Persuading 401k provider to allow aftertax contribution and inservice rollovers?

[ender]

I recently started a new job and yesterday was a 401k informational session, where I went and naturally asked a lot of questions.

One of the key questions I wanted to know was whether the plan allowed aftertax contributions and inservice rollovers. This would basically give access to $30k worth of extra Roth IRA space, as you can contribute a combination of your deferrals, company match, and aftertax contributions up to the $53k federal limit. The aftertax contribution can be rolled into a Roth IRA, assuming the plan allows inservice rollovers.

The plan does not currently and from what it sounds like, is unlikely to do so in the future (I was apparently the first person to ask the Merrill Lynch plan administrator salesman about this in all of the companies he services, heh).

The answer I got was more or less "not enough people care and we are working on implementing a match first." We do not have a company match currently and total plan assets are only around $15,000,000 or so, which means the 401k provider is only making ~$100k a year or so from the plan (only 4 funds are below about a 1% ER... which is fine, as they have a cheap SP500 fund anyways).

Does anyone have experience in convincing an employer to adopt what will self-admittedly be a function only a limited number of employees utilize?

[Axecleaver]

You're probably out of luck. The change is extremely easy, but it involves some hoops to update the plan paperwork and will cost your company some amount of money to do it (maybe $500). Best bet is talking to your boss about how important it is to you.

On 15m in assets, your plan administrator is making around 450k-600k a year. They have various revenue streams baked into the 401k plan, including kickbacks from funds that they steer your money into, employee fees for participation, loan admin fees, etc. Check this out: http://www.dol.gov/ebsa/publications/401k_employee.html