Company 401k Plans
- SteveT
- Heinz57
- Mark_J
- Mark_J
- JenL_3
- Heinz57
- JenL_3
- TimYounkin
- TimYounkin
- Mark_J
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» SteveT - Fees
I am looking at a proposal from a local banks trust department. They propose a one time fee of $1500 to convert our present plan, $500 annual fee, $50 yearly fee per participant including daily valuation via phone. $150 annual testing fees. We are expecting our employer to cover this costs. Also a $25 distribution fee and $100 per loan set-up fee. We would expect the employee to pay these fees.We will be able to choose from many but not all funds from American, Federated, Goldman Sachs, Fidelity, and Vanguard. Also a couple from Dreyfus,T-Rowe-Price, Janus, Franklin, and Templeton. ALL Loaded funds would be class A shares purchased on a NO LOAD basis for our plan.
This is a far better plan than our current plan which was set up as an annuity investing in low risk low return Investment contracts. we have 83 employees and 64 are in the current plan. I am optimistic.
-- posted by SteveT
» Heinz57 - Starting to do homework on this subject.
I'm about to start focusing on the options I'll have at retirement, regarding both my 401K and pension. This is 5-7 years away.Ideally, I'd like to lumpsum on the pension, and move both sources into the same tax-deferred account(s), and get an annuallized percentage payout.
Anyone have kick-start material they can refer me to?
Less kick, more start. 8->.
Regards
Heinz
-- posted by Heinz57
» JenL_3 - 403b Question
This is copied over from the BB thread:Author: vh1
Date: January 5, 1999 8:43 PM
Subject: 403b
does anyone know about a 403b-seven path to rid oneself of the scourge of forced annuities within 403bs
sorry for repeating the question
vh 1
Any answers for vh 1?.......J.L.
-- posted by JenL_3
» TimYounkin - annuities as retirement plans?
To first answer Heinz question, it is usually recommended to rollover your 401(k) plan into a Traditional IRA when leaving your job. That way you will still keep the tax deferred status. Once you roll that money into the Trad. IRA you can even convert that into a Roth if you pay the taxes.To answer vh 1 question posted by Jen, we have a long way to educate management regarding 403(b) plans and annuities. I read in one Money article that annuities account for 85% of 403(b) and 457 plans; while only one out of four 401(k) plans are wrapped in annuities. This is explained by the fact employees in 401(k) are protected by the ERISA act of 1974, which states management should act in the employees best interest. While some 403(b) plans are mandated by ERISA it is not mandatory.
I suggest reading some articles on this subject, then try and educated management. It is really in everyone's interest to lower plan fees if they are high. Quinn recommends not paying more than 1% in total fees towards the plan. Chances are that nobody even knows how much they are paying in fees because that amount is never shown on your quarterly statements. You'll have to read the prospectus and calculate just really how much you are paying towards the retirement plan.
One discussion at morningstar shows just how one individual is coping with this same problem.
http://www.morningstar.net/nd/ndNSAPI.nd...
Other articles, and calculations can be found on my links page.
http://www.geocities.com/CapitolHill/Con...
Hope this helps- Tim Younkin
-- posted by TimYounkin
» TimYounkin - Way to go Mark
Congratulations! It is nice to hear someone like you made a difference. Maybe some financial magazine will do an article on you.
Any idea how much you will be possibly be paying in fees? I hear T. Rowe Price caters to small company plans now but I don't know how much they charge in fees. I think the individual just pays the expense ratio of the funds they offer.I am sure your co-workers are very grateful also. Just think of all that money you saved them.
-- posted by TimYounkin
» Mark_J - Final Follow-up
Yup, we just got our Schwab 401k forms today to fill out. We also have a meeting with our plan administrator next week. Our first pay period is 1/15.We don't pay Schwab any fees at all, unless we trade stocks. Otherwise, normal Schwab mutual fund rules apply. We have our choice among the Schwab universe of funds in their funds network. And we can also buy stocks.
The 3rd party administrator charges our boss a yearly fee, which he is passing on to us. It's a fixed rate that we'll pay a few bucks every paycheck. Some of the other administrators wanted 1% of your balance every year. Whoa Nellie! And if we went with someone other then Schwab, add in load fees and it gets ridiculous.
There may have been better deals out there, but most 3rd party adminstrators are sharks looking for baby seals to consume. I suppose those adminstrators have to make money somehow, so I'm happy with a fixed rate.
There you go. Thanks again for all the support. Good luck to others in the same boat. Keep this board alive with your stories!!!
-- posted by Mark_J
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