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What 401(k) Plan Should I Suggest to My Employer?

Question: I’d like to suggest a low-cost 401(k) plan to my employer. How can I find options?

— Ron Moe, Carson City, Nev.

Answer: In the 401(k) world, there’s a long-standing debate over how much bang you actually get for your management-fee buck. But one thing that influences the cost-efficiency of an employer’s fund offerings is the company’s size. Brokers may be more willing to discount their fees for bigger firms with employee account balances that average at least $50,000, says David Wray, president of the Plan Sponsor Council of America, an industry association. If you work for a smaller company, he says, you can ask your employer to add cheaper index funds to the lineup (fees run $13 to $20 per $10,000 invested, compared with $70 to $90 for actively managed funds).


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