What's in your ADP 401(k)?

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I_Am_Not_A_Doctor
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What's in your ADP 401(k)?

Post by I_Am_Not_A_Doctor » Thu Apr 06, 2017 4:01 pm

I had a thread similar to this one running but it seems to have lost steam, perhaps because I was getting crossed-up in my own head about what I was trying to seek from other Bogleheads. That other thread is:

viewtopic.php?f=2&t=215725

In this attempt I'll refocus on the first question on my mind. That is - and I'm channeling my best Samuel L. Jackson impersonation here - "what's in your ADP 401(k)?" Assuming you have one of course...

More specifically, what "index fund" options do you have access to from within the ADP 401(k) platform? I'm trying to gather data for another cause, but here's what is available through mine:

1) Deutsche S&P 500 Index Fund - Class A, Ticker: SXPAX, ER = 0.61%
2) Columbia Mid Cap Index Fund - Class A, Ticker: NTIAX, ER = 0.45%
3) Columbia Small Cap Index Fund - Class A, Ticker: NMSAX, ER = 0.45%

Anyone in a current ADP 401(k) plan that can do better, I hope?

I_Am_Not_A_Doctor
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Re: What's in your ADP 401(k)?

Post by I_Am_Not_A_Doctor » Thu Apr 06, 2017 8:52 pm

So... no responses after a few hours. Does this maybe mean that ADP does not have many participants among the Bogleheads crowd? Am I posting this to the right forum here?

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happysteward
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Re: What's in your ADP 401(k)?

Post by happysteward » Thu Apr 06, 2017 9:10 pm

I do have ADP as the record keeper for my 401(k), ML is the financial advisor, interestingly our S&P 500 fund is BSPIX with an ER of 11 bp. The only reason we have it is because it was asked for specifically as a low cost option. They relented and we have it now, lobbying works. Because we have a revenue sharing model a choice like BSPIX with an ER of 11 bp leaves little room for revenue sharing so getting it included was difficult.
"How much money is enough?", John Rockefeller responded, "...just a little bit more." | "He who loves money will not be satisfied with money..." Ecclesiastes 5:10

I_Am_Not_A_Doctor
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Re: What's in your ADP 401(k)?

Post by I_Am_Not_A_Doctor » Thu Apr 06, 2017 9:17 pm

happysteward wrote:I do have ADP as the record keeper for my 401(k), ML is the financial advisor, interestingly our S&P 500 fund is BSPIX with an ER of 11 bp. The only reason we have it is because it was asked for specifically as a low cost option. They relented and we have it now, lobbying works. Because we have a revenue sharing model a choice like BSPIX with an ER of 11 bp leaves little room for revenue sharing so getting it included was difficult.
Ah ha! I too have ML as our employer's financial advisor. We may or may not have a revenue sharing model (can keep it on a list to ask). But you say "they" relented after lobbying for a lower cost option. Who is the "they" here? ML? Because, if that is the case, maybe I can push my employer after all (i.e., I can state that folks online who use ADP have access to a fund that is as low as 11 bps, so it isn't a limitation of the platform, but what the advisor is willing to recommend... which might fire-up our CEO).

2retire
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Re: What's in your ADP 401(k)?

Post by 2retire » Thu Apr 06, 2017 9:44 pm

We don't have ADP anymore, but when we had it, our funds were terrible.

Our cheapest fund was an S&P 500 @ 0.71.

The average expense ratio was 1.21%. The target date funds were all over 1.20%

Beensabu
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Re: What's in your ADP 401(k)?

Post by Beensabu » Thu Apr 06, 2017 11:56 pm

2retire wrote:Our cheapest fund was an S&P 500 @ 0.71.
Same here. SSGA index funds are the cheapest: S&P 500 (0.71), S&P 400 (0.72), REIT (0.72), Russell SC (0.99), International (0.99), Agg Bond (0.72), TIPS (0.72). There's a 0.70 ER for holding cash... The SSGA funds are usually fairly inexpensive as far as I can tell, so it's mostly passing admin costs on to employees. T. Rowe Price are the target date funds (1.16).

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happysteward
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Re: What's in your ADP 401(k)?

Post by happysteward » Fri Apr 07, 2017 6:16 am

The FA is the one that chooses the line up, there are probably some constraints the FA has to work within from the recordkeeper (ADP). But there is room to work and negotiate. Revenue sharing makes it more difficult to get the real low ER choices because there is very little to revenue share with the FA and the recordkeeper. In our case the lobbying for a few low cost options worked because they wanted to keep the business AND the line up still presented plenty of high ER choices which kept the revenue sharing stream healthy. If everyone in our company chose BSPIX neither the FA or the recordkeeper would be happy....and would probably drop us.
"How much money is enough?", John Rockefeller responded, "...just a little bit more." | "He who loves money will not be satisfied with money..." Ecclesiastes 5:10

sawhorse
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Re: What's in your ADP 401(k)?

Post by sawhorse » Fri Apr 07, 2017 6:20 am

Beensabu wrote:
2retire wrote:Our cheapest fund was an S&P 500 @ 0.71.
Same here. SSGA index funds are the cheapest: S&P 500 (0.71), S&P 400 (0.72), REIT (0.72), Russell SC (0.99), International (0.99), Agg Bond (0.72), TIPS (0.72). There's a 0.70 ER for holding cash... The SSGA funds are usually fairly inexpensive as far as I can tell, so it's mostly passing admin costs on to employees. T. Rowe Price are the target date funds (1.16).
My husband has ADP as the 401k administrator, and I think these are his expense ratios too, although he only has a few of these funds available.

Like you said, it's the employer passing on the cost of administering the 401k.

4fitness
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Re: What's in your ADP 401(k)?

Post by 4fitness » Fri Apr 07, 2017 6:32 am

Same here. SSGA index funds are the cheapest: S&P 500 (0.71), S&P 400 (0.72), REIT (0.72), Russell SC (0.99), International (0.99), Agg Bond (0.72), TIPS (0.72). There's a 0.70 ER for holding cash... The SSGA funds are usually fairly inexpensive as far as I can tell, so it's mostly passing admin costs on to employees. T. Rowe Price are the target date funds (1.16).
This looks like my lineup through my 401k as well. Not the best, but better than others I have seen.

Carl53
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Re: What's in your ADP 401(k)?

Post by Carl53 » Fri Apr 07, 2017 6:46 am

No index funds in my ADP 401k. Lowest cost funds are the Money Market fund (0.75% reimbursed to get the annual return up to 0.0%) and FKUTX (0.73%), a utilities fund where I have most of my money. Most funds offered are in the 1.2% range.

Good thing is that I only have about 2% of our funds in this 401k funded by an occasional part time gig.

jlcnuke
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Re: What's in your ADP 401(k)?

Post by jlcnuke » Fri Apr 07, 2017 7:21 am

We too have ADP with ML advisors. It wasn't until 3 years ago that we finally got some "reasonable" funds. Blackrock S&P 500 index fund (institutional class/large blend) BSPIX at 0.11% ER is our best. Blackrock international (MDIIX) at 0.37% is our next best. Columbia mid and small cap are in the mid .4x%. Plenty of options over 1% though (1.56% for vitrus emerging markets for instance).

I_Am_Not_A_Doctor
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Re: What's in your ADP 401(k)?

Post by I_Am_Not_A_Doctor » Fri Apr 07, 2017 12:35 pm

jlcnuke wrote:We too have ADP with ML advisors. It wasn't until 3 years ago that we finally got some "reasonable" funds. Blackrock S&P 500 index fund (institutional class/large blend) BSPIX at 0.11% ER is our best. Blackrock international (MDIIX) at 0.37% is our next best. Columbia mid and small cap are in the mid .4x%. Plenty of options over 1% though (1.56% for vitrus emerging markets for instance).
I'm developing a small bit of hope that ADP at least *has* low-cost index options in their platform. The fight is going to be in getting them and/or the broker/advisor to add the options.

If my plan sponsor is supposed to act as our fiduciary, does this place the same obligation on the broker/advisor and recordkeeper/custodian? I can potentially see where my employer believes he's living up to the expectation, but then not pressing the others to step-up, thinking all really is being done to lower costs.

fz583
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Re: What's in your ADP 401(k)?

Post by fz583 » Fri Apr 07, 2017 5:20 pm

The company I work for has about 50 people, 3.5 mil in 401k assets, We use ADP for payroll and 401K, all in its about 1%, we have low cost index funds including Vanguard S&P 500 Admiral shares at .05er, Vanguard targets at .15, .16, American fund targets at .42, and a bunch of other funds up to just over 1% er, It's better than what we had which was Great West which costs us about 2%, I went to HR and told them we were getting taken for years, they shopped around and they really had no clue,still don't, but they drank the ADP cool aid with total intergration and signed up, I looked at it as an improvement, not perfect by any means and the advisor is paid by AUM, so he'll just keep making more and he loves pushing those American fund target accounts, I tell everyone to just go with the Vanguard target but he convinces them to go 50/50 Vanguard/American targets to hedge there bets, again I just say do the Vanguard TR and forget about it.

I_Am_Not_A_Doctor
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Re: What's in your ADP 401(k)?

Post by I_Am_Not_A_Doctor » Fri Apr 07, 2017 6:23 pm

fz583 wrote:The company I work for has about 50 people, 3.5 mil in 401k assets, We use ADP for payroll and 401K, all in its about 1%, we have low cost index funds including Vanguard S&P 500 Admiral shares at .05er, Vanguard targets at .15, .16, American fund targets at .42, and a bunch of other funds up to just over 1% er, It's better than what we had which was Great West which costs us about 2%, I went to HR and told them we were getting taken for years, they shopped around and they really had no clue,still don't, but they drank the ADP cool aid with total intergration and signed up, I looked at it as an improvement, not perfect by any means and the advisor is paid by AUM, so he'll just keep making more and he loves pushing those American fund target accounts, I tell everyone to just go with the Vanguard target but he convinces them to go 50/50 Vanguard/American targets to hedge there bets, again I just say do the Vanguard TR and forget about it.
Your plan size sounds like my company's plan size in terms of AUM. And it sounds like my employer (whose previous CFO told me we've got our 401(k) with ADP because of payroll integration). But this could be the step in the right direction I've been looking for! How did you do the shopping? Did you lower the company's bills in the process of lowering the 401(k) costs too?

fz583
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Re: What's in your ADP 401(k)?

Post by fz583 » Fri Apr 07, 2017 6:37 pm

They contacted Vanguard and Fidelity, were basically told we were to small, at least that's what HR told me, now our HR is one lady, she also stocks the vending machines and makes coffee, so take that for what it's worth, we were already doing payroll with ADP so she was comfortable with them, she told me the company/employees saved about $60,000 the first year, were in year 2 now. I tried to steer her away from ADP but like I said it was better than what we had and I was happy to get my Vanguard target account.

fz583
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Re: What's in your ADP 401(k)?

Post by fz583 » Fri Apr 07, 2017 6:44 pm

Our adviser is from FSRP trusted independence, there in Bedford NH and I'm sure there very much in bed with ADP. good luck, I know your frustration.

Bfwolf
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Re: What's in your ADP 401(k)?

Post by Bfwolf » Fri Apr 07, 2017 7:04 pm

A major health care provider here in Chicago uses ADP for their 401k and it is loaded with low ER choices like Vanguard Total Bond, Vanguard Total Stock, and the Vanguard Target Retirement series.

I_Am_Not_A_Doctor
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Re: What's in your ADP 401(k)?

Post by I_Am_Not_A_Doctor » Fri Apr 07, 2017 8:40 pm

fz583 wrote:They contacted Vanguard and Fidelity, were basically told we were to small, at least that's what HR told me, now our HR is one lady, she also stocks the vending machines and makes coffee, so take that for what it's worth, we were already doing payroll with ADP so she was comfortable with them, she told me the company/employees saved about $60,000 the first year, were in year 2 now. I tried to steer her away from ADP but like I said it was better than what we had and I was happy to get my Vanguard target account.
$60k seems like a sizable figure. Maybe with our plan, even though it is a similar balance, the company can reap higher savings for us given the (potentially) larger number of participants (perhaps with small average balances than your plan though).
fz583 wrote:Our adviser is from FSRP trusted independence, there in Bedford NH and I'm sure there very much in bed with ADP. Good luck, I know your frustration.
Getting frustrated in the understanding of the complex web of 401(k) administration? Me? Nah. OK, maybe a little. Or alot. :wink:
Bfwolf wrote:A major health care provider here in Chicago uses ADP for their 401k and it is loaded with low ER choices like Vanguard Total Bond, Vanguard Total Stock, and the Vanguard Target Retirement series.
I'd be tickled to find a series of Vanguard options in our plan. I remember extended family members asking me what to choose for their 401(k) plans. I saw Vanguard and needed to see no more. But I suspect they chose the one with the higher recent performance. Oh well... can't do anything more than I did. But a question: Sounds like you might be in a plan with a large number of participants and a large AUM. Is that the case? I can see where low-cost options are more readily available then, versus my employer's small plan.

Bfwolf
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Re: What's in your ADP 401(k)?

Post by Bfwolf » Fri Apr 07, 2017 8:52 pm

It's not my plan but I'm familiar with it. Yes, I imagine they have a fairly large number of participants and AUM.

Many folks here speak highly of Employee Fiduciary for small company 401ks.

https://www.employeefiduciary.com/

sawhorse
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Re: What's in your ADP 401(k)?

Post by sawhorse » Sun Apr 09, 2017 4:20 pm

fz583 wrote:They contacted Vanguard and Fidelity, were basically told we were to small, at least that's what HR told me, now our HR is one lady, she also stocks the vending machines and makes coffee, so take that for what it's worth, we were already doing payroll with ADP so she was comfortable with them, she told me the company/employees saved about $60,000 the first year, were in year 2 now. I tried to steer her away from ADP but like I said it was better than what we had and I was happy to get my Vanguard target account.
My husband's company was also rejected by Vanguard for being too small.

jmsaway
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Re: What's in your ADP 401(k)?

Post by jmsaway » Thu Jun 28, 2018 7:29 pm

We have a four vanguard funds. Is there a max number or percentage of vanguard funds that can be in an ADP plan?

Ben10
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Re: What's in your ADP 401(k)?

Post by Ben10 » Thu Jun 28, 2018 8:13 pm

I've been able to duplicate a Total Market Fund in my ADP 401(k), I think, with an S&P 500 index, a Midcap index and a Small Cap index. The offerings in my plan are extremely slim. ADP recently reduced the expense ratios on the available funds, which were high to begin with.

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