A year and a half ago, the TAG 401(k) Pension Plan (an addition to the Motion Picture Industry Pension and Health Plan) came very close to using the mutual fund family Vanguard as its new administrator.
In the end, the marriage between TAG's Plan and the second largest mutual fund couldn't be consummated, but starting today, we have a plethora of Vanguard retirement funds climbing aboard our 401(k) platform, so we've achieved part of what we hoped to do eighteen months ago ...
Vanguard, of course, is the go-to mutual fund family for efficient, inexpensive index funds, and we have now cranked a bunch of them into the TAG 401(k) Plan's investment mix by way of their Target Funds. As of June 1st we now offer the Total Bond Index, the Total Stock Index, the International Stock Indexes (Pacific, Europe and Emerging Markets as well as Treasury Inflation Protected Securities and the Prime Money Market Fund.
Our newer lineup:
Vanguard Target Retirement Income Fund
Vanguard Target Retirement 2010 Fund
Vanguard Target Retirement 2020 Fund
Vanguard Target Retirement 2030 Fund
If you've avoided the TAG 401(k) Pension Plan in the past because you didn't like the roster of funds, maybe this new group of investment choices will be more to your liking.
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7 comments:
A co-worker mentioned that what could nip you in the butt with any 401k are the internal fees associated with each fund.
We get many thick prospectuses when we sign up for all the funds in the 401k but its very difficult to get an idea of what fees are charged (which I assume are craftfully done through the sale of shares).
Is there a better way to get a list of the costs of each fund?
That's why Vanguard is an excellent addition. They were founded on the the notion of low fees, small overhead, and conservative financial values.
I'd like to know what specifically prevented Vanguard from becoming the TAG 401K administrator. Details would be great.
This is great news. Low expenses. Thanks...except at mass mutual I only see the target funds today. No sign of the other indexes...
phil mcnally
The reason Vanguard didn't become TAG's 401(k) administrator was because the total package they offered (expenses, services, etc.) was not as good as what Mass Mutual offered. The big issue the TAG 401(k) has that's unusual is that it's a multi-employer plan. Many potential 401(k) administrators won't even bother with such plans, because the complications are so great.
The plan trustees have looked at Vanguard as potential administrator 3 times: when the TAG 401(k) was first formed, when the decision was made to leave Principal 4-5 years ago, and again about a year ago. The first two times Vanguard didn't even submit a proposal because they had zero experience with multi-employer plans and weren't interested. In the latest go round, they were interested, but their total package wasn't as good as Mass Mutual's. And since we were able to negotiate to now include some Vanguard funds in the Mass Mutual offerings, we did so.
You should know that the trustees watch the plan's funds very closely, and also monitor the administrator closely. The goal is the most flexible, lowest-cost, highest performing 401(k) plan possible. It's not easy, especially when the plan has to deal with a dozen different company payroll departments, but we do our best.
So I am beginning to think the individual funds mentioned above are not going to be available but only via the target retirement funds.
" by way of their Target Funds."
Is that correct? Still thanks for getting these low cost choices...phil
You're correct; Vanguard Index Funds will be available only through Vanguard Target Funds.
However, you can get a pretty good mix of index funds if you choose the Target Fund that most suits your needs.
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