How to Improve Your 401(k) Plan

If your 401(k) plan has failed to keep up with other plans in terms of investment choices, or if you are otherwise unhappy with it, you can press for change.

Though company managers tend to have a big stake in 401(k) decisions, they aren’t the sole instigators of change. The moves are often spurred by rank-and-file workers who decide to lobby their company benefits office.

Step 1 is to identify who at your company is responsible for overseeing the plan. It may be a human resources director, or it may be a committee of employees that meets regularly, such as every quarter.

Step 2 is to prepare a reasoned case for the changes you’d like to see. A tip about a hot mutual fund from the guy on the treadmill next to you at the gym probably won’t cut it. You need to show, for example, that a certain style of fund would complement other options in the plan and enhance employees’ asset-allocation possibilities, or that a specific fund should replace a similar one in the plan because of detrimental changes or persistent poor performance at the latter.

The committee or human resources executive will then study your proposal, but be patient: For obvious reasons, they won’t make a move willy-nilly.

If you get stonewalled or simply lack patience, you might want to write a letter to the company’s chairman or chief executive, suggests Larry Stahly, a principal at Buck Consultants.

“It’s amazing how quickly the suggestions will be studied when they’re passed along from the CEO,” he said.