprises?

Looking a Morningstar (great site for info on funds) they show fees of 0 for FDFIX.

FDFIX Fidelity® Flex 500 Index Fund FDFIX Quote Price News

[euro]

Quote:

Originally Posted by Bamaman Many companies pay the fees, and that's why they make retirees move 401K funds into IRA Rollover accounts--even if at the same investment firm. But I've never seen them move the funds into a one single fund--and not give the employee decision making capabilities with 5-10 funds at a minimum. If that fund doesn't produce, the company could possibly have legal problems if employees came back on them.

I don;t think that's what OP said. Instead, they will map each non-Fido fund to an equivalent version of the FidoFlex. My assumption is that expenses are zero because Fido is waiving them for these new startup funds. Not uncommon. I would not have any concerns about this - very slim chance that Fido will screw these up.

[OldShooter]

Quote:

Originally Posted by euro I don;t think that's what OP said. Instead, they will map each non-Fido fund to an equivalent version of the FidoFlex. My assumption is that expenses are zero because Fido is waiving them for these new startup funds. No uncommon. I would not have any concerns about this - very slim chance that Fido will screw these up.

I agree. I think this is probably a good deal for the OP, assuming he gets access to at least a total US market fund and a total International market fund.

It's not at all uncommon for fund companies to buy down fund fees for at least a while. I have never seen them bought down to zero before though. Sounds like a deal. The fund prospectusus (prospecti? ) will explain the details of the fee situation.

[Scuba]

Quote:

Originally Posted by OldShooter I agree. I think this is probably a good deal for the OP, assuming he gets access to at least a total US market fund and a total International market fund. It's not at all uncommon for fund companies to buy down fund fees for at least a while. I have never seen them bought down to zero before though. Sounds like a deal. The fund prospectusus (prospecti? ) will explain the details of the fee situation.

+1 sounds good

[bUU]

Quote:

Originally Posted by Bamaman If that fund doesn't produce, the company could possibly have legal problems if employees came back on them.

It is a S&P500 indeed fund. There's not much to hinge blame onto the company.

[RetNE]

My wife's company recently renegotiated their retirement account arrangements with TIAA and Fidelity. One outcome is that each company will now offer a range of Vanguard funds, including their 4 basis point ER institutional 500 Index fund, along with new, lower ER funds from TIAA and Fidelity.

As a very reasonable offset to the lower ER fund offerings, Fidelity will charge a flat $60 per year management fee to each employee's account. However, TIAA's fee will be .06 basis points. The fees come out the same for a $100K retirement account, but my wife, close to retirement, has more than $1M in her TIAA account. She promptly transferred all of her account to Fidelity. We were very surprised by TIAA's management fee pricing strategy.

[bUU]

Quote:

Originally Posted by bUU It is a S&P500 indeed fund.

index fund! Damned autocorrect!!