401k Fee Benchmarking Book Released
BALTIMORE, MD, August 25, 2008 -- An increasingly challenging legal and fiduciary climate, resulting from well publicized Congressional hearings on 401k fees, class action lawsuits and the Department of Labor’s focus on fiduciary responsibility, has caused an increasing number of employers to review their 401k plan fees.
These employers and many others will find the newly released, 401k Averages Book 9th Edition to be a very timely and valuable resource. "With all the focus on 401k fees and fiduciary responsibilities, employers need to know how their fees stack up," says Joseph W. Valletta, CFA, co-author of the 401k Averages Book.
Fiduciary Responsibility and Reasonable Fees
"Under ERISA, plan sponsors are held to a high standard of care and diligence. One of their responsibilities is to ensure that their plan costs are fair and reasonable," says David W. Huntley, co-author of the 401k Averages Book, "We think the Averages Book helps the fiduciary answer the fee reasonability test."
The 401k Averages Book is the only source available for comparative 401k average fee information. The book is designed to help employers quickly benchmark their plans. The Averages Book begins with a step-by-step guide on how to benchmark a 401k plan. A plan cost overview illustrating costs across various plan sizes, and eight chapters detailing specific scenarios for plans from 25 to 5,000 participants make up the body of the book. Helpful fee and service worksheets, which allow employers to make apples to apples comparisons, are included at the end of the book.
Investment Expense Accounts for 88% to 99% of Total Plan Costs
This is just one of the many useful pieces of information found in the 401k Averages Book.
"We found that investment expenses account for upwards of 88% of total plan costs in smaller plans and 99% in larger plans," said Huntley. "If an employer really wants to cut their 401k costs they need to examine their investment related expenses."
Wide Range Between Low and High Cost Providers
The Averages Book illustrates the very wide range that exists between the low and high cost providers. According to Valletta, "If you don’t know how much your plan costs, you are asking for trouble. This book will help employers compare their costs and keep their plans from being on the high range of the averages." The range between the high and low total per participant fees charged on a 500 participant plan, with $50,000 average account balances is $195 to $854. The average fee is $587 per participant.
The 9th Edition 401k Averages Book is available for $95. The Averages Book can be ordered by calling 888.401.3089 or via the Internet at www.401ksource.com.
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