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Is There A Way To Change The Company That Manages Your 401(k)?

In most circumstances it is not possible to change the organization which has been contacted by an employer to manage individual retirement accounts such as 401(k) plans. Outside of experiencing a life event such as retiring, changing jobs or turning 59 1/2, there are few options other than to work within the existing investment opportunities provided by an employer.

It can often be more beneficial to try and modify a current investment strategy using the options provided by the employer's 401(k) plan or to discuss with management in charge of the 401(k) plan options to see if more investment opportunities can be made available for employees. There may be nothing particularly wrong with what is being offered by the employer but like any investment, annual review and diversification of funds might lead to better returns and faster account growth.


Many company sponsored 401(k) plans are contracted with investment companies to manage employee accounts. Because they're managed by financial companies there is normally a wide selection of investment opportunities employees can choose from when managing their accounts. By asking questions and being proactive, an employee who had all their funds in a money market mutual fund might see better returns by spreading funds around more evenly among different available investment vehicles.

Employer Matching

Because of the tax benefits provided by the Federal Government to employers who offer retirement accounts for employees many employers will offer matching of funds contributed to company sponsored 401(k) plans. This is another reason why it is often not advantageous to look outside of a company sponsored retirement plan to external sources. Some employers provide significant matching up to a certain percentage which can result in rapid account growth if properly invested.

Make Suggestions

Employers often want to hear from their employees to get a better understanding of how the 401(k) plan options are perceived and what is thought of the current investments available. Many employers have a review process and will take suggestions if employees had experience from a former organization retirement plan or have conducted due diligence and offer credible suggestions for investment alternatives.


It may also be worthwhile to provide feedback on education initiatives for employees so they better understand what investments are available and how best to maximize retirement plan returns. Company sponsored classes conducted by the contracted financial institution can help employees better understand what is available and answer any questions minimizing any concerns employees have regarding their 401(k) accounts.


Technically it is possible to move funds from a company sponsored 401(k) plan into an Individual Retirement Account or have some other life event which makes the funds available for use. However, this usually isn't the best option and it is better to work within the company's framework to make it better for all involved. Penalties, taxes and various fees may be incurred from changing retirement accounts or withdrawing funds. Keep this in mind when looking to change plans because the grass may not always be greener on the other side.