I'm trying to understand the expense ratios of a couple different providers for my wife's retirement plans.
One option is VALIC, which offers Vanguard index funds. However, I found this wording: "An effective annual charge of 0.50% will be assessed on mutual fund assets in the plan for which administrative services are provided." What are administrative services in this context? Just using them as the retirement plan provider? Or is there a possibility that we won't be charged this additional management fee?
Another option is TIAA-CREF which has an index fund variable annuity (QCEQPX) with an expense ratio of 0.38%, but I'm uncomfortable with annuities. They also offer target retirement mutual funds (e.g. TTRIX) with an expense ratio of 0.46%. However, both of these have wording in the prospectuses about some of the funds expenses being reimbursed and that it isn't guaranteed to continue. For example, TTRIX has an expense ratio of 0.78% before waivers and expense reimbursements and the following wording: "These expense reimbursement arrangements will continue through at least September 30, 2015, unless changed with approval of the Board of Trustees."
I'm thinking VALIC seems to be the more predictable of the two. Even though it appears it will have slightly higher expense ratios I'm kind of leaning toward it. The longest we might hold one of these accounts is 30 years (457 plan). Thoughts?
