401k - who sets the rules?

[katsiki]

My employer is switching to a new 401k provider.  I am wondering who makes the "rules" on what is allowed in the summary plan description.  Is it the 401k administrator/provider, or does the company have input?  I am wondering if I can suggest favorable items like in-service rollovers, etc.

Thanks for any advice.

[sokoloff]

It's a mix. Not every 401k administrator supports every feature, but the larger ones mostly do.

The benefits choices (including fees to the provider) are a negotiation, where the company has a certain amount of control.

If the company is in the negotiations discussion with other providers, that's the optimal time to suggest changes. If they literally just wrapped that up and announced the new provider to the company, that might be a much less flexible time. ("We just spent time and money on that issue; let's get back to our actual business now rather than spending more on 401K topic.")

[katsiki]

Thanks for the info.  It seems early enough to make some suggestions.

Any recommendations besides the one I mentioned?

[bognish]

The total value of assets in the plan also makes a big difference in how much leeway a company has in designing a plan. If its a small company with under $3m total 401k assets you get no options an few providors will support the plan. $4-5M investment company's will bid on your plan, but the biggest (Fidelity etc) won't be too serious and fees will be high.

Another factor is the make up of employees and how many participate in the plan versus other benefits. My company is a factory with mostly blue collar workers. Since we have a fixed budget for benefits its better to make health care costs lower than spending the same dollar amount on lowering 401k fees that only a handful of employees use.