1.436% includes Average Expense Ratio of 1.546% and -0.110%.
Service Providers Expenses: recordkeeping: .432%, financial rep serv .750%, fund company expense .254%=1.436% total.
We have 27 plan participants, total recurring contributions $327K and total external transfer amount $1,300,000.
Expense ratios based on Class 8 (w/ sales and serv fee of 0.750%)
I'd recommend getting at least three quotes for your plan. Include at least one quote from an RIA.
The estimates you provided seem high, and they don't seem to include the underlying fund expenses. Also, paying for record-keeping based on % of assets is frowned upon, as noted in recent rulings/settlements against plan providers. Record-keeping costs generally don't increase with plan size. Rather, they increase when the number of employees increases. You should be paying for record-keeping on a per-employee basis, not as a % of assets.
Jeremy M. Shafer RFM Financial Solutions LLC
Tina 1 AND DONE your plan should have a TOTAL COST of 1% or less for EVERYTHING Record keeping/TPA , Advisor & Investments. I agree with Eric get a TRUE Fiduciary one who assume the role 100% with NO limitation to liability no opt out clause or indemnifications. There are plenty of qualified providers in your area. Feel free to contact me and I would be happy to give you some names.
I would go to the big companies that handle 401(k)s, like Vanguard and Fidelity, and ask them for an all in expenses and plan fee summary. I work with Vanguard and all they need is the number of participants in the plan and a ballpark figure of the total assets in the plan in order to write up a proposal. IMO ask them to only quote you a plan offering low cost index funds - this will reduce the expenses of the plan as well and save everybody significant money over time.
Don't use a plan provided by an insurance company or fund company if possible. Clear conflicts of interest. There should be a smaller RIA or Turn Key provider in your area that will charge less than that and act as a 3(38) or 3(21) Fiduciary. If you ever run into trouble with the DOL or get a complaint from a participant you are 100% responsible for the investment decisions made in your plan UNLESS you use a provider who will take on some Fiduciary responsibility.
The price of the plan always depends on the service. The Department of Labor has said that a "reasonable" fee must be selected. Reasonable depends on the service. If you are getting exceptional service from JHancock, then this fee may not be too high. You also have to understand that you have a smaller plan, and smaller plans have higher fees.
I would 100% get at least 3 quotes. We usually pull around 10 and present the top 3 to the client. If you aren't partnering with an ERISA expert RIA firm, then you should ask around your community for a reference.