Author Topic: 401K “plan changes”... need interpretation  (Read 1170 times)


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401K “plan changes”... need interpretation
« on: April 25, 2018, 01:51:55 PM »
Hello wise people,

Please be gentle with my non-understandings....

I got a notice from the company that administers my 401K, and they mentioned changes to fees, and then also a revenue credit. I read it in full, but would greatly appreciate some plain English translations. I can provide specifics if needed, but wanted to post the snippets that I think are most important here. Here’s the notice I got:

**Currently, the Plan’s costs for administrative services are paid through offsets associated with some or all of the Plan’s investment options. Using offsets to pay the Plan’s administrative costs is a common approach. Additional administrative fees are not deducted from your account, and these amounts are not reflected on your quarterly account statement.
Effective June 1, 2018, ******* has directed Fidelity to deduct an annual plan administrative fee of 0.14% of eligible assets from your account balance. This amount will be deducted on a quarterly basis, which equates to 0.035% of your account balance per quarter. Beginning with your June 30, 2018, quarterly statement, the plan administrative fee will be shown as a separate line item labeled “recordkeeping fee.” In addition, you will see this fee appear under the “Transaction History” section of your account on Fidelity NetBenefits®.

Beginning in September 2018, a revenue credit will be allocated to participants who hold investment options based on the chart below. As a result, offsets associated with these funds will no longer be used to pay administrative costs. Any credit allocated to your account will appear on your quarterly benefits statement and will be invested as your Plan’s fiduciary has directed.
Although fees and credits may be factors in choosing investment options, it is important to ensure that you take into account several other considerations, such as time horizon, risk tolerance, and financial situation, when determining your investment approach and choosing the right investment mix.**

I didn’t post the above-referenced chart, but could if that’s super relative. I also don’t know if it’s important to share the current holdings that I have.

I have not encountered a plan change such as this (at least not since I’ve been paying attention.)

The big ask is: Should be proactive in anything? I’ve been at my current company for 4 years and current 401K balance with them is 73K.

Thanks in advance.

« Last Edit: April 25, 2018, 02:22:35 PM by August26th »

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Re: 401K “plan changes”... need interpretation
« Reply #1 on: April 25, 2018, 02:14:11 PM »
Nothing you can do here. Even with these changes, you're much better off maxing your 401k. Just make sure to roll it over to a low-cost IRA when you leave the job.