401 que?

My two years and change at a long-dead company back East did provide me with an enduring (one can hope) legacy: participation in 401(k)s. I find it odd, though, that despite being so deeply embedded in the national economy and psyche, these plans remain so little understood and, in some regards, so darn weird.

First of all, even at companies that claim to be committed to employee participation, get-out-the-participation drives rarely seem to go beyond a terse introduction upon hiring. I keep hearing that opt-out enrollment is becoming common, but I've never encountered it or encountered anyone who has encountered it.

Then there are the inexplicable (literally -- just try and find anyone to explain these things; you can't) variations among plans. My most-recent employer and my current employer both use Fidelity as a plan administrator, yet the plans couldn't be more different. My former employer offered a gargantuan range of funds, perhaps too many; the current one offers a peculiarly small list, and it is dominated by high-cost funds that aren't even managed by Fidelity. Each employer, I believe, gets to tell the plan administrator what funds to include. I can't imagine the conversation that led to either of these lists.

The fund that I embraced at my last job and hoped to continue contributing to at the new one, Fidelity Four-in-One Index Fund, is not on the current list. The next-closest thing in terms of diversification is one of those retirement target-date funds, which is fine, except that its administrative fee is eight hundred percent that of the index fund. (Eight-tenths of a percent as opposed to one-tenth of a percent.) What do I get for those extra seven-tenths of a percent? Absolutely nothing, if history is any judge: the side-by-side performance charts that Fidelity provides are, for the purposes of a retail investor, identical.

And yet there is one feature of the new plan that I adore, and that more than makes up for any of its faults: funds appear in my account mere hours after the market close on payday. My previous employer, by contrast, held onto money in accounts payable for up to several months, until the last possible day before breaking the law. I was evidently the only person to notice this, let alone point out to payroll that it didn't seem like a healthy practice.

Finally there is the peculiar influence that dollar-cost averaging has on my mental state: while participating in a 401 I can't decide whom to root for, Team Bull or Team Bear. I know that my wishing for things doesn't make them happen. Still, I ought to have my priorities straight!