401KStatement_070113620x413A choice of many investments including actively managed mutual funds, passive index funds, target date funds, and investment models based on risk tolerance.

Through our relationship with TD Ameritrade as custodian, our 401(k) plans can invest in almost any mutual fund including Vanguard funds. Most custodians charge a trading fee for Vanguard funds since their management expenses are so low and they don’t pay revenue share to offset expenses. A trading fee would be prohibitive in 401(k) plans, since the plans make purchases every payroll. TD Ameritrade opens the door for us to offer Vanguard funds within our 401(k) plans.

TD Ameritrade charges a low maintenance fee of 3 basis points or .03% on plan assets. Most custodians have a minimum fee of $500 and charge 6 basis points or higher on the assets. That fee structure is not workable in a small plan. With TD Ameritrade, we can administer a cost-effective 401(k) plan for plans below $1,000,000 in assets.

The plan can use Vanguard’s target date funds for the qualified default investment alternative fund. These funds have a management fee on average of 17 basis points or .17%. The Vanguard target date funds are consistently rated as some of the best according to Morningstar.

We manage investment portfolios or models within our 401(k) plans. The models are based on risk tolerance and include models for conservative, moderate, moderately aggressive and aggressive investors. An asset allocation mix is determined for each level of risk tolerance and the models are re-balanced quarterly back to the asset allocation. The underlying funds used are all low-fee index funds.

By focusing on low-cost funds, participants can accumulate retirement savings without the drag of high management fees found in most 401(k) plans. Greater accumulation is what makes this the Best 401(k) plan. For more information, call 215-393-0400 or click here to email a request form.