Regarding vesting. Unless it is cliff vesting, a portion of the money will be vested each year. In the example of 5 year vesting, you vest at a rate of 20% each year. After 3 years, 60% of the employer match is yours. It’s still money you otherwise would not have.
Also most mutual funds will revert back towards their benchmark. Your mutual funds aren’t that bad. The type of mutual fund shares, and thus their expenses, will be based on the size of the total 401k plan.
To clarify, alpha is a measure of risk adjusted performance. It demonstrates the true value added by the portfolio manager. It takes beta into account in the formula (CAPM). Also, be sure to take notice of R2 (R squared) which is the correlation coefficient. If the R2 is too low, it invalidates alpha and the correct index is not being used.
I think, you ought to at least place 6% in the plan.
