Author Topic: Employer switched to Trans America  (Read 1113 times)

RookieStache

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Employer switched to Trans America
« on: October 19, 2018, 11:01:04 AM »
My employer just switched to Trans America and I have the following options:

                                                              YTD   10 year
Janus Henderson Triton T                              8.843   18.14
Stable Pooled Fund                                      0.82   1.84
American Beacon Bridgeway Lg Cp Val Inv     -0.95   9.98
Transamerica Small/Mid Cap Value R6              2.22   9.08
Invesco Real Estate R5                              0.89   7.69
Goldman Sachs Intl Eq Insghts Instl             -1.91   3.51
Wilmington/BlackRock EAFE Equity Index R     -2.44   2.86
American Century One Choice 2060 Inv     1.17   11.53

Threw this together real quick so just have YTD and 10 year. Choices aren't the best. Janus Henderson is small cap/mid cap that looks enticing. Initial thoughts would be 75% 2060 fund, 25% Janus Henderson.

What would you all do here?

RWD

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Re: Employer switched to Trans America
« Reply #1 on: October 19, 2018, 11:25:32 AM »
Threw this together real quick so just have YTD and 10 year. Choices aren't the best. Janus Henderson is small cap/mid cap that looks enticing. Initial thoughts would be 75% 2060 fund, 25% Janus Henderson.

What would you all do here?

Those two both have a 0.92% expense ratio, it looks like... I assume the expense ratios on the others aren't any better? That is robbery.

Do you have a match? Are in-service rollovers allowed? How much longer do you expect to be at this employer? Are you eligible for a traditional IRA? Do you have existing funds that need to be invested in these options?

thd7t

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Re: Employer switched to Trans America
« Reply #2 on: October 19, 2018, 01:06:14 PM »
Ask for a broad index fund.  You have nothing to lose and it has worked for me.  They may have to lose one of the other funds, but they're not great anyway.

chasesfish

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Re: Employer switched to Trans America
« Reply #3 on: October 20, 2018, 06:12:24 AM »
Can you post each expense ratio and inquire with your HR/Plan Administrator if they offer a broad market index fund?

If you don't like your employer or plan on leaving, I'd file an ERISA complaint at those fees.  Could be contentious if you like your job :)

MustacheAndaHalf

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Re: Employer switched to Trans America
« Reply #4 on: October 20, 2018, 09:28:01 AM »
What is the expense ratio for "Wilmington/BlackRock EAFE Equity Index" in your plan?  The current management fee is listed as 0.06% on bloomberg.com, but I'm assuming they probably added a nice fee onto that.

The expense ratios - the amount of your money they consume - is very important.  What are the expense ratios for your plan?

Mutual funds essentially pick from the world's stocks - they decide what slice of Vanguard Total World (VT) they want to focus on.  And a vast majority of the time, they lose when compared to low cost index funds.  For example, the S&P 500 beats over 80% of active U.S. mutual funds over 3, 5, and 10 year periods.
https://us.spindices.com/documents/spiva/spiva-us-year-end-2017.pdf

RookieStache

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Re: Employer switched to Trans America
« Reply #5 on: October 22, 2018, 07:46:36 AM »
Mustacheandahalf - Wilmington/BlackRock EAFE Equity Index" in your plan is .06% but the returns are awful. I'd rather go with the .92% expense with 11% rate of return.

Chasesfish - The expense ratios are all circa .92% for all the options with a decent return. I will inquire about if they offer a broad market index fund. I was disappointed not to find one when I first looked at the options.

Thd7t - Appreciate the advice, didn't even think I could ask to have this changed.

RWD - 2% match. No in-service roll overs. Not sure on how long I expect to be here. Pretty decent pay and room for growth. Could be 2 years, could be 25.

Side note: I max out my Roth IRA and HSA. Wife has a 401K and puts a little into Roth IRA as well.

ZMonet

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Re: Employer switched to Trans America
« Reply #6 on: October 22, 2018, 03:54:56 PM »
Mustacheandahalf - Wilmington/BlackRock EAFE Equity Index" in your plan is .06% but the returns are awful. I'd rather go with the .92% expense with 11% rate of return.

"Past performance is not indicative of future results."  Just keep that in mind.  Just because it returned 11% over X period of time, doesn't mean it will return anything (or it may have negative returns) over the next X period.  There are a lot of people who would tell you that International developed world funds are ready to take off -- or at least exceed returns of U.S/Canada.  Factoring in the .86% difference in fees, and I wouldn't exclude it entirely.

On the other hand, if your investment plan doesn't include international stocks, then I'd exclude it for that reason.  But not because of past returns.
« Last Edit: October 22, 2018, 04:08:21 PM by ZMonet »

Radagast

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Re: Employer switched to Trans America
« Reply #7 on: October 22, 2018, 07:40:12 PM »
Someone's gotta pay for that pointy building in San Francisco. Might as well be you!

Car Jack

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Re: Employer switched to Trans America
« Reply #8 on: October 23, 2018, 11:49:07 AM »
I had transamerica at my last job before they switched to an equally bad mass mutual one.  My method for picking the one and only fund I'd invest in:  Sort by ER, lowest to highest.  Choose the lowest ER fund, regardless of what it was.  For transamerica, it was some mid cap fund.  For Mass Mutual, it was a bond fund.  I had no match but couldn't wait to find another job so I could roll the money into my IRA.

bognish

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Re: Employer switched to Trans America
« Reply #9 on: October 24, 2018, 12:14:01 PM »
I would blame the bad funds on your employer, not Transamerica. I am on the 401k committee at my employer and we switched to Transamerica 2 years ago. We had a lot of funds to choose from, may with low expense ratios. We review the funds a few times a year and drop the bad ones. Your employer probably does too.

dcozad999

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Re: Employer switched to Trans America
« Reply #10 on: October 29, 2018, 09:13:22 AM »
Definitely get with who is in charge of your 401k plan.

My wife's 401k is through One America and their options were absolute garbage.  They had over 100 funds to choose from, mainly American funds, all with high fees.

I had her in an S&P 500 Index fund with over a .30% fee (not sure exact number).

Not sure what happened, but about 9 months ago we get her statement and her money was automatically moved to the Vanguard 500 Index Adm (CFVW) with a .04% fee, which wasn't previously an option.  The options still contain American Target Date funds with high fees, but now also contains a whole line of Vanguard funds.
I'd like to take credit because I told her to go in and talk to them about it, however she doesn't even want to understand how this type of stuff works so I'm 100% her she didn't.  Thankfully someone else probably did.