America’s Best 401k Study: Small Businesses Overpay for 401(k) Plans
America's Best 401k took a closer look at the asset-based fees paid by small business owners and their employees and found that many overpay for their 401(k) plans.
"Over the past five years, we've received thousands of fee disclosures from virtually every provider in the industry and found that the total costs paid by 401(k) plans with fewer than 100 participants are substantially higher than those reported in most industry studies, which focus upon plans with more participants and more assets," said
The industry has reported (on page 50 at the link here) a median cost for plans with 100 participants or more, and
America's Best 401k's white paper, "
"Until now, there were few extensive studies of plans with fewer than 100 participants," said
America's Best 401k's white paper also notes that most of the plans studied had limited or no access to index funds, relying instead upon actively managed funds, which are substantially more expensive than index funds and typically have revenue-sharing arrangements with plan providers. Many large providers limit access to index funds until plans reach a certain asset level, or provide access after tacking on significant mark-ups to their retail expense ratios.
One plan reviewed by America's Best 401k offered the
Many small business owners and their employees aren't aware of the long-term impact of fees. Over the course of 20 years, a typical small business plan with a starting balance of
About America's Best 401k
We are disruptors. We remember what most plan providers have seemingly forgotten: the money in 401(k) plans is the possession of real people. People with families that deserve to have the benefits of the money they have had the discipline to sock away. In a sense, we are freedom fighters. Freedom from expensive 401(k) plans and underperforming investment options. America's Best 401k offers plan sponsors and participants freedom from expensive 401(k) plans and underperforming investment options. For more information, visit americasbest401k.com.
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SOURCE America's Best 401k
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