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re: Why are 401k platforms so far behind other retirement plans?
Posted on 7/29/16 at 7:53 am to TigerDeBaiter
Posted on 7/29/16 at 7:53 am to TigerDeBaiter
quote:The fees within funds offered by an employer are the same if you buy those funds in your 401(k) or in your own IRA.
But why else are the fees so high and offerings so limited?
As far as limited investment options, most plans that I've seen offer a diverse selection of options with the full range of investment objectives.
The administrative fees an employer must pay to the plan provider are somewhat based on how many investment options are offered. The higher the number of investment options, the higher the administrative fees.
quote:Every plan I've seen have at least one "low fee option" such as index funds.
Why would they not offer low fee options?
If an employer is only offering high fee funds or is not offering a diverse investment selection, then a valid complaint can be made to the Dept of Labor who oversees ERISA compliance issues. This DOL site lists the responsibilities of a plan administrator
ERISA holds the management of a company personally liable if they do not follow the basic standards of conduct and may have to personally restore any losses plan participants experience due to improper use of the plan's assets. That's a very strong incentive for the people in charge of the plan to operate it properly.
Posted on 7/29/16 at 9:06 am to LSURussian
The S&P fund in my 401k has a fee of...0.01%
1 hundredth of 1 percent. That is better than I could find on broker sites. Then we have administrative fees of 9 dollars a quarter. Not bad at all in my opinion.
1 hundredth of 1 percent. That is better than I could find on broker sites. Then we have administrative fees of 9 dollars a quarter. Not bad at all in my opinion.
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