nbrege wrote:I just wanted to get your opinion on a few more things. First of all, would you consider 6 equity & 2 bond funds to be a low number? How many choices does the "average" 401K plan have?
I'm not going to claim to be an expert on 401(k) plans, but I've seen many many posts here on this forum and if they're a representative sample, then 8 funds is a small number.
But I wouldn't judge a plan based on the number of funds. The Federal government's Thrift Savings Plan, for example, has just five core funds but it's the best plan out there because it has such low expense ratios: 0.025% -- that's 30 times lower than the funds in your plan.
When I see a plan with many funds here, we Boglheads just skip over 90% of them anyway and zero in on the lower-expense index funds. I don't really care how many bad
funds a plan has--we usually just look for the two or three good
Also, from what I've read, there seems to be a trend toward plans having a smaller number of core funds, as opposed to having dozens of dozens of funds. The reason for that is the participants get overwhelmed by the choices and often don't choose well.
nbrege wrote:Also, are the ER's ridiculously high for a 401K plan or are they fairly typical? The ER's for the equity funds are .63, .71, .80, .82, .84 & 1.14%. I got those from the AF website. Also, our company size is 250-300 employees. Thanks again.
First of all, make sure you have the ER's right. You say you got them from the AF website. Make sure you get these numbers from your own plan literature as each 401(k) plan negotiates the ERs and they can be different from one plan to the next.
Also, you should find out if participants are paying ONLY what's in the published fund expense ratios, or if you're also paying additional fees on top of the fund ERs. For example, many plans might charge participants a accounts under management (AUM) fee of 0.25% or more.
If those ERs you listed are your complete, all-in expenses, then the next question is "are they fairly typical?" You have to ask if they're fairly typical for your size of company
-- or more precisely, for the amount of your company's assets under management. Plans at smaller companies are, generally, more expensive than those at bigger companies. See this post for more: viewtopic.php?t=109902#p1598800
. If those ERs you listed are your all-in expenses, then for a 250-300 person company, you're probably around average, maybe even a tiny bit better than average. Looking at p. 24 of the Deloitte survey, you plan probably has between $10M - $100M (a huge range) and those plans had an average all-in participant expense of 0.62% - 1.23%.