Accounts & plans
403(b) Services
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.
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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 2:
A monthly recordkeeping fee of $5 per plan participant ($60 annually).
The investment expense (expense ratio) for each fund you choose for your account.
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.*
Plan sponsors have 2 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.**
Plan participant
Anyone who contributes to a retirement plan, or is retired and receiving benefits from it.
The annual operating expenses of a mutual fund or ETF (exchange-traded fund), expressed as a percentage of the fund's average net assets. It's calculated annually and removed from the fund's earnings before they're distributed to investors, directly reducing investors' returns. For example, if you had $10,000 invested in a fund with an expense ratio of 0.20%, you'd pay about $20 a year out of your investment returns.
Front/back-end load
A fee paid to the investment company when you buy an investment on the "front end" or sell it on the "back end."
A fee charged by a broker for buying and selling securities.
A fee that may be charged on early withdrawals from an insurance or annuity contract or to cancel the agreement.
Asset-based administration fee
A fee determined by deducting a percentage of the assets held in an account. Although the percentage stays the same, the dollar amount deducted changes as the account balance changes.
Plan sponsor
An employer that establishes a retirement plan to benefit its employees.
Third-party administrator (TPA)
An individual or organization hired by a plan sponsor to run the retirement plan selected by the sponsor.
Compare Vanguard fees with the competition***
Fees others may charge:
Flat recordkeeping
Asset-based administration
Distribution-processing
Front/back-end loads
Surrender charges
The only fees Vanguard charges:
Low fund costs
The Vanguard average expense ratio for mutual funds is 83% 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.
A type of investment that pools shareholder money and invests it in a variety of securities. Each investor owns shares of the fund and can buy or sell these shares at any time. Mutual funds are typically more diversified, low-cost, and convenient than investing in individual securities, and they're professionally managed.
Delaying the payment of income taxes on income. For example, owners of traditional IRAs do not pay income taxes on the interest, dividends, or capital gains accumulating in their retirement accounts until they begin making withdrawals.
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.
Learn more about target retirement funds
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.
See how Admiral Shares can help keep your costs under control
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What plan sponsors need to know
Vanguard 403(b) Services provides premier recordkeeping, easy plan management, and day-to-day support from an assigned client services team in partnership with Newport Group.**
Find out more about Vanguard 403(b) Services for plan sponsors
What plan participants need to know
You can build for your future today with low-cost funds and dedicated support through Vanguard 403(b) Services.
Find out more about Vanguard 403(b) Services for plan participants
Make retirement saving easy
If you don't know how to start saving for retirement, we can help you figure out how much you'll need and how to balance all your savings goals.
Get the basics about saving for retirement
Consolidate your accounts
Consider moving accounts you hold elsewhere to Vanguard. You'll enjoy more control of your portfolio now and get a clear picture of your investment strategy.
Transfer accounts to Vanguard
You're putting money away for your future, but how do you know if it will be enough?
See if you'll have enough to retire
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*A participant who takes a loan from a 403(b) account (if the plan permits) will incur a one time $50 loan initiation fee and a $25 per-year loan maintenance fee.
**Plans using a third-party administrator (TPA) may authorize Vanguard to deduct the TPA's fees from participant accounts. These fees or charges will be listed as a separate line-item fee and be clearly identified on participant statements.
***Actual participant and/or plan fees may vary depending on the investments and services used. Fees not reflected in the table may include certain participant transaction fees, such as loans, and fees for other services if applicable.
†Some companies charge fees for account setup closeout, or transfer; paper statements; wires; copies of confirmations or checks; or to wire money from a participant's account.
††Vanguard average expense ratio: 0.10%. Industry average expense ratio: 0.60%. All averages are asset-weighted. Industry averages exclude Vanguard. Sources: Vanguard and Morningstar, Inc., as of December 31, 2020.
Investments in Target Retirement Funds are subject to the risks of their underlying funds. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date. An investment in a Target Retirement Fund is not guaranteed at any time, including on or after the target date.
For more information about Vanguard funds or ETFs, visit vanguard.com to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing.