401k Investment and Recordkeeping Services

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Joined: Tue Sep 19, 2017 6:23 am

401k Investment and Recordkeeping Services

Post by jlr81 » Tue Sep 19, 2017 6:48 am

Small business owner here. Looking to start a 401k for myself and 3 full time employees. I received a quote from a third party administrator/vendor for a TRowe Price plan (BrightScope rating of 84). I'm concerned that the fees involved are too high (below) based on reading other threads discussing numbers like per participant fees of $65/year.

One Time Setup Fee: $600
Administrative Fees/Credits from Investments: 0.119%
Base Recordkeeping Service Fee: $1600
Per Participant Recordkeeping Service Fee: $15
Guarantee Period: 3 years

Proposal Assumptions:
Participants: 4
Total Plan Assets: $60,000
Assumed Weighted Average ER: 0.53%

Estimated Annual Cost for Recordkeeping Services:
Administrative Fees/Credit from Investments: Total Plan: $71; Per Participant $17.79; % of Assets 0.1186%
Plus Estimated Recordkeeping Service Fee: Total Plan $1660; Per Participant $415; % of Assets 2.7667%
Estimated Annual Recordkeeping Cost: Total Plan $1731; Per Participant $432.79; % of Assets 2.8853%

When factoring in "investments and record keeping services," these rise further to Total Plan $1979; Per Participant $494.71; % of Assets 3.2981%

Are these fees reasonable for a 4 participant plan? If not, I'm assuming this would be from the third party administrator/vendor involvement as BrightScope shows TRowe Price plan to have "lowest fees." If not reasonable, any suggestions on other vendors to quote? Or particular aspects of this quote to renegotiate?

Thanks all.

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