401K PS question for a small group

[manny61986]

I just accepted a new job with a private group.  After reviewing their 401K PS (profit sharing) I was a bit surprised.  Inception to date is approx 47 months.  There is currently only one contributor.  Over the 47 months since inception once I subtracted the management fee of .5% return was at 3.95% which still does not include a record keeping of $1500 knocking it down even further.  The current fund has a large growth objective and has various mutual funds within it including some high fee ones with loads.  The problem is I will not be able to control to what to what funds my money is allocated.  We contacted vanguard and were quoted to set up a 401k with different mutual fund options was $3475 for up to 15 participants and a $1500 installation fee.  Is there a way to do this in a cheaper way that will still allow the group to utilize vanguard funds and provide insight into portfolio structuring. Through the 401K PS I have the option to contribute up to 53K which is nice but I don't want to spend so much money on recordkeeping, etc.

[jfoxcpacfp]

Have you checked Employee Fiduciary? Setup of $500 and annual fee of $1,500. They also use Vanguard funds.

[litovskyassetmanagement]

manny61986 wrote:

I just accepted a new job with a private group.  After reviewing their 401K PS (profit sharing) I was a bit surprised.  Inception to date is approx 47 months.  There is currently only one contributor.  Over the 47 months since inception once I subtracted the management fee of .5% return was at 3.95% which still does not include a record keeping of $1500 knocking it down even further.  The current fund has a large growth objective and has various mutual funds within it including some high fee ones with loads.  The problem is I will not be able to control to what to what funds my money is allocated.  We contacted vanguard and were quoted to set up a 401k with different mutual fund options was $3475 for up to 15 participants and a $1500 installation fee.  Is there a way to do this in a cheaper way that will still allow the group to utilize vanguard funds and provide insight into portfolio structuring. Through the 401K PS I have the option to contribute up to 53K which is nice but I don’t want to spend so much money on recordkeeping, etc.

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Cheaper does not mean better, but that does not mean that you can't get a top notch plan cost-effectively.  Please educate yourself as much as possible about retirement plans, so that you are able to understand what exactly your plan requires:

https://www.whitecoatinvestor.com/how-to-run-a-successful-retirement-plan-for-a-medical-or-dental-practice/

and here:

http://www.dentaltown.com/Dentaltown/Blogs.aspx?action=VIEWPOST&b=143&bp=3376

The choice of the record-keeper is secondary.  There are too many moving parts in ERISA retirement plans, so if you want the lowest cost/highest quality retirement plan you will need to hire a good fiduciary adviser and a knowledgeable Third Party Administrator who can help you set up a custom-designed plan for your practice.  I see way too many messed up and/or high cost group practice plans - many are out there, and I often get calls to find out what can be done to fix them or to decrease cost.  In some cases such plans require a lot of work by the TPA to bring them into compliance with the law (yes, ERISA plans are anything but set and forget).