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Old 10-10-2021, 07:18 AM   #21
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Same here, except no match involved & higher, much higher, fees. We were +1% on every option, even s&p index fund.

The salt in wound was the administration folks were related to the company owner so stunk in extra ways. I made it aware to anyone who was interested (politically politely) and just as I was moving on they switched to a different administrator. I like to think that I had a hand in helping this along, but I still have fond memories of rolling over my account to Vanguard and buying lots of Admiral shares...
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Old 10-10-2021, 07:43 AM   #22
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Originally Posted by SecondAttempt View Post
Quoting Gotadimple but thank you everyone for talking me off the ledge. I'm still ticked off and considering my options. But I think I will stick with my plan to retire in a couple of years. I am leaning now to quietly lobbying over this rather than inciting an uprising. I am close enough to the head of HR, the CEO, and CFO that I think they will listen to me. I don't think they will do anything but I think they will listen. Most of them have been with the company for decades so I'm sure they don't like the new fee any more than me.

Several people have done a pretty good job of estimating my balance and calculating the scale of the fees. I am not upset about mutual fund management fees in general. Fees do influence the funds I select which is why I lean to Vanguard. These new fees though are just a blatant profit grab by the third party administrator! I'm fairly certain that the company is not paying lower administrative fees but that is something that I will ask.
Late to the thread but I think that is a more sensible plan. Another approach with the head of HR, CFO and CEO might be start the conversation asking why the 0.25% fee is being imposed... and why it wasn't in the past. It might be that they were previously subsidizing the cost of plan administration and decided to not do it any longer or subsidize it less. As part of that conversation you might mention that for certain funds that the fee is are going up 2x or 6x... they may not be aware of that.

In the meantime, is there anything the plan offers that is useful? Employer match on contributions? A good stable value fund?

Does the plan allow in-service rollovers? If not, then perhaps they might be willing to a that feature at the same they are imposing the fee.

If the plan allows in-service rollovers and doesn't have a good stable value fund then you might avoid the fee by doing a big in-service rollover.
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Old 10-10-2021, 11:55 PM   #23
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Originally Posted by pb4uski View Post
In the meantime, is there anything the plan offers that is useful? Employer match on contributions? A good stable value fund?

Does the plan allow in-service rollovers? If not, then perhaps they might be willing to a that feature at the same they are imposing the fee.

If the plan allows in-service rollovers and doesn't have a good stable value fund then you might avoid the fee by doing a big in-service rollover.
The match is double what I put in so yes, it's good. The investment options are poor. They previously had almost only load and high fee funds. Now they have a few Vanguard funds including admiral shares for Wellesley and also total stock market and total bond market. So there are good options but most of the options are crap.

The fund company is one of the largest in the US but I don't want to say much more. They have a history in annuities and still try to push them. You can probably make an educated guess. I do not like the fund company but they are not the villain in this specific case. It is the administrator company that is slamming on the new fees.

Edit to add: I will ask about in-service rollovers. I'm fairly certain they do not allow them now but that doesn't mean they won't consider that in response to this new fee. As I said, most in management have a lot personally at stake so they are likely to have self-interest in that option.
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Old 10-11-2021, 12:00 AM   #24
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No employer (I should say most) would suggest such a change without a real good explanation. IMHO
I think you are right. But I suspect the explanation is that they just don't want to confront the custodian.
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Old 10-11-2021, 06:18 AM   #25
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New source of income for ur company
back when i wor$#D they changed our 401k to private non listed funds (instead of Vanguard)
and changed the fixed income (which was pretty good) to a bond fund
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Old 10-11-2021, 08:49 AM   #26
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It’s imperative to read your plan prospectus or at least SPD to know what your options are, esp wrt rollovers.

Megacorp maintained some pretty employee-friendly policies and were pretty good about holding costs down. Their sheer size gave them good leverage with Fidelity. They even transitioned out of all mutual funds into a category of “commingled pools” which were identical but slightly less expensive to manage. When Mega spun off my division we maintained Fido but fund choices and plan policies were slightly less employee friendly. I read the SPD so I knew I should keep the old 401k. The new plan was charging me fees for admin and withdrawals so I dumped it when I retired but still have the Mega 401k.
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Old 10-11-2021, 09:30 AM   #27
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You might raise it forthrightly but politely with the management. The decision was likely taken by some HR or finance drone that doesn't even understand investing returns. They were given a financial target to hit and they did it.

But I wouldn't say to them its going to cost you thousands of dollars. No one is going to work hard to fix an issue for a guy with $1m in a 401-k.

Better to explain to them the aggregate hit to everyone.

For example, show them that if the 401k participants are averaging a 6% return and there is 3% inflation, then they really just took .25%/3% = 8.5% of the year gain they employees make on the investments.

You're unlikely to change the decision though.



Except that accounting drone was tasked with reducing the cost of a 401(k) plan to the company and this is an easy fix...


Do not think that the decision by the company was an afterthought...
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Old 10-11-2021, 10:48 AM   #28
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I would remind management that they have a legal, fiduciary responsibility to ensure that costs are reasonable. Remind them of the DOL regulations:

The primary responsibility of fiduciaries is to run the plan solely in the interest of participants and beneficiaries and for the exclusive purpose of providing benefits and paying plan expenses. Fiduciaries must act prudently and must diversify the plan's investments in order to minimize the risk of large losses. In addition, they must follow the terms of plan documents to the extent that the plan terms are consistent with ERISA. They also must avoid conflicts of interest. In other words, they may not engage in transactions on behalf of the plan that benefit parties related to the plan, such as other fiduciaries, services providers or the plan sponsor.

Fiduciaries who do not follow these principles of conduct may be personally liable to restore any losses to the plan, or to restore any profits made through improper use of plan assets. Courts may take whatever action is appropriate against fiduciaries who breach their duties under ERISA including their removal.

https://www.dol.gov/general/topic/re.../fiduciaryresp
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Old 10-12-2021, 08:34 AM   #29
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Years after I left my last corporate job I got what I thought was quite a hefty check in relation to what my 401k balance had been with the company.

It was part of a settlement for a class-action lawsuit over excess 401k fees.

And that company (a large, regional bank) managed its own retirement plans!
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Old 10-15-2021, 03:46 PM   #30
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Truist Policy SUCKS

My Truist bank charged me a few dollars to cash a small container of coins. This was during the famous "coin shortage". I am not happy with this policy. To put this into perspective, the bank charged me more to cash $200 in change then they paid me interest on over $400k in cash in their bank last year.
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Old 10-15-2021, 03:49 PM   #31
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This probably falls in the category of just a rant but I am really ticked off!

I've posted in another thread that I am just over 2 years from my retirement date but could retire any time if management does something stupid.

Well, today it was announced that our 401k will have a new fee. A fee of 0.25% is being added on top of any fund fees. This is not a load, this fee is applied to our full balance. So I have a very large holding in Vanguard Wellsley Admiral shares that I pay about 0.15% for. Vanguard does the hard work and now plan administrator decides to take 67% more than Vanguard. We get Vanguard total stock market for about 0.05% so the new fee means we will pay 6 times as much for it!

This is on our full accumulated balance with no recourse! I am beyond livid. This will cost me thousands of dollars per year until retirement when I can get the money out.

I am considering 3 options:
- retiring immediately before the new rules go into effect
- making a BIG stink about this to encourage a movement among other employees. I could very well get fired but that's jus option 1 and could be fun
- sucking it up and sticking with my plan. My salary over the next couple of years more than covers the fees but there is a principle at stake here.

Meeting late next week where the stink could begin so my decision timeline is short.

Open to comments but not really seeking advice here, just a rant!
Are you livid when you add up all the money your company contributed to your 401k over the years and how much you made off of it?
Be grateful instead of angry. I never had any benefits in my entire work life. None.
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Old 10-16-2021, 03:35 PM   #32
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Years after I left my last corporate job I got what I thought was quite a hefty check in relation to what my 401k balance had been with the company.

It was part of a settlement for a class-action lawsuit over excess 401k fees.

And that company (a large, regional bank) managed its own retirement plans!
That must have been a rather sweet surprise. I recall when banks began treating people as "profit centers" rather than as customers (and the source of much of their capital.)

I still recall when DW's small business kept $20K to $30K in the checking account (lots of cash and checks in each day - lots of EOM bills to pay). The regional bank (that had started years earlier as a home-town bank) wanted to charge DW $3 per night-deposit use. She went as high as she could in the bank organization to protest with no results. So she withdrew her entire account and went to the last "home town" bank in the city. They were happy to provide the night-deposit for free. 6 months later, a bank exec. from the regional called to ask why DW had suddenly closed her account. Fortunately for the excec. DW is neither foul-mouthed nor particularly vindictive. She simply relayed that she thought loyalty should go both ways. After almost 50 years with their bank, she thought they should be more flexible to good customers who make them a lot of money.

I tell this dreary story to suggest we should not be surprised when even our OWN companies take advantage of employees (in this case, overcharging for 401(k) services and treating employees as "profit centers.") YMMV
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Old 10-17-2021, 12:33 AM   #33
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An update...

Meeting was held to explain the new fees. The situation is not as bad as it originally appeared.

What they have done is swapped out funds that had relatively large fees and "revenue share" that went to the administrator for lower cost funds and added a separate fee that is directly charged to each member of the plan. They have taken every fund, mapped it to a new fund with similar objectives and performance, and tried to arrive at an overall lower price.

For example,

Mickey Mouse Global Cartoon Equity Fund (1.25%) --> Donald Duck International Animation Stock Fund (0.68% + 0.25% = 0.93%)

The idea is that the administrator still makes their money (0.25%) and we pay less in general (1.25% --> 0.93%). Overall the average of all funds, notably NOT weighted by how much employees actually invested, went from about 1% to about 0.7%. Of about 50 funds only about half a dozen have higher fees after the change.

In my case though Vanguard Wellesley Admiral shares is one of them and will be about 5 times more expensive since they are available extremely cheaply.

They noted that they no longer get any revenue share from any fund so they have no financial incentive to recommend any fund over another when advising us, which is available but I have never used.

I am less angry/annoyed about the change but still need to evaluate what I do personally. It might be better to adjust across several accounts to get low cost funds at work and get my Wellesley fix in other accounts.

I recognize this was a sales pitch by seasoned salesmen but I will give them some credit. We have fixed annuities available. There were some questions from employees about those. They generally poo-poo-ed the annuiies because of the surrender periods saying the main attraction is lifetime income and you can roll into them at retirement if you choose. They said if you want to be ultra conservative until then there are better options in teh avaialable funds.

They also said that this is an industry trend toward transparency. By showing fees as a direct charge on quaterly statements it is more transparent.

They said my employer shifted the administrative fees to entirely employee paid many years ago. They claim the total amount they receive is a little higher this year but a lower percentage of total assets.

The presentation was mostly devoid of numbers except a list of individual fund fees. But we get a report every year stating the total plan details like amount invested and total administrative fees.

Thanks to everyone who pointed out that I have it relatively good and should be thankful and also talking sense that I should not overreact.
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Old 10-17-2021, 06:40 AM   #34
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Glad you took the time to “Aim” before shooting. Makes sense.
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