You just sent me the literature for a special type of self-employed 401(k) called an individual 401(k), not the type of large 401(k) plan a business with multiple employees has to open. The individual 401(k) you sent me can only be used by an entrepreneur and his or her husband or wife (they are both the employer and the employee). They cannot employ any other employees, not even their children. For Vanguard, administering a plan like that isn't terribly expensive since it's not much different in terms of back office work from a plain vanilla IRA so they can offer it more cheaply. If this lady's husband were self-employed, it would be a good suggestion. He's not.

If you worked for a business that had any employees and you wanted to use Vanguard, if the employees had less than $20 million in consolidated retirement balances, you would have to get an institutional quote from them to determine the "all in fee" they are going to charge you, the employer, for offering the plan to your employees. That's not an expense ratio. That's a check that you, the company, have to pay Vanguard to keep the plan running.

The employees will get the low expense ratio but it's an open question as to whether or not you can afford the plan itself, as the employer.

That's why some smaller businesses go with non-Vanguard plans. They figure out it's better to have the employees pay modestly higher expense ratios but maybe get more matching on an extra percentage or two of matching because they (the employee) are saving money. The alternative is no retirement benefits at all. It's all trade-offs.