America’s Best 401k Study: Small Businesses Overpay for 401k Plans
By a
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
Keywords for this news article include: America's Best 401k, Investment and Finance.
Our reports deliver fact-based news of research and discoveries from around the world. Copyright 2017, NewsRx LLC
ClaimLinx solves spiking insurance premium problem
Selective Appoints Thomas A. McCarthy as New Director
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News