A monthly fee of 39%??? That would be more than 400% in a year - how is that even possible?
I just report 'em. I don’t explain 'em. I have a spreadsheet, and the high percentage is really a function of not having made any money in a month and owing that minimum deduction. With Call fire fighters, they only get paid if there’s a call, and some months are very quiet.
That said, however, it makes me crazy that he can only put the money in a Money Market essentially “to protect him from himself” with the net result being that he has lost money over the last few years because the interest rates have been so low.
MA certainly has enough smart attorneys that if such was a common occurrence, one would expect a lawsuit.
You’d think, but it seems there are not enough municipal part-timers who are complaining, and so the law remains as it is. I did have a pretty good email exchange back when I was pushing our legislators to change the plan, but it really boiled down to not enough people complaining and so not a problem that was high on the Legislature’s list.
Can you post a link to the summary plan description? I searched for it and it appears to only be available for members.
I’m not sure where to find this on their website. DH only gets annual statements, and as nothing can be changed and there’s only a short time til he retires, I have mostly ignored this. Best I can do is provide you with the spreadsheet (send me a PM, and we can talk offline).
I am familiar with empower. I also use empower. My expenses are roughly 0.05%.
I have been less than impressed with these folks, and only wish our expenses were the same as yours. At the very least, I would have liked him to have been able to choose an index fund.
Empower has, in my experience (my spouse has empower for her 403b), a fairly standard left-column list of functions. Mine has: Account Information, Contributions, Investments, withdrawals, Plan Information.
The second heading under Plan Information is Summary Plan Description.
It is generally a requirement that all participants be provides access to such a document. This is will you find the disclosure of all fees for both the account and the underlying investments - as well as your transfer options between funds. Sometimes the fees are listed in a separate document and might be the case for the 457. My wife’s 403b has her fees disclosed in the Disclosure Notices: Current Investment Returns & Fee Comparison. She pays 0.6% annual in admin charges but her Vanguard 500 fund (VFAIX) charges 0.04%.
Note, Empower is just a recordkeeper. They don’t determine your fees (my wife has much higher fees than me for example). They simply reflect the fees the employer agreed and contracted to for those services. The smaller the employer, the more likely the participant will pay the recordkeeping fees. Perhaps your DH is in a very tiny group?
The second heading under Plan Information is Summary Plan Description.
There’s only one heading under Plan Information, and that is Plan Forms.
Note, Empower is just a recordkeeper. They don’t determine your fees (my wife has much higher fees than me for example). They simply reflect the fees the employer agreed and contracted to for those services. The smaller the employer, the more likely the participant will pay the recordkeeping fees. Perhaps your DH is in a very tiny group?
Interesting. I could be mistaken, but I was under the impression that they handle all of the MA OBRA accounts for all the cities and towns. I do know that DH was also on another FD from which he retired last year, and both that one and the current are administered by Empower.
It has been my experience that they are difficult to deal with. We had all sorts of fun rolling the other OBRA plan over, and I am anticipating similar fun in May.
I do find it odd that they don’t list the Plan summary anywhere, but I cannot find it at all, and it is not a menu choice.
As I say, this one has been a thorn in my side since 2013, and I have done all I can to get it changed to on avail.
<<<<intercst: There are small-company 401k plans that take 5% per year in fees and expenses
Hawkwin: Really? Got link? How common is this really?>>>>
You didn’t address this to me, and I don’t have a link, but I can tell you that the OBRA plan in MA, which is a mandatory deferred salary plan for municipal employees, so is much like a 401k, has exorbitant fees. DH is a call fire fighter, so monthly paychecks are all over the place for him and anyone else in the state who may be in a similar situation or work part-time instead of full time. The OBRA plan, by law, can only be invested in money market funds. But apparently they have a minimum monthly fee which, when taken as a percentage of the contribution, has been outrageous. I did a spreadsheet for his contributions from 2013 through 2017 that I sent to my elected officials to try to get this changed so that he could at least choose a real investment. Monthly fees ranged from a low of 1.65% to a high of 39.69%. These worked out to annual expenses of ranging from 2.5% up to 9.5%.
I may have been too conservative in my observation that you’d do about as well “taking your monthly 401k contribution in cash, and setting it ablaze on the veranda.”