Hands tied with John Hancock, how to navigate?

[vincnt]

My employer 401k is through John Hancock with a limited number of funds. I've been working to get low-cost Vanguard options added to the fund with mixed success.

IE there wasn't an SP500 or total US market fund in the plan, I had to ask for them to be added. I asked directly for Vanguard funds, but instead the manager put in the following:

500 Index Fund - JFIVX (0.55% gross, 0.3% net)
Total Stock Market Index Fund - JETSX (0.59% gross, 0.58% net)

I've been told VTI is 'not avilable on John Hancock' and quoting recent outperformance of these funds as a reason to put these high-cost funds in the plan.... maybe I am expereincing something normal with 401k managers, but I wouldn't pick this guy up in the rain off the side of the interstate.

--

I am putting 15% of my pre-tax income into the 401k. Those fees on the JH funds make me sick. My investing plan, which I am implementing in my roth @ Vanguard, is a self balanced VTI/VXUS/BND following roughly the 2055 target date glide path.

Few questions:

First- do I have any power with the fund manager to enable investment into lower cost options? Any tactical suggestions?

Second- The plan had BND (VBTLX) and I was able to get VXUS (VTIAX) into the plan, but I don't have a low-cost VTI/VOO option. Right now this portion of my investments are in VHYAX.

I have the following low-cost funds available. Given this selection, any suggestions on how to allocate this portion to replicate US total (VTI/VOO) section of the portfolio? Should I just bite the bullet and take the JH fund?

Vanguard Growth Index Fund - VIGAX
Vanguard Mid-Cap Value ETF - VOE
Vanguard Small Cap Grow Index - VSGAX
Vanguard Equity-Income Fund - VEIRX
Vanguard High Dividend Yld Idx - VHYAX

Third- I pay about $43/quarter or $129/year on every $10,000 invested. Is this unreasonable or just the price you pay for the employer match, profit share etc?

[stan1]

You have a bad 401K with apparently no logic to the fund selection, but that's likely because your employer is choosing a plan administrator (John Hancock) that gives them other benefits or charges them no fees by charging you fees directly. Guessing it is a small employer. Maybe the John Hancock guy is the CEOs brother in law or they go to the same church or have other affinities.

You can try to educate your employer on the benefits of low cost, but my guess is they will eventually tell you that they get other insurance products from John Hancock so its "complicated".

How long do you plan to stay with this employer? If you are there for a few years I'd say accept it and look forward to being able to roll over to a better plan in the future.

Interesting that you have Growth Index and Equity Income. I would do 50/50 and call it a day, but others would try to calculate a precise balance.

I would focus on trying to get broad market index investments with low expense ratios. Asking for Vanguard by name is not necessary, there are many index funds with low expense ratios these days. I would show your employer the expense ratio of the S&P 500 fund they are offering compared to others (from Vanguard and elsewhere).

[itnetpro]

I have an old, small 401k with around 25k from an old employer, I worked for a couple of years, at Hancock that I decided to keep. Now that I’m retired, I just never bothered to roll it into an IRA. They have only two funds there I actually like. An S&P 500 index and Fidelity Contra, so I just let it sit in Contra.

I can say with all certainty that, John Hancock is by far the worst retirement plan I ever had! Every time I moved money in that plan, they charged me $50. That is on top of all the other stupid fees they have!

I never had so many fees with other 401k like Empower, Fidelity or Vanguard over the years!

Poor choices, poor customer service, lots of fees!

You should start a petition with your peers and complain to your employer to switch the plan to Fidelity or Vanguard…

John

[arcticpineapplecorp.]

Interesting that you have Growth Index and Equity Income. I would do 50/50 and call it a day, but others would try to calculate a precise balance.

vincnt, you can see how this recommendation compares to vti below (you can see it was pretty close):



Source

you can also look on that chart and see how this recommendation did compared to your inclination of just going with VHYAX (vhyax did not perform as well).

hope that helps.

how were you able to convince them to put VXUS in the offerings?

Did they actually put VXUS (ETF) in the offerings or was it VTIAX (the mutual fund)?

there's nothing you can do about the 1.29% admin fee ($129/$10,000) except campaign for a better 401k plan

it always cracks me up that the CEOs think these plans are ok, as if they're not maxing out these very same crappy 401ks.

[mhalley]

The fees are high. The rule of thumb is that you should invest in a 401k over taxable until fees exceed 1.7%
By all means continue to campaign for cheaper funds. The wiki has some suggestions under the expensive or mediocre choices section.

https://www.bogleheads.org/wiki/401%28k ... re_choices

[vincnt]

Thank you all for the replies, try to answer them all in one post:

It's a small company, I am at a high level in the company and have a direct line of communication and a good relationship with the owner, my boss. It's a place I've made a career and intend to stay for the long term, likely until retirement (20+ more years)

I was able to get VTIAX in, not VXUS, by asking the administrator and working with my boss to get it approved. The administrator was not helpful and won't communicate with me directly however, very dismissive. My boss was very agreeable and happy to work with me.

Thank you for the suggestion splitting 50/50, that will work. Maybe not as good as VTI or VOO, but better than the total JH index fund with a 0.58% expense ratio!

I am putting together my thoughts to send to my boss and key staff - for me, but I'd also like to be an advocate for my fellow employees. Working on the expense ratios and available funds is one thing, but any advice beyond the (helpful!) wiki article on admin /management fees? With a small company, is it realistic to think we could greatly reduce the administrative / management fees below the ~1.3%?

I don't want to shake the tree if it's a lost cause, but with my level of investment it greatly impacts me personally.

[the_wiki]

See how Fidelity plan compares.

https://www.fidelity.com/retirement-ira ... 401k-plans

[dbr]

Thank you all for the replies, try to answer them all in one post:

It's a small company, I am at a high level in the company and have a direct line of communication and a good relationship with the owner, my boss. It's a place I've made a career and intend to stay for the long term, likely until retirement (20+ more years)

I was able to get VTIAX in, not VXUS, by asking the administrator and working with my boss to get it approved. The administrator was not helpful and won't communicate with me directly however, very dismissive. My boss was very agreeable and happy to work with me.

Thank you for the suggestion splitting 50/50, that will work. Maybe not as good as VTI or VOO, but better than the total JH index fund with a 0.58% expense ratio!

I am putting together my thoughts to send to my boss and key staff - for me, but I'd also like to be an advocate for my fellow employees. Working on the expense ratios and available funds is one thing, but any advice beyond the (helpful!) wiki article on admin /management fees? With a small company, is it realistic to think we could greatly reduce the administrative / management fees below the ~1.3%?

I don't want to shake the tree if it's a lost cause, but with my level of investment it greatly impacts me personally.

There are conversations here on the forum relevant to exactly this sort of situation.

See here: https://www.google.com/search?sitesearc ... mpany+401k

I am not an expert, but I would say one reads of successes at finding ways to configure a decent plan for a small company. Going to John Hancock, and a host of similar options, pretty much precludes getting a decent plan from the get go. It is a practical and ethical wrong to allow a predatory agent to suck away the life savings of employees under the auspices of a government tax benefit.

To be frank, when you are stuck in a plan like this you are victims of your boss not doing his job. If he does not want to take some responsibility for the welfare of his employees he could appoint you to a position to manage the plan and make clear to any candidate plan providers that you have authority to negotiate the plan. If necessary he could hire some legal and accounting advice (not an investment company) to work the problem. This is not a job for amateurs, your boss apparently being one such, and the result shows. You might take a look at the rest of your compensation and benefits package while you are at it. It doesn't sound good.

[HomeStretch]

To get a better 401k fund (lower fees, lower ERs, better fund choices), your company will need to move to another 401k provider. So you may need to campaign for a switch.

[dbr]

To get a better 401k fund (lower fees, lower ERs, better fund choices), your company will need to move to another 401k provider. So you may need to campaign for a switch.

Which leaves it unexplained how the owner of this company does not have enough of a sense of responsibility to have done that correctly from the get-go. The boss should not need a campaign from employees to get this right. It should not take more than a semi-informed employee pointing out that there is a problem.

[Jack FFR1846]

I had a John Hancock plan at a previous employer. I did a sort by expense ratio and the cheapest one was some mid cap fund at 0.41%. I put everything into that, knowing I would not be at this job forever. After 4 years in the job, I found a new job and rolled the whole think into my IRA.

[dbr]

I had a John Hancock plan at a previous employer. I did a sort by expense ratio and the cheapest one was some mid cap fund at 0.41%. I put everything into that, knowing I would not be at this job forever. After 4 years in the job, I found a new job and rolled the whole think into my IRA.

It may be that finding employment elsewhere is the most practical solution to the specific problem of a bad 401k. That is not necessarily appealing if the job is otherwise an excellent one, in which case you just have to give something up.

[Globalviewer58]

Look for In Service Rollover to IRA in your 401K Plan documents. This feature allows participants the option of rolling their account to an IRA. You would continue to contribute to the 401K and periodically perform a rollover. The fees section of the Plan Document should specify the cost for this action. Compare the rollover cost to the excess ER to find the best frequency for the rollovers.

IRS rules generally limit rollovers to once in 12 months but your 401K Plan may specify the limits in $ minimum and frequency.

This is a feature that you could lobby your management to change as it has little to no cost to management but makes lower cost investment fees available to the savvy participants.

[OhioGozaimas]

The cost of a 401(k) plan, and its available feature-set are largely driven by:

> The total plan assets,
> The number of employees/participants,
> The average participant balance.

Do you know how many current plan participants, and roughly what the plan assets are? We BHers don't need to know the numbers. The annual revenue generated by the plan is the key, of course...

“Micro”-size plans, those with less than $5mm in assets, represent about one-quarter of all 401(k) plans. (The next group up, “Small”-size plans, have assets of $5mm to $25mm.)

JH seems to be highly represented among “Micro” plans.

Is the $129 per $10k/year (1.29%) a separate fee, in addition to the ERs that come out of the performance of the funds?

It appears that the plan does have some “revenue sharing” rebating of ERs (gross vs. net ERs).

Does your plan have a suite of Target Date Funds? Some JH TDF share classes can have very reasonable ERs.

> Do you have Automatic Enrollment?
> Automatic Contribution Escalation (1%/yr)?
These can greatly help with growth of plan assets and participants' Retirement Readiness over time.

Is there a “plan investment committee” to “assist the owner” with his fiduciary responsibilities? (If not, maybe lobby to add one?)

Good luck!

[Steady59]

To get a better 401k fund (lower fees, lower ERs, better fund choices), your company will need to move to another 401k provider. So you may need to campaign for a switch.

Which leaves it unexplained how the owner of this company does not have enough of a sense of responsibility to have done that correctly from the get-go. The boss should not need a campaign from employees to get this right. It should not take more than a semi-informed employee pointing out that there is a problem.

For years, Hancock has wasted (hundreds of) millions of dollars trying to expand and be competitive in the retirement space which is super hard especially if you have crappy proprietary funds. Its been one bad decision after another.

Most likely, there is some sort of agent involved, perhaps a friend of the owner, who is ran point with a JH salesperson. Vanguard is notorious for poor revenue share deals. Its always a delicate balancing act choosing funds with revenue share to offset admin fees. Using in-house funds gives JH more "opportunities to be competitive" fee wise. Not a lot of money to be made with small plans unless you have a lot of them with expensive funds. Its a very competitive business environment with continued pressure to lower fees.

[NBCPA]

I used to audit small 401(k) plans between 2009 and 2019. JH plans were the most common. Employers could set them up and basically not have to pay anything out of pocket for the plan because of the fee structure you mention. If your plan is set up the same as all the plans I audited, you never will get index fund low fees in JH because the plans don’t technically hold mutual funds. What they hold are “pooled separate accounts” where JH takes a mutual fund, wraps it in an insurance product and kicks up the fees. I had plans with Vanguard S&P 500 funds at something like 40bps. You can tell this is the case if the unitization in your plan is different than the actual mutual fund it lists, like at 12/31/24 VFIAX was $542.76/unit but you plan says something like $35 on your statement. I never saw one good JH plan so any lobbying efforts to change the plan setup is the answer.

[dbr]

Which leaves it unexplained how the owner of this company does not have enough of a sense of responsibility to have done that correctly from the get-go. The boss should not need a campaign from employees to get this right. It should not take more than a semi-informed employee pointing out that there is a problem.

For years, Hancock has wasted (hundreds of) millions of dollars trying to expand and be competitive in the retirement space which is super hard especially if you have crappy proprietary funds. Its been one bad decision after another.

Most likely, there is some sort of agent involved, perhaps a friend of the owner, who is ran point with a JH salesperson. Vanguard is notorious for poor revenue share deals. Its always a delicate balancing act choosing funds with revenue share to offset admin fees. Using in-house funds gives JH more "opportunities to be competitive" fee wise. Not a lot of money to be made with small plans unless you have a lot of them with expensive funds. Its a very competitive business environment with continued pressure to lower fees.

Yes, small business managers are sitting ducks for affinity and other predatory operations of investment and insurance agents.

I am going to risk violating forum policy to mention a public policy aspect, which is that this is an example of the problems in putting responsibility for societal programs such as tax benefited retirement and health insurance through employers where the ball gets dropped with small businesses especially. It is probably a race between malevolence and incompetence (assume the second before the first).

Note a better example of 401k implementation would be like the plan at Mymegacorp where funds in the below 0.10% ER are available, the company subsidizes all the plan costs, and there is a brokerage link with commission free access to the investment markets. That plan capitalizes at several tens of billions of dollars.

[finite_difference]

My spouse had a JH plan that had access to DFA and American funds at a pretty reasonable price?

Otherwise I’d just switch 401k providers to Vanguard.

[stan1]

Thank you all for the replies, try to answer them all in one post:

It's a small company, I am at a high level in the company and have a direct line of communication and a good relationship with the owner, my boss. It's a place I've made a career and intend to stay for the long term, likely until retirement (20+ more years)

I was able to get VTIAX in, not VXUS, by asking the administrator and working with my boss to get it approved. The administrator was not helpful and won't communicate with me directly however, very dismissive. My boss was very agreeable and happy to work with me.

Thank you for the suggestion splitting 50/50, that will work. Maybe not as good as VTI or VOO, but better than the total JH index fund with a 0.58% expense ratio!

I am putting together my thoughts to send to my boss and key staff - for me, but I'd also like to be an advocate for my fellow employees. Working on the expense ratios and available funds is one thing, but any advice beyond the (helpful!) wiki article on admin /management fees? With a small company, is it realistic to think we could greatly reduce the administrative / management fees below the ~1.3%?

I don't want to shake the tree if it's a lost cause, but with my level of investment it greatly impacts me personally.

Thanks for the update, keep talking to the owner (your boss) patiently and make sure you understand if anything else the company pays for is "bundled" with John Hancock which would make it harder to de-couple.

You could help look into lower cost plan administrators focused on small businesses. There are a lot of factors such as plan participation, high earners, etc. Employee Fiduciary may be one to look at, maybe others will post some ideas as well. ADP also has many small businesses (not a recommendation just a place to look). The big brokerage houses like Fidelity, Schwab, Vanguard may not work well for this small business but can also be looked at. Your boss will need someone to gather the cost and feature data and normalize it.

[vincnt]

Thanks everyone again for the information and perspectives.

I believe the plan setup through a local referral. I don't think we are tied to any other JH services. I don't suspect malice in the choosing of this plan. If I can present a good case for why the current plan is no good and offer an alternative, there's a high chance I can impact some positive change - likely just a direct switch to the suggestion I make. So I am taking my time and doing research and will comparison shop alternative plans.

To be safe, I am also looking at the rollover option. In the fees doc, it outlines a $50 rollover fee. If I pulled everything I could out into my Vanguard Roth IRA once a year, it makes sense to me to pay the one-time fee and not the 1.whatever% every year ongoing. Right?

[Globalviewer58]

An In Service Rollover of $5,000 with a 1% ER savings reduces your first year cost by $50 and then you continue to enjoy that savings going forward. So the minimum move to break even on the 401K fee of $50 is $5,000.

Keep in mind that you will owe taxes if the In Service Rollover is from pre-tax 401K to Roth IRA. If you don’t benefit from a Roth conversion then you would want to Rollover to a traditional IRA account.

[clip651]

If your company switches over to a new plan, consider advising employees to exit any JH stable value positions.

My previous employer switched from JH to another provider/custodian. Most of our funds transferred over with the switch after the blackout period was finished. But none of the stable value holdings of employees transferred over smoothly. Those required extra rounds of paperwork from each employee and thus considerable delay (months) before employees had all their funds in their new 401k account with the new custodian. I’m unsure of every employee completed the process. If not, HR is still stuck with dealing with JH for some employees.

Just trying to save you and your company some hassle. Not sure if the same applies to any other JH named funds that might be offered in your plan. But the stable value dollars are a pain to retrieve!!

[Steady59]

I used to audit small 401(k) plans between 2009 and 2019. JH plans were the most common. Employers could set them up and basically not have to pay anything out of pocket for the plan because of the fee structure you mention. If your plan is set up the same as all the plans I audited, you never will get index fund low fees in JH because the plans don’t technically hold mutual funds. What they hold are “pooled separate accounts” where JH takes a mutual fund, wraps it in an insurance product and kicks up the fees. I had plans with Vanguard S&P 500 funds at something like 40bps. You can tell this is the case if the unitization in your plan is different than the actual mutual fund it lists, like at 12/31/24 VFIAX was $542.76/unit but you plan says something like $35 on your statement. I never saw one good JH plan so any lobbying efforts to change the plan setup is the answer.

This is a good explanation. Insurance companies, JH included, love their pooled accounts in part because they have crappy funds.

JH has a couple of different 401(k) products running on different systems. If your employer can migrate away from their small plan product and move to the mid/large plan offering which runs on a completely different system, the product becomes more attractive and the funds may not be pooled insurance products.

[exodusNH]

If your company switches over to a new plan, consider advising employees to exit any JH stable value positions.

My previous employer switched from JH to another provider/custodian. Most of our funds transferred over with the switch after the blackout period was finished. But none of the stable value holdings of employees transferred over smoothly. Those required extra rounds of paperwork from each employee and thus considerable delay (months) before employees had all their funds in their new 401k account with the new custodian. I’m unsure of every employee completed the process. If not, HR is still stuck with dealing with JH for some employees.

Just trying to save you and your company some hassle. Not sure if the same applies to any other JH named funds that might be offered in your plan. But the stable value dollars are a pain to retrieve!!

Stable Value Funds (SVFs) often have contractual stipulations that allow them to hold onto the funds for a certain period, e.g. 1 year. They don't always exercise that option, but it has been more common recently because of the increase of interest rates.

The holds are a better option than a market value adjustment (MVA), which would result in a substantial discount.

They way around that is for each employee to individually request the transfer. That's probably what you experienced.

SVFs only work because they are able to restrict trading, restrictions that can only be applied in a vehicle like a 401k. These restrictions keep withdrawals from hurting the other participants by driving up the insurance costs.

[clip651]

If your company switches over to a new plan, consider advising employees to exit any JH stable value positions.

My previous employer switched from JH to another provider/custodian. Most of our funds transferred over with the switch after the blackout period was finished. But none of the stable value holdings of employees transferred over smoothly. Those required extra rounds of paperwork from each employee and thus considerable delay (months) before employees had all their funds in their new 401k account with the new custodian. I’m unsure of every employee completed the process. If not, HR is still stuck with dealing with JH for some employees.

Just trying to save you and your company some hassle. Not sure if the same applies to any other JH named funds that might be offered in your plan. But the stable value dollars are a pain to retrieve!!

Stable Value Funds (SVFs) often have contractual stipulations that allow them to hold onto the funds for a certain period, e.g. 1 year. They don't always exercise that option, but it has been more common recently because of the increase of interest rates.

The holds are a better option than a market value adjustment (MVA), which would result in a substantial discount.

They way around that is for each employee to individually request the transfer. That's probably what you experienced.

SVFs only work because they are able to restrict trading, restrictions that can only be applied in a vehicle like a 401k. These restrictions keep withdrawals from hurting the other participants by driving up the insurance costs.

Our particular stable value fund had no trading restrictions listed, per plan and fund docs that I saw. It didn’t pay much interest either! But our bond options were all high cost. I suspect stable value offerings may vary, even with the same custodian.

[vincnt]

“Micro”-size plans, those with less than $5mm in assets, represent about one-quarter of all 401(k) plans. (The next group up, “Small”-size plans, have assets of $5mm to $25mm.)

We would be a micro plan.

Is the $129 per $10k/year (1.29%) a separate fee, in addition to the ERs that come out of the performance of the funds?

The $129 / year is just for administrative charges. As far as I know, the fund costs come out of the unit value. Same with dividends paid, they increase the unit value. I could be wrong.

It appears that the plan does have some “revenue sharing” rebating of ERs (gross vs. net ERs).
Does your plan have a suite of Target Date Funds? Some JH TDF share classes can have very reasonable ERs.

I think you're right, for the JH funds specifically. IE the '500 Index Fund' JFIVX has an advertised ER of 0.05% but the Underlying fund expense ratios are 0.55% gross and 0.3% net.

There are JH target date funds with ~0.4% ERs in our plan, gross and net. The Vanguard funds don't seem to be liable for additional costs aside from the ER. The gross and net is the same as the advertised ER - IE 0.08% for VHYAX.

Is there a “plan investment committee” to “assist the owner” with his fiduciary responsibilities? (If not, maybe lobby to add one?)

Yes there is one, and I have direct contact with them. They've been helpful and I may try to see if they will help me push this initiative.

My 401k is a Roth. The rollover looks like a very attractive option.

[Artsdoctor]

Thanks everyone again for the information and perspectives.

I believe the plan setup through a local referral. I don't think we are tied to any other JH services. I don't suspect malice in the choosing of this plan. If I can present a good case for why the current plan is no good and offer an alternative, there's a high chance I can impact some positive change - likely just a direct switch to the suggestion I make. So I am taking my time and doing research and will comparison shop alternative plans.

To be safe, I am also looking at the rollover option. In the fees doc, it outlines a $50 rollover fee. If I pulled everything I could out into my Vanguard Roth IRA once a year, it makes sense to me to pay the one-time fee and not the 1.whatever% every year ongoing. Right?

I think you need to feel pretty good about your efforts here. It's commendable that you're working within your workplace to get a better plan.

I'm very familiar with John Hancock. Many years ago (many!), I was working in a small office with a John Hancock 401k and the all-in fees came to about 2%. When I tried to work with the office manager and then the owner about it, I was told that the representative recommending John Hancock was a personal friend of the owner and it was "inconceivable that a close friend would not have the best interests of the business at heart."

You're correct to try and work with your manager (and owner). However, they are not obligated to give you lower cost funds to invest in--their investment line-up is theirs to make, not yours. The ERs you're describing are within the normal range for a small business so you would not have a case for claiming an irresponsible administrator (you can search for average fees for 401k's online). Go with the index fund which is least expensive; it's possible that your administrator may allow a transfer out to an IRA while you're working there but I would not count on it since it's actually in the best interest of the administrator to keep as much money as possible in the program. You would have been given a relatively lengthy description of plan rules earlier so see if it's written in that document.

[LiveSimple]

Yeap seen JH fees as higher… always remind to rollover asap when feasible and allowed…

On the same note just max the 401 K and do not frown upon the fees as in the long run you can rollover to IRA… but if you miss this year 401 K contribution you are missing that tax advantaged bucket…

Look for opportunity to rollover
Next career move to another company
In service rollover if allowed
Roll over at 59.5 years

[vincnt]

I found this in our Summary document:

You may withdraw amounts from accounts for rollover contributions at any time.

[retiredjg]

500 Index Fund - JFIVX (0.55% gross, 0.3% net)

This is usable.

First- do I have any power with the fund manager to enable investment into lower cost options? Any tactical suggestions?

You have no influence on the fund manager and/or John Hancock. You might eventually have some influence on your employer - to pick a better plan. But don't expect too much. The JH salesperson is probably a friend or relative.

https://www.bogleheads.org/wiki/How_to_ ... 01(k)_plan




What are the 5 lowest cost funds available?

Vanguard Growth Index Fund - VIGAX
Vanguard Mid-Cap Value ETF - VOE
Vanguard Small Cap Grow Index - VSGAX
Vanguard Equity-Income Fund - VEIRX
Vanguard High Dividend Yld Idx - VHYAX

What are the ERs of each of these? What are the ERs of BND and VXUS?

Third- I pay about $43/quarter or $129/year on every $10,000 invested. Is this unreasonable or just the price you pay for the employer match, profit share etc?

Some plans have fees that are not picked up by the employer. This is not unusual.

[retiredjg]

My 401k is a Roth. The rollover looks like a very attractive option.

Only certain accounts within your plan are allowed by law to be rolled over while you work there. Your elective deferrals are not included in that list.

A possible exception is if you are over age 59.5 and the plan allows it.

[retiredjg]

Look for In Service Rollover to IRA in your 401K Plan documents. This feature allows participants the option of rolling their account to an IRA. You would continue to contribute to the 401K and periodically perform a rollover.

Before age 59.5, only certain accounts within a 401k (listed below) can be rolled over. And then, only if specifically allowed by the plan. This is law, not plan choice.

1. Money you rolled into the plan.
2. Employer contributions.
3. Forfeitures (seems to be extremely rare)
4. After tax voluntary employee contributions.

A person's elective deferrals (what people think of as employee contributions) cannot be taken out or rolled over before age 59.5 while still working for that employer. The only exception is a hardship withdrawal. A hardship withdrawal cannot be rolled into an IRA and not all plans even allow them.

[123]

The salespeople that sell benefit plans to small employers will often add in programs, like executive life insurance and various deferred compensation programs, that are only for and/or highly favorable for the company's owner/president (purchase decision maker) and sometimes a few other executives. Those at the top may get a more favorable deal under an executive program so they may not care as much about the plans available to all employees, like the 401K. These executive programs don't have to be available to all employees.

A plan provider like John Hancock wants to make money every way possible in connection with a 401K plan so there can be plenty of fees. They may be reluctant to add many funds that are not operated by John Hancock.

If there is some type of bundling deal that makes it very sweet for the CEO/owner you're unlikely to be able to effectuate much change. Sometimes the very smartest people play dumb, it avoids a lot of questions and debate. It's possible the CEO has far more knowledge and insight into what is happening then you suspect. Or maybe not.

[samsoes]

I found this in our Summary document:

You may withdraw amounts from accounts for rollover contributions at any time.

That's golden. Make sure you contribute enough to get your match and satisfy the requirements for it to vest and roll it all out of there at least annually.

[retiredjg]

I found this in our Summary document:

You may withdraw amounts from accounts for rollover contributions at any time.

That's golden. Make sure you contribute enough to get your match and satisfy the requirements for it to vest and roll it all out of there at least annually.

I think you misunderstood. I think the Summary document says you can roll out your rollover contributions - money that you previously rolled into the plan from another plan or an IRA.

[vincnt]

I think you misunderstood. I think the Summary document says you can roll out your rollover contributions - money that you previously rolled into the plan from another plan or an IRA.

Yep, bummer. You're right.

[rich126]

If your company switches over to a new plan, consider advising employees to exit any JH stable value positions.

Legally are you really allowed to do that if you aren't some authorized financial person? I would think giving financial advice could lead to trouble?

Decades ago I think I had a John Hancock account and just tried to find the best offering available and quickly rolled it out once I left that small company. I suppose a bad plan is likely better than no plan at all. Or only put in money you need to for matching and invest elsewhere.

[Artsdoctor]

If your company switches over to a new plan, consider advising employees to exit any JH stable value positions.

Legally are you really allowed to do that if you aren't some authorized financial person? I would think giving financial advice could lead to trouble?

Decades ago I think I had a John Hancock account and just tried to find the best offering available and quickly rolled it out once I left that small company. I suppose a bad plan is likely better than no plan at all. Or only put in money you need to for matching and invest elsewhere.

I did the math many years ago when fees were extraordinarily high. You're always going to want the match but outside of that, I came up with all-in fees over 2% being prohibitive enough that using the plan wasn't worth it, at least for me. Nowadays, fees of magnitude would be exceedingly rare.