Author Topic: Should I say something (401K, but not mine)  (Read 327 times)

dandarc

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Should I say something (401K, but not mine)
« on: January 17, 2020, 08:22:52 AM »
So, my main client (I'm 1099) just sent out an email with the details of the new 401K plan. Now, I'm not an employee, so this has no impact on me personally. But OOF those are some bad ER's. The S&P Index fund is 0.65% or something. 2045 target fund is a healthy 1.3%.

There appears to be a safe-harbor style match 100% on 3%, 50% on the next 2%, so if you defer 5%, you get 4% matched. Immediately vested.

Seems to accept traditional and Roth, but doesn't separately list after-tax. But it does have in-service withdrawals, up to 2 per 12 month period it says. Appears there is a $50 fee involved.

Company is not huge, but has something like 300 employees. Grew rapidly - the largest of 3 smaller companies acquired 2 others in short order in 2018 - the one I've been working with was at ~70 employees, although they use a lot of sub-contractors on my project in particular. At the all-hands they mentioned they were trying to grow even more rapidly and wanted to get away from 1099 deals (this could impact me, although I'm inclined to tell them to shove it if they want to try and force me into W-2 at the next renewal).

Anyway, I was thinking of sending a "dude, wtf with this 401K?" email, but I probably shouldn't. I know it isn't the worst 401K ever, but the ERs collectively have me pro-actively thinking what my demands would be if it is a W-2 or bust offer come March.

RWTL

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Re: Should I say something (401K, but not mine)
« Reply #1 on: January 17, 2020, 08:25:55 AM »
Unless you work in HR, I wouldn't.  Pick your battles....you never know what led to the decision to choose that vendor.

dandarc

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Re: Should I say something (401K, but not mine)
« Reply #2 on: January 17, 2020, 08:29:05 AM »
Unless you work in HR, I wouldn't.  Pick your battles....you never know what led to the decision to choose that vendor.
Yeah - seems like a quick way to lose the job, and for now I wouldn't mind staying a few more years. If I can stay 1099, no impact on me. Just . . . seems like they could have done better. Then again the "big company" of the 3 didn't even have a 401K pre-merger, so they've made some progress I guess.

RWTL

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Re: Should I say something (401K, but not mine)
« Reply #3 on: January 17, 2020, 08:36:19 AM »
Unless you work in HR, I wouldn't.  Pick your battles....you never know what led to the decision to choose that vendor.
Yeah - seems like a quick way to lose the job, and for now I wouldn't mind staying a few more years. If I can stay 1099, no impact on me. Just . . . seems like they could have done better. Then again the "big company" of the 3 didn't even have a 401K pre-merger, so they've made some progress I guess.

I agree they could have done better.  I've worked in some big companies that picked really bad plans.  My take was that the company received some type of share back based on the high expense ratios charged to the members.  Does anyone know if that type of arrangement is common (e.g. Valic annuities)?