Mark D: “I have been enjoying your ‘heavy jockey‘ mutual-fund analogy, and was independently given the same advice by a nephew who toils away in the bowels of Goldman Sachs. But how can those of us operating with 401(k) accounts at our workplace do anything about it? Our employer makes a sweetheart deal with a big firm with a pompous name (and no index funds), and our only choice is among their various overburdened horses.”

Well, some others have told me they’re getting kinda sick of that jockey analogy, and I’m seriously thinking of switching to jet planes with headwinds. Or to swimmers wearing shoes. But the answer to your question is that — other than making some constructive suggestions to your personnel department (which is not impossible; things sometimes do change, given enough time) — I can’t think of much you can do about this.

I suppose that in this job market you might get a 25% raise and a better menu of 401(k) funds to choose from if you switched employers. (Disclaimer: The preceding was a humorous hypothetical. The author, his heirs, assigns, co-assigns, publisher or publishers, friends and acquaintances disclaim all responsibility for any adverse consequence that may result, now and in perpetuity throughout the universe, since time began, if you quit your current job.) On the other hand, if your employer is one of those that match your contribution 50 cents on the dollar, say, as many do (some do more, some less, some do nothing), then you really have a pretty great deal going, despite the high fund expenses.

One way to get your personnel department interested in this issue, and possibly writing memos to top management on an easy way to do something good for the employees, is to direct them to the Mutual Funds Cost Calculator and ask them what they think.

Remember, with a 401(k), at least the tax costs that make some jockeys so heavy (I noticed one at 765 pounds yesterday) do not apply. Still, over many years, a lot of that wonderful 50 cents on the dollar your employer may be contributing to your plan could get eaten back up in fees and transaction costs. Once it sees that, your employer might surprise you and “do the right thing” for its employees.


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