I don't suppose your company is small enough / at the right point in the process for you to influence the plan details?
Unfortunately no. This was a decision made by the board of directors. I'm just a wee minion, but I did point it out to my boss. People were all jacked because the company was going to pay the flat, administrative fee...something like $30 per employee. Which, yeah that helps, but you're missing the much bigger cost
So the new plan has a 1% AUM charge on all assets and you no choice to opt out? That doesn't sound right. Is that even legal?
It would appear so. I'd love to be proven wrong here, but this percent of assets thing is apparently silently going on behind the scenes. I was surprised too, and then I looked at our current, soon to be old plan, and found out they were quietly taking 1.4% of assets under management. So it's an upgrade I guess. We have a plan administrator (local bank) who will apparently manages it all for us and in turn at least offers nice Vanguard index funds. Believe me, I'll check with the bank representative to make sure I'm understanding this 1% AUM correctly and will report back. The thing is I at least see when an administrative fee is deducted with the current plan. But this percentage of assets thing seems totally sneaky IMO
those fees you pay are also paying for the administration of the program itself, in whole or in part. You are asking to escape without having to pay the toll.
I'm totally on board with paying a transparent administrative fee. I'm not sure I'm on board with a fine print AUM% swipe. It's not all bad, we get legit index fund options, company is covering the administrative fee, but I just can't get past this 1% AUM fee, unless I'm incorrect. Once a senior employee's balance gets massive you start to incentivize people to leave. Not that many people bother looking at the fine print. Looking forward to the meeting to bring this up! Also, the AUM% does decrease once the entire plan balance reaches a certain threshold. Chalk up another reason to FIRE