Please continue to post your comments on the Things you should NEVER say to your employer because you never know who will use your ideas and have success with them. Most employees who lobby for a low cost plan are not successful, so a few guidelines on What NOT to say
and What to say
may improve your odds of success as you lobby for a low cost 401(k) or 403(b) plan at your organization. Note: I have included a link to this thread directly below the following two articles in "Forum discussions."
- http://www.bogleheads.org/wiki/How_to_C ... tter_401(k
Also, the following thread has Five Simple Steps for setting up, managing, and monitoring a 401(k) plan that is optimal:viewtopic.php?p=808263#808263 The two lists (shown below) contain the comments that you have made, so far:List 1 - Things you should never say to your employer:
1. Our plan's menu of investments is awful! (Don't let that statement slip out in a meeting!)
2. Our plan's recordkeeper and administrator is way too expensive!
3. Why are we paying a wrap fee? Dumb!
4. Do you think you can make our plan more complicated...how about including even more managed funds in the menu?
5. Did you pick this lousy plan because you're getting a kickback from the advisor?
6. Have you heard of the concept of the Fiduciary duty and that it can be the basis for litigation?
7. You saw my spreadsheet! Do you understand numbers? Is there a better way I can explain this to you so that you will understand it? List 2 - Rules to keep you focused on what matters most:
3CT_Paddler said, "Usually they are defensive about their 401k choices and don't want to be told they have made a mistake." - Rule:
Always show your ideas on how to improve the plan to the named fiduciary, but remember that pointing fingers won't serve you well.
natureexplorer said, "Show the 401k of your largest competitor (many large employers actually have pretty decent 401ks), then show that even your employer could get a very similar deal by going with Vanguard or Employee Fiduciary." - Rule:
Always ask if the named fiduciary will allow a low cost service provider (that you know of) to show him or her a cost comparison.
redbeard123 said, "The decision is ultimately made by the board." - Rule:
Always make your case to the real decision makers.
MP173 said, "I prepared a spreadsheet with my current balance, projected contributions, returns, fees, etc with an end result in 10 years...at my anticipated retirement age. Quite an impressive $$$number. Then I did the same with a much more reasonable fee structure and the end result. Meeting with the CEO and CFO I explained the numbers and calmly told them it looked like they would have to keep me on the payroll a couple extra years. We have switched the new contributions to a Fidelity plan with the movement of existing balances planned later this year. It has taken quite awhile to make the transfer, but at least it is moving forward." - Rule:
Always show the CEO and CFO how much more money you and they could have by switching to a new plan that has a menu of low cost index funds and low cost recordkeeping and administration.
Christine_NM said, "Before saying anything about changes, make sure you understand the requirements/limitations affecting your particular plan." - Rule:
Always ask if there are legal issues that would prevent your ideas on improving the plan from being implemented this year--plan your presentation accordingly.
nisiprius said, "I phrased it simply as a personal request. The next year FBIDX was made available in the plan. So, I think the take-home message is don't go in thinking it's necessarily going to be a) a fight, or b) difficult. Step 1 in getting anything is to ask." - Rule:
Always be clear about what you want, and ask the right people for it.
Leonard said, "People seem to think it is high cost plans that are the only ones that charge the employees. But, you can construct any plan - high cost or low cost - where the company pays 100%, employees pay near 100%, or a combo." - Rule:
Always remember that employees are allowed to pay 100% of the cost of the plan. That means it may be in the employees' best interests to switch to a truly low cost plan even if it means that they will pay 100% of its cost. Always do the math before you make your presentation to the company. The following is my original post:
I need your help. Most employees who lobby for a low cost plan are not successful. Perhaps it would be helpful if we could put together a list of things you should never say to your employer if you plan to lobby for a low cost 401(k) or 403(b) plan. Also, it may be helpful to put together a list of things you should say that may catch the employer's ear so that he or she will will hear you out on how to improve the plan and save the company money, too. Is this a good idea, or not? If you think so, please show us your ideas on what employees should not say. Also, it would be great if you would show us what employees could say so that the employer will take their ideas seriously and want to know more.
Edited twice on 10/14/2011 to include the updated information. Edited on 10/15/2011 to include the comments shown in the two lists, to rephrase the two sentences that follow the word "Update," to include links to two articles that are on the wiki site, to include a comment by 3CT_Paddler in list #2, and to rephrase two sentences. Edited twice on 10/19/2011 to fix a link and include a new link. Edited on 10/21/2011 to try to fix a link, and to rephrase and provide additional information in the very first paragraphs.
Frank R. Cirullo
| "It isn't what we don't know that gives us trouble, it's what we know that ain't so." --
| Will Rogers