Looking for a Bogleheads sanity check on a 401(k) decision.
My employer recently migrated our 401(k) from Slavic401k to Empower. On the surface the investment lineup looks fine, but digging into the disclosures raised concerns.
Current $60k balance, traditional 401(k)
* **No employer match**
* Long-term index investor
* I separately fund a Roth IRA
* No self-employment income
Investment options
* Fidelity Freedom Index target date funds (~0.05–0.08% ER)
* Fidelity 500 Index (FXAIX) at 0.015%
* Other core index options similarly low cost
* Optional managed account service at ~0.45% AUM (I would not use this)
However, **The plan charges a mandatory asset-based plan administration fee of 1.04% annually, assessed quarterly, regardless of fund choice.**
So even with the cheapest index fund, all-in cost is ~1.05%+ due to admin fees alone (≈$600/year on a $60k balance).
The plan allows in-service distributions/rollovers (confirmed via plan disclosures that include in-service disbursement fees, separate from separation-from-service fees). Still confirming which contribution sources are eligible, but in-service rollover appears permitted at least in part.
I’m considering rolling the funds over to a self-directed Traditional IRA to eliminate the admin fee, but I'm worried other complications for stuff I'm not currently utilizing (backdoor Roth IRA mainly).
Is rolling to a Traditional IRA the rational move here despite the backdoor Roth implications, or is there a compelling reason to keep assets in a 401(k) with a ~1% annual admin drag?
Appreciate any perspectives, especially from those who’ve navigated similar high-fee employer plans.