Voya low cost index funds

[DocsRUs]

Hi
Iam wondering if voya has any low cost index funds . I have my retirement plans through my employer with Voya , and the funds are invested as recommended by Voya financial advisor ( free service provided by employer ) in three different funds with expense ratios ranging from 0.45 to 0.68% . I did try to search if they have any low cost index funds but I didn’t find any from my search . Reaching out to forum if anyone has knowledge of this . My employer also has fidelity as a vendor and Iam thinking to move to fidelity if voya doesn’t have any low cost ones , as I have seen low cost index funds in fidelity . Appreciate any advice !!

[The White Coat Investor]

I'd move to Fidelity. I don't recall ever seeing a Voya Index Fund and certainly not at the prices you might be able to get them at at Fidelity. This is a pretty Googlable topic though. If I search Voya Index Funds I find this:

https://individuals.voya.com/product/variable-portfolio/profile/voya-us-stock-index-portfolio

So yes, they do have index funds.

The expense ratio is 0.27%. Not terrible, but nowhere near the leaders in index funds- Vanguard, Fidelity, Schwab, and iShares where they charge 0.00-0.04% or so on their total market funds.

[CordMcNally]

It would probably be easier for you to look at the funds available to you and then post them and the expense ratios. It looks like Voya has quite a few funds but the few I looked at had pretty high ERs. Would you have all Fidelity funds as options through Fidelity? Does your plan have any other fees/expenses? I can almost guarantee you'll have better options through Fidelity.

[Faithful Steward]

Voya is a fairly popular retirement plan provider with hospital systems. Unfortunately, they don't exactly offer the lowest cost fund/subaccount options.

If you can switch to Fidelity, you'll almost certainly find investment options with lower expenses.

[Peds]

DocsRUs wrote:

My employer also has fidelity as a vendor

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you should do this.

assuming Fidelity is offering their index funds.

[jacoavlu]

the other thing to note about such index funds is in addition to being just straight up more expensive in terms of expense ratios, they tend to be less tax efficient, sometimes by a lot. Voya's INGIX fund kicked off about 87 cents of capital gains distributions per share in the middle of the year last year. If you had $100,000 in the fund that amounted to about $5,000 in gains distributions. In a tax deferred account it's no big deal but that's bad news in a taxable account.

[Peds]

jacoavlu wrote:

In a tax deferred account it’s no big deal but that’s bad news in a taxable account.

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one of the few times ill say unnecessary info jac-cousteau.

[DocsRUs]

Thank you all for the advice ... will move to Fidelity !!

[White.Beard.Doc]

Voya offers multiple services.  They offer administrative services for retirement funds and they also offer their own funds.

I have a retirement plan through Voya, but they provide only administration.  The funds offered in our Voya administered plan are through Vanguard and have average fund fees of less than 10 bps.  Voya offered us very low cost administrative fees of less than 15 bps.  So in total, we are paying less than 25 bps all in for our safe harbor 401k/profit sharing plan.  We consider this to be a very low cost for this type of plan.  We chose Voya after researching multiple options and comparing costs and services.

You could consider staying with Voya for administration and add low cost funds to your plan menu.

[litovskyassetmanagement]

White.Beard.Doc wrote:

Voya offers multiple services.  They offer administrative services for retirement funds and they also offer their own funds.

I have a retirement plan through Voya, but they provide only administration.  The funds offered in our Voya administered plan are through Vanguard and have average fund fees of less than 10 bps.  Voya offered us very low cost administrative fees of less than 15 bps.  So in total, we are paying less than 25 bps all in for our safe harbor 401k/profit sharing plan.  We consider this to be a very low cost for this type of plan.  We chose Voya after researching multiple options and comparing costs and services.

You could consider staying with Voya for administration and add low cost funds to your plan menu.

Click to expand...

I don't think OP has a choice, but for those plans that do, I'd stay away from Voya.  Googling voya and fiduciary lawsuits you can find many gems like this one:

https://401kspecialistmag.com/voya-401k-fee-suit-third-party-relationship/

They were the bottom of the barrel when it came service quality.  There is a reason they rebranded.  And it wasn't because they were good to begin with.  You can google that as well.  For the plans where they can get away with, they are using their own funds.  It looks like they've opened their platform to compete, but they are not really competing in terms of quality, that's for sure.  TPAs told me things about their plans and the types of issues they had, and I doubt they improved by much given that it is the same company with a different name.

By the way 15 bps is a huge administrative fee.  Ideally it should be flat/fixed (worst case, maybe 5 bps billed directly at most, if you don't have much assets).  For example, Ascensus charges $3100 flat for any asset level for record-keeping only platform.  So those with $20M in assets would find 15 bps to be ridiculously high. On the order of 10x more than Ascensus fee for the same plan (especially if the number of participants is small). For this kind of money you can hire your own independent TPA, your own ERISA 3(38) and the best record-keeper with a fixed fee, and have some money left over.  I would not trust Voya with any plan's administration, as large record-keepers are not known for having the expertise in the areas of compliance and preventing/fixing plan errors.  Always have your own TPA to oversee any large record-keeper and this will definitely help you save money in the long run, and some record-keeper errors can be quite costly (and plan sponsor is responsible for those as well).

[Lithium]

Kon Litovsky wrote:

White.Beard.Doc wrote:

Voya offers multiple services.  They offer administrative services for retirement funds and they also offer their own funds.

I have a retirement plan through Voya, but they provide only administration.  The funds offered in our Voya administered plan are through Vanguard and have average fund fees of less than 10 bps.  Voya offered us very low cost administrative fees of less than 15 bps.  So in total, we are paying less than 25 bps all in for our safe harbor 401k/profit sharing plan.  We consider this to be a very low cost for this type of plan.  We chose Voya after researching multiple options and comparing costs and services.

You could consider staying with Voya for administration and add low cost funds to your plan menu.

Click to expand…

I don’t think OP has a choice, but for those plans that do, I’d stay away from Voya.  Googling voya and fiduciary lawsuits you can find many gems like this one:

https://401kspecialistmag.com/voya-401k-fee-suit-third-party-relationship/

They were the bottom of the barrel when it came service quality.  There is a reason they rebranded.  And it wasn’t because they were good to begin with.  You can google that as well.  For the plans where they can get away with, they are using their own funds.  It looks like they’ve opened their platform to compete, but they are not really competing in terms of quality, that’s for sure.  TPAs told me things about their plans and the types of issues they had, and I doubt they improved by much given that it is the same company with a different name.

By the way 15 bps is a huge administrative fee.  Ideally it should be flat/fixed (worst case, maybe 5 bps billed directly at most, if you don’t have much assets).  For example, Ascensus charges $3100 flat for any asset level for record-keeping only platform.  So those with $20M in assets would find 15 bps to be ridiculously high. On the order of 10x more than Ascensus fee for the same plan (especially if the number of participants is small). For this kind of money you can hire your own independent TPA, your own ERISA 3(38) and the best record-keeper with a fixed fee, and have some money left over.  I would not trust Voya with any plan’s administration, as large record-keepers are not known for having the expertise in the areas of compliance and preventing/fixing plan errors.  Always have your own TPA to oversee any large record-keeper and this will definitely help you save money in the long run, and some record-keeper errors can be quite costly (and plan sponsor is responsible for those as well).

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Funny, that's not what the cute forest creatures made out of orange paper say in their commercials.

[White.Beard.Doc]

Just one practice’s experience...

Our TPA has had very good experiences with Voya and recommended them over other options.  Voya’s charges for our plan are lower than the fees quoted by Vanguard Ascensus.  We reviewed and compared 4 different high quality options for our platform and chose the least expensive option.

As there are so many different fees that can be split and divided, make sure you are comparing apples to apples.  Ours is just one experience, but we are very happy with our Vanguard funds through our Voya platform.  Ours is clearly a very advantageous plan for our employees and we feel we are providing very high quality funds at low cost.

When we switched to Vanguard/Voya, we estimated a full 30 year career physician would end up with over 300k more at retirement compared with our previous plan.  The switch was based on months of careful review of many options.  We are paying about 25 bps all in, fund fees, administrative fees, and TPA fees all inclusive.

[Peds]

thats the key. you have Vanguard access through Voya.

this is clearly not what the OP has.

[White.Beard.Doc]

Peds wrote:

thats the key. you have Vanguard access through Voya.

this is clearly not what the OP has.

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Yes, we do have access to Vanguard through Voya. I am simply pointing out the possibility that the OP could request access to Vanguard funds through Voya as well.

[litovskyassetmanagement]

White.Beard.Doc wrote:

Peds wrote:

thats the key. you have Vanguard access through Voya.

this is clearly not what the OP has.

Click to expand…

Yes, we do have access to Vanguard through Voya. I am simply pointing out the possibility that the OP could request access to Vanguard funds through Voya as well.

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Unfortunately, as an employee you can't request anything.  This happens at the plan sponsor level, and if the plan sponsor has a specific arrangement with Voya, that's what the employees get stuck with.  This is not like a 403b plan that has several providers that participants have access to.  Changing plan fund lineup takes some work to do, and plan sponsors rarely make big changes, especially if they delegate everything to 'financial advisers' who are not fiduciaries.