Company 401k Plans

Top 610. Jun 7, 2005 7:29 AM

» oli - Re: Re: I am curious, where are you guys putting your 401k and o

In response to Re: I am curious, where are you guys putting your 401k and or RO posted by AL_W:

Thanks for the response, what specifically do you have in Fidelity. There is so much available with these different companies, thats the problem we are having, is to decide what to put it in. We have 10 working years left.

-- posted by oli

Top 611. Jun 7, 2005 11:07 AM

» Normxxx - Re: Re: Re: I am curious, where are you guys putting your 401k a

In response to Re: Re: I am curious, where are you guys putting your 401k and o posted by oli:

One way or another, and hopefully without the help of a broker or financial planner, you need to learn enough so that the answer to your question becomes obvious to you.

You might start by looking at the "slice and dice" thread.

-- posted by Normxxx

Top 612. Jun 7, 2005 11:21 AM

» allancoleman - Re: I am curious, where are you guys putting your 401k a

In response to Re: Re: Re: I am curious, where are you guys putting your 401k a posted by Normxxx:

Normxxx is right oli . by the time you've moved along the educational curve , you'll end up opening ( and closing sad ) accounts with several different brokers depending on your own personal experiences .

most of the Vanguard's - Schwab's - Fidelity's - and others of the brokerage world offer the same basket of goods and services now a days . i have a Schwab account cause they have an office a few blocks from me . i have a Fidelity account cause i've owned the Magellan mutual fund for years now and did a ROTH conversion through them . and i will open a Vanguard account later cause they are the ' low cost ' provider in their field and admiral class shares ( cheaper smile ) are more easily gotten that way . who you decide to go with , and NOT go with , is mostly a matter of personal choice .

-- posted by allancoleman

Top 613. Jun 7, 2005 12:28 PM

» Kirk - Re: Re: Re: I am curious, where are you guys putting your 401k a

In response to Re: Re: I am curious, where are you guys putting your 401k and o posted by oli:

Fidelity is good enough that you can put it all there as far as I am concerned. I believe they give lower cost index funds now than even Vanguard unless you give Vanguard hundreds of thousands and limit yourself to two switches... these rules make monthly rebalancing a pain in the rear at Vanguard.

The real trick is to look at your portfolio as a whole FIRST and not consider taxes or where you have things until you first total your overall asset allocation. I do this on a spreadsheet that has taken me 14 years to tweak to a format I like. I break it out into asset class, etc... and compare it to what Vanguard and Fidelity say my whole portfolio is allocated to. Mutual funds make it a pain because they often change what they hold. My foreign holdings are much higher than I target now because my value funds have significant investments outside the US! So... it gets to be a real art just figuring out what you hold once you go beyond a simple core portfolio. If you can, it makes indexing with simple index funds really attractive because it is easier to track what you have.

Before you do anything, I'd order and read the first two books in my signature. The first gives plenty of possible indexed portfolios to go along with some of the suggested portfolios in my newsletter.

-- posted by Kirk

Top 614. Jun 7, 2005 7:50 PM

» AL_W - Re: Re: Re: I am curious, where are you guys putting your 401k a

In response to Re: Re: I am curious, where are you guys putting your 401k and o posted by oli:

Oli,

At Fidelity:

FUSEX SP-500 Index Fund
FLPSX Low Price Stock (mid cap)
FDIVX International ( mainly Europe )
FSEMX Extended Market Index ( what's NOT in the SP500 )
FDNDX Total Bond Index
FSPTX Technology Fund
LRCX Lam Research ( my trading stock, currently out)
FLCSX Large Cap Fund - Yes, it's redundant to the SP500 stuff

A very basic well diversified portfolio. Options are limited in the 401K, so I try to round out the portfolio via the IRA.

I'm planning on adding something for dividends, likely to be an ETF.

-- posted by AL_W

Top 615. Jun 28, 2005 1:43 PM

» SteveT - Roth 401(k)

I would urge all that have more than a passive interest in their 401(k) plans to investigate this new option available next year. Looks like in order to implement the change will require some time and paper work. Not saying it is the best way to proceed for everyone but it is always nice to have options.

This site is one source of info. http://www.roth401k.com/ Please share any others you find and talk to your human resources people and check and see if your plan can be altered. If you want to do it effective 1-106 you better start working on it now.

-- posted by SteveT

Top 616. Jun 28, 2005 1:56 PM

» allancoleman - Re: Roth 401(k)

In response to Roth 401(k) posted by SteveT:

excellent post Steve . i check this site often and hope the new regulations will allow me to do a " conversion " from my traditional 401(k) to a ROTH 401(k) similar to a ROTH conversion allowed for IRAs now . present rules don't seem to allow for that . ? sad ? .

-- posted by allancoleman

Top 617. Jul 1, 2005 2:15 PM

» rasputin - Vanguard

July 1, 2005

The boards of trustees of the Vanguard® mutual funds recently approved new redemption-fee and frequent-trading policies for employer-sponsored defined contribution plans served by Vanguard’s Integrated Retirement Plan Solutions group. The policies strengthen our existing safeguards to discourage short-term trading and the harmful effects of market-timing. The new policies will apply to participant exchanges executed after the close of business on September 30, 2005. A summary of each policy is given below, and the enclosed Statements of Policy provide more details.

Updated Redemption-Fee Policies
A number of Vanguard funds, including most international funds and some domestic stock and bond funds, charge redemption fees for shares sold within stated time periods after purchase. These funds will begin collecting redemption fees on certain participant exchanges executed after the close of business on September 30, 2005. The redemption fees will be paid directly to the funds. Please see the related Statement of Policy for more details, including a redemption-fee schedule as of April 29, 2005.

New Frequent-Trading Policy
Vanguard will implement an enhanced frequent-trading policy for all Vanguard mutual funds except money market funds and short-term bond funds. The new policy will prohibit participants who exchange out of a fund after the close of business on September 30, 2005, from exchanging back into the same fund within 60 calendar days. This policy will not prevent regular employer or participant contributions into the fund, not will it prevent a participant from exchanging out of a fund at any time. The policy will replace existing frequent-trading policies. See the related Statement of Policy for details.

Additional Considerations
§ Vanguard will communicate these new policies to your participants in the second and third quarter statements.
§ Relationship managers will contact plan sponsors regarding the application of the frequent-trading and redemption-fee policies applied to participants in qualified plans.
§ The enhanced frequent-trading policy will apply to participants who are currently on restricted status for frequent trading, and they will be notified of the change.
§ The enhanced frequent-trading policy will eliminate the need for letters such as those sent to participants who abused Vanguard’s previous frequent-trading policy.
§ The enhanced frequent-trading policy will not apply to Vanguard Retirement Savings Trust or to stable-value separate accounts

For Plans That Include Non-Vanguard Funds
§ Many of our outside fund partners may implement redemption fees on certain funds for participants in employer-sponsored plans. Where possible, we are attempting to arrange a simultaneous implementation of these fees.
§ Subject to further discussion with our outside fund partners, Vanguard expects to apply the enhanced frequent-trading policy to all mutual funds in your plans that require frequent-trading restrictions. A consistent policy for all funds in your plan’s line-up will aid in participant communication and understanding.

Vanguard believes these new policies will be more effective deterrents to short-term trading, will be easier for shareholders to understand, and will require less involvement by plan sponsors when frequent-trading concerns arise with participants. Together with Vanguard’s other longstanding policies to deter frequent trading, including fair-value pricing and participant communication about the benefits of long-term investing, we believe these new policies will continue to protect your participant’s long-term investment interests.

Please note that this communication is directed to sponsors of defined contribution plans served by Vanguard’s Integrated Retirement Plan Solutions group. If you have other relationships or mutual fund assets with Vanguard, different applications of the redemption-fee and frequent-trading policies may apply.

Your relationship manager will contact you shortly to discuss the implementation of these policies and address any questions you may have. Thank you for your understanding as we transition to these new policies.

-- posted by rasputin

Top 618. Jul 24, 2005 5:23 PM

» bob90245 - Picking funds like picking cereal

Anyone have an "Open-Architecture" 401k plan? -Bob

Picking funds like picking cereal
Happiness is 'lifestyle' funds, and 'Trojan Horse' option too

By Paul B. Farrell, MarketWatch
Last Update: 7:00 PM ET July 24, 2005

RROYO GRANDE, Calif. (MarketWatch) -- Despite hundreds of choices on the supermarket aisles, I stick with the same breakfast cereal I've been eating for over 50 years -- oatmeal.

My guess is that your cereal-eating habits, like mine, would tell us a lot about how you invest in mutual funds. I'm a keep-it-simple guy. To me, reading data on fund prospectuses in the mutual funds supermarket would be about as nutritious as reading the labels on a box of Frosted Flakes, Puffed Wheat or Cap'n Crunch.

Maybe you're like me. Who needs 10,000 funds? Ten, six, even one is enough. While too many choices make people anxious, I also know investors want lots of choices. That's the American way, right? Like their cereals, they want to explore, search and experiment.

Walk down the aisle of your 401(k) plan and you'll see what I mean. Fund companies managing corporate 401(k) plans are less effective than cereal manufacturers in satisfying our human tastes.

If you want lots of choice, you'll probably be disappointed -- too limited or never enough. But if you want to keep it simple like me, it's also tough to find the right ones to fit your keep-it-simple "oatmeal" tastes. So today, I've got a few clues to help folks at both ends of what I call the "cereal-box" spectrum of investor psychology.

Monopolies limited your options

A few short years, the main criticism of 401(k) plans was that the "plan managers" (banks like Wells Fargo or fund companies like Fidelity, Vanguard and T. Rowe Price) offered very limited menus, usually a dozen or less, and only their own proprietary funds.

You knew there were better funds out there in the vast universe of mutual funds, but the attitude of the plan manager and the "plan sponsor" (your company) could be wrapped up as: "take it or leave it." Your company gave its plan manager a monopoly that wasn't the best deal for employees.

Back then, a few plan managers did offer employees access to their "fund supermarket," a network of funds from other fund families who pay to get in the network list. You'd get some more funds, but you either paid an extra fee or there was some sort of quiet "rebate" from the selected fund companies paid to your plan manager.

Some plans also offered employees "self-directed brokerage accounts" as an add-on option. You got unlimited access to all markets, but you paid an annual fee.

Secrets of the 'Trojan Horse'

A few years ago, I learned about a hush-hush "Trojan Horse" option from the 401(k) experts at Schwab. Turns out there was a way to sneak several Schwab or Vanguard or T. Rowe Price funds into a plan managed by Fidelity, for example. And you didn't have to pay extra.

And it's so easy! A simple technology called "Open-Architecture" was available all along that gives any employee in any 401(k) plan in any American company a way to consolidate all their accounts in one location and also access to all financial markets and every other fund company. But most companies didn't know about it.

So why the secrecy? Because by keeping the hush-hush Open-Architecture option a secret, a plan manager could maintain its monopolistic hold over a company's 401(k) plan and its employees. In fact, several sources tell me the competition to get lucrative 401(k) plan-management contracts is so intense that not only do very few American workers know about the Open-Architecture option, most corporate executives who pick and hire a plan manager also are the dark.

Secret goes public

Today, though, some fund industry leaders are beating the drum: "Open Architecture provides investors with centralized access to products from many plan sponsors," writes Robert Pozen, chairman of Boston-based MFS Funds, in his book, "The Mutual Fund Business."

This former vice-chairman of Fidelity Funds calls this "one of the most powerful forces in the mutual fund industry" because it makes it "hard for any single fund complex to monopolize customers," while better serving investors. Unfortunately, monopolies die hard, so the O-A option is still not as well-known as it should be among employees and corporate executives managing their 401(k) plans.

So here's my suggestion: If all this is new to you, and you'd like more choices in your 401(k) plan, walk into your boss's office tomorrow and suggest the company get out of the dark ages of technology. Open-Architecture's been around for a while. It's about time fund companies stop hiding it from investors.

-- posted by bob90245