A government report concludes that many employers don't know enough about the fees they and their employees pay for 401(k) retirement savings plans.
Congress' nonpartisan Government Accountability Office
Some key findings:
Fees at small plans offered by companies with fewer than 50 plan participants are frequently far higher than those paid at larger companies. For example, sponsors at small plans reported paying an average 1.33 percent of plan assets annually to cover record keeping and administrative services. Large plans with at least 500 participants averaged 0.15 percent.
About 50 percent of plan sponsors did not know if they or their plan participants paid investment management fees, or they mistakenly believed those fees were waived. Investment management fees account for the majority of 401(k) fees overall. They're paid to managers who select stocks, bonds or other investments in funds that 401(k) assets are invested in. Plan sponsors may be unaware because management fees are typically deducted from a participant's account, rather than being invoiced to the plan sponsor, the GAO said.
FEW QUESTIONS ASKED