How to lower your 403(b) plan fees & fund costs
Why pay more when you can make a smart choice for your retirement savings? Consider the benefits of investing with Vanguard.
Why it’s important to understand 403(b) fees
To get the true story about fees, look at the total, all-in plan price. As the chart shows, our competitors can charge twice as many individual fees.
When you compare the total amount paid for all plan service and investment fees, Vanguard 403(b) Services ranks among the lowest-cost 403(b) plans available.
Transparent recordkeeping fees
Our fees are clear and straightforward. While some 403(b) providers may charge many types of fees fees you may not even realize you re being charged Vanguard has just two:
- An annual recordkeeping fee of $100 per plan participant (billed monthly).
- The investment expense (expense ratio) for each fund you choose for your account.
Straightforward plan management for participants and sponsors
For plan participants
Plan participants will never find a hidden fee or charge. That means no front-or back-end loads, commissions, surrender charges, or asset-based administration "wrap" fees. And we don t charge you for taking a distribution from your account, as many of our competitors do.*
For plan sponsors
Plan sponsors have two options for paying the recordkeeping fee: as a direct plan sponsor expense, or through automated deductions from participant accounts. If applicable, a plan using a third-party administrator (TPA) may charge a TPA fee, which the plan sponsor can deduct from participant accounts.*
Compare Vanguard fees with the competition*
Flexible investment choices for every participant
Target retirement funds
Vanguard Target Retirement Funds offer a complete portfolio in a single fund. With Vanguard 403(b) Services, you have access to our lowest-cost target retirement funds Vanguard Institutional Target Retirement Funds. There are no fund minimums.
Admiral Shares
Vanguard 403(b) Services has the added benefit of offering additional cost savings through the Admiral Shares of our mutual funds with no minimum investment required.
Low fund costs
The Vanguard average expense ratio for mutual funds is ${cf.tokens.expense-ratios.lessThanMFandETFindAvgPercent} less than the industry average.*
For investors, that can mean more potential returns because every penny you save in fund costs is a penny that stays in your account, where it can grow tax-deferred.
Because costs and fees can cut directly into investment returns, it s important to know what your funds cost whether you re an employer choosing a plan or an employee who may have a choice of providers.