Q: Reasonable 401k Plan Admin Fees, 800-participant plan / company?

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amixer
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Joined: Tue Jan 09, 2018 12:44 pm

Q: Reasonable 401k Plan Admin Fees, 800-participant plan / company?

Post by amixer » Wed Feb 21, 2018 8:13 pm

What are reasonable 401k Plan Administration Fees for a 800-participant plan / company, when the fees are paid out of the Employee's 401k assets?

Background: My wife works at a 1000-person company with Fidelity as their plan administrator. They have a reasonable 401k Employer match, and a limited number but good choices of low cost index funds. The cheapest being 0.035% ER (Fidelity Total US Index and Fidelity 500 Index, Premium Class). 800 Employees participate, with $16M Net Plan Assets

The 401k Plan Administrative Fees are 0.55% (per year [0.37% Recordkeeping Fee + 0.18% Advisor Fee]), paid out of the Employee’s 401k assets. These fees have the net effect of increasing the lowest ER from 0.035% to 0.585%.

On a $250k 401k balance, the investment expenses (0.035%) is $87.50 per year.
On a $250k 401k balance, the 401k admin fees (0.55%) are $1,375 per year.

I find the 401k admin fees excessive. Made worse since they aren’t fixed yearly cost ($), but a percentage of assets (%).

What have Bogleheads seen for reasonable 401k Plan Administrative fees at a 800-participant plan / company?

Can anyone share some stories of where they have been successful in getting the company to re-negotiate their 401k admin fees to something more reasonable, or a fixed cost?

Thanks.
Last edited by amixer on Wed Feb 21, 2018 11:29 pm, edited 3 times in total.

niceguy7376
Posts: 1979
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Location: Metro ATL

Re: Q: Reasonable 401k Plan Admin Fees, 1000-person company?

Post by niceguy7376 » Wed Feb 21, 2018 10:30 pm

How many employees of the 1000 participate in the 401k? What are the total assets of the plan?

Those two might help in more recommendations.
The ERs are good but the extra fees look to be very steep for such a company size.

Look at VG, Schwab and Guideline (definitely recommend for small businesses)

Angelus359
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Re: Q: Reasonable 401k Plan Admin Fees, 1000-person company?

Post by Angelus359 » Wed Feb 21, 2018 10:57 pm

My work has the employer pay the 401k fees, and we have admiral vanguard funds (at principal)
IT-DevOps System Administrator

amixer
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Re: Q: Reasonable 401k Plan Admin Fees, 1000-person company?

Post by amixer » Wed Feb 21, 2018 11:26 pm

Upon further research, I found:

800 employees participate.
$16M Net Plan Assets

I've edited the original post.

Thanks,

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JamesSFO
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Re: Q: Reasonable 401k Plan Admin Fees, 800-participant plan / company?

Post by JamesSFO » Wed Feb 21, 2018 11:31 pm

For that size company that seems high to me. I've worked at smaller tech startups with the employer bearing more of the cost and Fidelity as the custodian/record keep/etc.

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