Company DC vs Ideco

[spacedog]

Hi everybody!
I’m posting here as I’m in a similar situation.

I’m being offered a DC from my company.
I can invest up to 55,000 JPY/month.

As I’m new to investment, I’m learning as fast I can.

There is the list of the products offered in the DC plan.
As a newbie, my impression is that it’s not stellar but not so bad either, and half of the fees under 1% are somehow acceptable.
Would you have some comments or recommendations?

I intend to invest the monthly maximum amount (55,000 JPY).

明治安田利率保証年金（５年）Capital seems garanteed (元本確保型の商品)
明治安田DCハートフルライフ プラン30 fees 0.913%
明治安田DCハートフルライフ プラン50 fees 1.067%
明治安田DCハートフルライフ プラン70 fees 1.199%
明治安田日本株式リサーチオープン fees 1.298%
明治安田DC中小型株式オープン fees 1.793%
明治安田日本債券オープン fees 0.66%
明治安田DC外国株式リサーチオープン fees 1.518%
三菱ＵＦＪ ライフセレクトファンド（安定型） fees 0.748%
三菱ＵＦＪ ライフセレクトファンド（安定成長型） fees 0.814%
三菱UFJ ライフセレクトファンド(成長型) fees 0.88%
三菱ＵＦＪ 日本株アクティブオープン（確定拠出年金） fees 1.705%
三菱ＵＦＪ トピックスオープン（確定拠出年金） fees 0.715%
三菱ＵＦＪ 国内債券インデックスファンド（確定拠出年金）
三菱ＵＦＪ インデックス２２５オープン（確定拠出年金）　 fees 0.55%
三菱ＵＦＪ 外国債券オープン（確定拠出年金） fees 1.1%

Thank you for your feedback!

[Kanto]

As a newbie, my impression is that it’s not stellar but not so bad either, and half of the fees under 1% are somehow acceptable.

I am sorry to say these choices are not great. 1% is also very high fee for a passive fund.

Are there no other choices? I cannot see a decent foreign/us equity choice there

[spacedog]

Thanks for your comment.
So it's really not great.
And no, there is no other product available...

The thing is, my company pays a small part of the monthly contribution.
So I have to choose in any case.

[zeroshiki]

This one seems to be the only foreign equity fund one (明治安田DC外国株式リサーチオープン)

It seems to be following the ＭＳＣＩ－ＫＯＫＵＳＡＩ index which is the world except Japan. I'd choose that if I were you.

[Kanto]

This one seems to be the only foreign equity fund one (明治安田DC外国株式リサーチオープン)

It seems to be following the ＭＳＣＩ－ＫＯＫＵＳＡＩ index which is the world except Japan. I'd choose that if I were you.

You are right, that is probably the best of a bad bunch. That fee is insultingly high compared to the Emaxis Slim version of the same fund.

[RetireJapan]

So I have to choose in any case.

It's a matter of comparing the drawbacks of this plan (high fees) to the tax benefits and company match. If the latter is good enough it might be enough to overcome the drawbacks.

The maximum monthly allowance is much more than a personal iDeCo (55,000 vs. 23,000), and the company match could make a big difference.

You could also lobby your HR department to choose a better corporate DC provider

[spacedog]

Thank you all for your advice.

I guess 明治安田DC外国株式リサーチオープン will be my choice...

[Dee.Geo]

I joined by company DB (not DC, but still, almost the same) plan back when I knew nothing about iDeCo. I wish I hadn't.
Since I pay in 10,000 yen a month, I can only pay 12,000 into my iDeCo as opposed to 23,000.
My company DB plan provider is ridiculously conservative and risk-averse. I think they just invest in Japanese government bonds! I would be much better off investing that 10,000 myself in the eMaxis All Country ETF.
However, I can only quite the DB plan if I leave the company, or when I retire! Sucks.
Oh well....

But, would you be able to have another ideco for using the remaining amount of your allowed contribution. For example, if your company DC is set for 10k and your upper limit is 23k, can you have another ideco for the rest of the 13k ? (question is about the present conditions, I just was advised about an upcoming policy change on this matter)

[Dee.Geo]

Company DC:
- DC management Fees are paid by the company.
- Signficant higher limit (should be 55,000 JPY per month).
- Often limited selection of funds.

IDECO:
- Very competitive funds avaiable with the right broker selection
- Small ideco management Fees
- lower limit for company employees (23,000 JPY per month)

Maybe you can ask for the fund lineup for the company. If there are some passiv index funds avaiable (even if is not all world, eg developped countries), then company DC is the way go.

Could you clarify that "DC management fees are paid by company" ? This doesn't mean the fee one would pay on each fund we invest in, right? Probably comparable to the ideco account fee (annual?) which one would pay choosing Monex, SBI etc. ?

[Roger Van Zant]

I joined by company DB (not DC, but still, almost the same) plan back when I knew nothing about iDeCo. I wish I hadn't.
Since I pay in 10,000 yen a month, I can only pay 12,000 into my iDeCo as opposed to 23,000.
My company DB plan provider is ridiculously conservative and risk-averse. I think they just invest in Japanese government bonds! I would be much better off investing that 10,000 myself in the eMaxis All Country ETF.
However, I can only quite the DB plan if I leave the company, or when I retire! Sucks.
Oh well....

But, would you be able to have another ideco for using the remaining amount of your allowed contribution. For example, if your company DC is set for 10k and your upper limit is 23k, can you have another ideco for the rest of the 13k ? (question is about the present conditions, I just was advised about an upcoming policy change on this matter)

I don't think I can have two iDeCo accounts.
My monthly limit is 12,000 yen because I already pay into my company DB plan.
My upper limit is not 23,000 yen....it is 12,000 yen. More's the pity.