Is it normal for a 401(k) plan to have three different companies involved?
We have the local representative for the investment-management company, an administrative company, and a trustee. Each charges a pretty hefty fee. So far, we haven’t seen a marked improvement in our returns to justify these fees. Any words of advice? TB: Many plans operate in a “bundled” environment, in which essentially all trustee and administrative functions are provided by the same organization. This organization also manages all the funds involved or uses a combination of its own and funds from other financial companies. Having a separate administrative company, trustee, and investment-management company will generally be more expensive, unless the plan uses either index or institutionally priced funds. The major issue is the total level of administrative and investment fees rather than the number of organizations. A plan with $5 million or more of assets can be run with fees that total around 1% of plan assets. This will include all administrative, recordkeeping, and trustee serv
