I was looking over my end-of-the-year finances and noticed some really disheartening details about my company's 401k. The company holds a plan through Principal, and the managed 'target date style' fund charges 1.20%. Yikes. I was under the impression that anything below 1% was 'reasonable', but anything above was... not.
Looking around at the other options inside the plan, it doesn't get much better. There are only 12 other funds to choose from, and 6 of those have fee structures even higher than 1.20%.
The dangers of a high-fee plan are obvious, but in this case I just don't feel like I have any choice. It seems like a very poor investment to distribute income into only those funds charging the lowest fees. It's probably the case that fee structures are directly tied to past performance.
Did my plan administrator get duped? Is Principal just a bad company with which to retire? Is there anything I can do?
Addition: For those interested, I spoke with HR responsible for picking the plan. It seems they did due diligence in evaluating a large number of different plans. The problem was the age/size of the company... fewer employees dictated higher fees. On the plus side, as the 401k grows (as a company) the fee % will lower slightly (to around .8%).