Comments on: Redesigned 401(k) Statement Includes List of Fees http://www.consumerismcommentary.com/2007/04/19/redesigned-401k-statement-includes-list-of-fees/ A premiere personal finance blog, established 2003. Within, Flexo discusses his own experiences with money, and he and other authors comment on a wide range of personal finance topics. Sat, 21 Nov 2009 16:42:00 -0500 http://wordpress.org/?v=2.8.5 hourly 1 By: Jim Bigham http://www.consumerismcommentary.com/2007/04/19/redesigned-401k-statement-includes-list-of-fees/#comment-111076 Jim Bigham Tue, 05 Jun 2007 15:24:44 +0000 http://www.consumerismcommentary.com/2007/04/19/redesigned-401k-statement-includes-list-of-fees/#comment-111076 J comments, "Who knows what they’re charging...Even the fact sheets for those funds are vague and open to interpretation with respect to the fees". This should be unacceptable. There is no question that the plan sponsor could tell you to the PENNY how much they paid in health premiums last quarter because they got a bill and cut a check. Not so with the retirement plan. Having worked behind the curtain so to speak as a vendor I can tell you that participants and employers have no idea what the real costs are. The actual expense ratio for that "fund" is likely 25-400% higher than you'll see on your statement since funds aren't required to include brokerage commissions in their statement of operations (annual report). It's one of many, many dirty little secrets. Best of luck all. J comments, “Who knows what they’re charging…Even the fact sheets for those funds are vague and open to interpretation with respect to the fees”. This should be unacceptable. There is no question that the plan sponsor could tell you to the PENNY how much they paid in health premiums last quarter because they got a bill and cut a check. Not so with the retirement plan. Having worked behind the curtain so to speak as a vendor I can tell you that participants and employers have no idea what the real costs are. The actual expense ratio for that “fund” is likely 25-400% higher than you’ll see on your statement since funds aren’t required to include brokerage commissions in their statement of operations (annual report). It’s one of many, many dirty little secrets. Best of luck all.

]]> By: AllFinancialMatters » Blog Archive » JLP’s Weekly Roundup http://www.consumerismcommentary.com/2007/04/19/redesigned-401k-statement-includes-list-of-fees/#comment-94354 AllFinancialMatters » Blog Archive » JLP’s Weekly Roundup Tue, 24 Apr 2007 04:31:28 +0000 http://www.consumerismcommentary.com/2007/04/19/redesigned-401k-statement-includes-list-of-fees/#comment-94354 [...] Flexo’s 401(k) statement now shows fees. [...] [...] Flexo’s 401(k) statement now shows fees. [...]

]]> By: fivecentnickel.com http://www.consumerismcommentary.com/2007/04/19/redesigned-401k-statement-includes-list-of-fees/#comment-93547 fivecentnickel.com Fri, 20 Apr 2007 11:28:25 +0000 http://www.consumerismcommentary.com/2007/04/19/redesigned-401k-statement-includes-list-of-fees/#comment-93547 Weekly Roundup - 04/20/07... Here’s a quick look at some of the articles that caught my eye over the past week… FMF asks if going to grad school is a financial mistake. JLP talks about teaching high school kids about personal finance. Flexo broke down his 401(k) stat... Weekly Roundup – 04/20/07…

Here’s a quick look at some of the articles that caught my eye over the past week…

FMF asks if going to grad school is a financial mistake.
JLP talks about teaching high school kids about personal finance.
Flexo broke down his 401(k) stat…

]]> By: Flexo http://www.consumerismcommentary.com/2007/04/19/redesigned-401k-statement-includes-list-of-fees/#comment-93313 Flexo Thu, 19 Apr 2007 21:23:56 +0000 http://www.consumerismcommentary.com/2007/04/19/redesigned-401k-statement-includes-list-of-fees/#comment-93313 Kurt: I think I phrased that wrong. It's not the increase of balance between the quarter's ending balance and opening balance. I believe it's the weighted average return of every $1 invested, whether that $1 was in the account at the beginning of the quarter or deposited some time throughout the quarter. Kurt: I think I phrased that wrong. It’s not the increase of balance between the quarter’s ending balance and opening balance. I believe it’s the weighted average return of every $1 invested, whether that $1 was in the account at the beginning of the quarter or deposited some time throughout the quarter.

]]> By: Kurt http://www.consumerismcommentary.com/2007/04/19/redesigned-401k-statement-includes-list-of-fees/#comment-93306 Kurt Thu, 19 Apr 2007 20:58:31 +0000 http://www.consumerismcommentary.com/2007/04/19/redesigned-401k-statement-includes-list-of-fees/#comment-93306 "It clearly stated my account performance, taking cash flow into account, for the first quarter: 3.41%." No one else thinks this is the worst number in the history of financial reporting? Why include cash inflows? That's like recording your car's fuel efficiency by dividing the miles traveled in a year by the difference in the gas tank reading on Jan 1 and Dec 31. “It clearly stated my account performance, taking cash flow into account, for the first quarter: 3.41%.”

No one else thinks this is the worst number in the history of financial reporting? Why include cash inflows? That’s like recording your car’s fuel efficiency by dividing the miles traveled in a year by the difference in the gas tank reading on Jan 1 and Dec 31.

]]> By: J http://www.consumerismcommentary.com/2007/04/19/redesigned-401k-statement-includes-list-of-fees/#comment-93293 J Thu, 19 Apr 2007 19:52:11 +0000 http://www.consumerismcommentary.com/2007/04/19/redesigned-401k-statement-includes-list-of-fees/#comment-93293 Flexo, The statement may say 0.00% for the Core Equity and Small Company Stock account but remember that these are separate accounts. Who knows what they're charging. Even the fact sheets for those funds are vague and open to interpretation with respect to the fees. This has always been a mystery in our office and we're convinced the ratio is somewhere close to 1%. PS: The new LSV fund with the 0.65% ratio is a very attractive fund with a great team of portfolio managers behind it. Flexo, The statement may say 0.00% for the Core Equity and Small Company Stock account but remember that these are separate accounts. Who knows what they’re charging. Even the fact sheets for those funds are vague and open to interpretation with respect to the fees. This has always been a mystery in our office and we’re convinced the ratio is somewhere close to 1%.

PS: The new LSV fund with the 0.65% ratio is a very attractive fund with a great team of portfolio managers behind it.

]]> By: tinyhands http://www.consumerismcommentary.com/2007/04/19/redesigned-401k-statement-includes-list-of-fees/#comment-93286 tinyhands Thu, 19 Apr 2007 18:38:40 +0000 http://www.consumerismcommentary.com/2007/04/19/redesigned-401k-statement-includes-list-of-fees/#comment-93286 Don't chase last quater's/year's returns, you already know that. Diversification among aggressive growth funds is statistically the best strategy for investors with a 15-20 year horizon. Don’t chase last quater’s/year’s returns, you already know that. Diversification among aggressive growth funds is statistically the best strategy for investors with a 15-20 year horizon.

]]> By: tolak http://www.consumerismcommentary.com/2007/04/19/redesigned-401k-statement-includes-list-of-fees/#comment-93282 tolak Thu, 19 Apr 2007 17:39:22 +0000 http://www.consumerismcommentary.com/2007/04/19/redesigned-401k-statement-includes-list-of-fees/#comment-93282 Find out who makes the fund selections and don't be shy to enter into a discussion. I found that my company has a fund selection committee which works with an outside consultant and they were open to questions/suggestions and even putting me in touch with their consultant. The selection of funds is narrow because they want to "keep it simple" for employees, which they see as unsophisticated investors, not because it's expensive to have a greater variety. Your company may have other reasons, but don't assume from the start it's not a matter for discussion. Find out who makes the fund selections and don’t be shy to enter into a discussion.

I found that my company has a fund selection committee which works with an outside consultant and they were open to questions/suggestions and even putting me in touch with their consultant.

The selection of funds is narrow because they want to “keep it simple” for employees, which they see as unsophisticated investors, not because it’s expensive to have a greater variety. Your company may have other reasons, but don’t assume from the start it’s not a matter for discussion.

]]> By: Jealous http://www.consumerismcommentary.com/2007/04/19/redesigned-401k-statement-includes-list-of-fees/#comment-93281 Jealous Thu, 19 Apr 2007 17:37:49 +0000 http://www.consumerismcommentary.com/2007/04/19/redesigned-401k-statement-includes-list-of-fees/#comment-93281 I'm jealous that you even have the choice of an index fund with low expenses. My wife's funds are junk, with mid-high expenses. I'm going to check into an 'in-service withdrawal', to see if I can roll much of the money over into an IRA while keeping her ongoing contributions and company match. But they'll probably tell me to take a hike. I’m jealous that you even have the choice of an index fund with low expenses. My wife’s funds are junk, with mid-high expenses. I’m going to check into an ‘in-service withdrawal’, to see if I can roll much of the money over into an IRA while keeping her ongoing contributions and company match. But they’ll probably tell me to take a hike.

]]> By: F2O http://www.consumerismcommentary.com/2007/04/19/redesigned-401k-statement-includes-list-of-fees/#comment-93214 F2O Thu, 19 Apr 2007 13:04:27 +0000 http://www.consumerismcommentary.com/2007/04/19/redesigned-401k-statement-includes-list-of-fees/#comment-93214 I received my statement last Friday and was just as surprised to see the fees all laid out like that. I was wondering about the "GoalMaker" that was pushed a few years ago. Does it lead people into the more expensive funds? I personaly figure out my own asset allocation, but I know of a bunch of people that dump their contributions in and let the GoalMaker take care of it. Also, the company contributions can be moved out of the company stock at any time (unless you are a designated person). I received my statement last Friday and was just as surprised to see the fees all laid out like that. I was wondering about the “GoalMaker” that was pushed a few years ago. Does it lead people into the more expensive funds? I personaly figure out my own asset allocation, but I know of a bunch of people that dump their contributions in and let the GoalMaker take care of it.
Also, the company contributions can be moved out of the company stock at any time (unless you are a designated person).

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