[ucaetano]

$8/month = $56/year, divided by Vanguard's 0.0018 equals $31k.

So if the employee has in his 401k:

- $20k, the equivalent fee is 0.41%

- $50k, the equivalent fee is 0.24%

- $120k, the equivalent fee is 0.18%

- $200k, the equivalent fee is 0.16%

- $1M, the equivalent fee is 0.136%

[samb1729]

Could you elaborate on how you got those numbers? You lost me at $56 but I don't understand your percentages either so perhaps I'm missing something here.

[ucaetano]

Percentage = [(56/Capital) + 0.13%]

56 = cost to employer

Capital = how much the employer has in the 401k

0.13% = average fund fee

So if Capital = 200k

Percentage = [56/200k + 0.13%] = 0.028% + 0.13% = 0.16%

My guess is that they're focusing on new plans, not allowing rollover from previous plans and not allowing employees to keep the plan after they leave the company. In this situation they're able to have mostly savers with low or very low balances, and they charge on average higher fees than Vanguard and others.

[mercutio2]

$8/month = $96/year, not $56.

[ucaetano]

Correcting myself, it's $96, not $56. That bumps up the fees a bit. Sadly, too late to edit it.

[thedufer]

8 * 12 is 96, not 56.

[ucaetano]

Ha, good catch, a typo and lack of sleep propagated through the numbers :)