Who's winning, who's losing?
7 replies (most recent on top)
I wonder if the 401k service account fee is going to stay $23/yr regardless of balance.
And more importantly the Verizon Stock fund expense fee remain almost nothing.
VZ Exp Ratio (Gross) (hasn't changed in the last 30+ yrs)
02/01/2020
($0.033 per $1,000)
0.0033%
The index fund rates are pretty low too...
If the GS funds’ expense ratios are higher than what we currently have, employees would be worse off; otherwise, it’s a wash. Our current expense ratios are fairly competitive.
@a2 thanks for putting simply.
This does not impact Fidelity. They will remain as the record-keeper and administrator of 401k accounts. The shift to Goldman Sachs is due to the retirement of Laurence Fulton from VIMCO (Verizon Investment Management Corp.), which managed all investment strategies internally. By moving that role outside of Verizon, Goldman Sachs is acting as an Outsourced Chief Investment Officer (OCIO).
@OP It is not moving from Fidelity to Goldman Sachs, Goldman Sachs is going to be taking over the management of the 401(k) and pension from Verizon to Goldman Sachs. Verizon is exiting from overseeing the operation of the funds. No change for anyone.
We are getting kickbacks from GS to smoothen things, Fidelity did not want to do it. It's legal, they are transferring parts of their profits to us. Now, that'll end up on the balance sheet and P&L. Now you may want to ask who benefits if things improve there - we get some benefits albeit minimal. The execs hit their bonus targets much easier, for them it's significant. So, I'd say Fidelity loses, GS is neutral in short term and profits med/long term. Execs win immediately. The shareholder is in the same position as the worker. I hope this helps.
Why ?