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There are multiple things here. 1) Yes, most investors would do best in index funds. There are mutual fund companies who offer index funds with ER of 1.0 (at least there were during the dot com boom since I remember one from Invesco).
2) The people in the HR/Finance department of any company, whoever is charge, need to take responsibility to shop around for 401k plans. They cannot be incompetent, or be corrupted by asset managers into accepting a certain plan for the companies employees. They need to negotiate the best deal the size of their company allows. I have once had a 401k that a VIP that was already tax deferred, with high fees, offered within the 401k with an additional layer of fees.
3) Now this is a personal belief. Some may call it "conspiracy theory", that's their call. Pure GREED and APATHY by company executives resulted in Pension Plans in companies being done away with and replaced with 401ks. The resulting windfall from the resulting lack of liability were pumped back as "profits" improving earnings / share reported by companies, therefore justifying higher bonus payouts for executives for which they didn't do a damn thing. The outstanding cash might as well have gone to servicing stock options as well. THIS is the REAL tragedy of 401k plans and has contributed greatly to increasing the wealth gap between the rich and the poor.
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1) Yes, most investors would do best in index funds. There are mutual fund companies who offer index funds with ER of 1.0 (at least there were during the dot com boom since I remember one from Invesco).
2) The people in the HR/Finance department of any company, whoever is charge, need to take responsibility to shop around for 401k plans. They cannot be incompetent, or be corrupted by asset managers into accepting a certain plan for the companies employees. They need to negotiate the best deal the size of their company allows. I have once had a 401k that a VIP that was already tax deferred, with high fees, offered within the 401k with an additional layer of fees.
3) Now this is a personal belief. Some may call it "conspiracy theory", that's their call. Pure GREED and APATHY by company executives resulted in Pension Plans in companies being done away with and replaced with 401ks. The resulting windfall from the resulting lack of liability were pumped back as "profits" improving earnings / share reported by companies, therefore justifying higher bonus payouts for executives for which they didn't do a damn thing. The outstanding cash might as well have gone to servicing stock options as well. THIS is the REAL tragedy of 401k plans and has contributed greatly to increasing the wealth gap between the rich and the poor.