401(k) Fees, Already Low, Are Heading Lower

via Wall Street Journal

Companies are stepping up efforts to offer lower-cost 401(k) retirement plans, a trend that has already sharply driven down average fees and is likely to continue.

An explosion of information about plan fees has helped increase bargaining power for companies in negotiations with fund providers. And a wave of successful lawsuits against companies alleging their plans had high charges has also led many to seek out lower-priced options for employees.

Meanwhile, a new Labor Department rule that would hold financial advisers to higher standards of behavior for retirement accounts will likely lead smaller plans—where fees remain highest—to cut costs, experts say. The result has been big savings for investors’ combined $4.5 trillion nest eggs.

Plan administrative costs fell to their lowest level in a decade last year, consulting firm NEPC LLC said, and overall fees are expected to keep falling.“I see no end in sight,” said Lori Lucas, defined-contribution practice leader at investment-consulting firm Callan Associates Inc.

Read the full article here

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About thebenefitblog

Eric is a Producer at Lockton Insurance Brokers, Inc., the world’s largest privately held commercial broker. Eric has over 23 years of experience in the insurance industry and has spent the last 11 years with Lockton. Eric specializes in Health & Welfare Benefits, Retirement Planning, and Executive Benefits. Eric's clients utilize his expertise in the areas of Plan Due Diligence, Transaction Structure, Fiduciary Oversight, Investment Design, Compliance and Vendor negotiation to improve the operational & financial outcome for each client. The Benefit Blog is a place to share that expertise and industry news.
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