A quick rundown...
My company is changing 401k providers from Principal to Schwab. The company matches 2.5% currently, and I'm putting in 15% into the 2055 fund at Principal, which has been doing well, and is only .39% expense ratio. The new plan is the BlackRock LifePath 2055 (LIVAX). It has a gross expense ratio of 8.70% (yes, that's correct), and a Net Expense Ratio of .54%. Which one will be the actual one used? MorningStar says the following:
Gross expense ratio: This is the actual fund expenses as stated in the fund prospectus.
Net expense ratio: This is the net fund expenses after any expenses were waived and/or partially absorbed by fund management.
I received a number of mailings from Schwab recently about the changeover. One form lists the operating expense of .54 and another lists it as 8.7. What the heck is going on here?
I'm considering just tossing in the 3% to match into Schwab and starting my own 401k with Vanguard at a .18% ratio. Is it that easy?
If it matters, I'm currently doing a Roth deferred 401k through Principal because I don't make a lot. I'm not sure if Schwab will keep that, but I haven't received any indication otherwise.