By entering in a company name, the fee checker will pull plan information from the Department of Labor’s Form 5500 database and compare its investment-related costs to industry averages. The checker is currently using information from 2012 filings, but will access more current information later this, when all Form 5500 paperwork for 2013 have been filed.
The free report produced by the tool is designed to allow plan sponsors and plan participants to get a better understanding of the effect of investment-related costs over time and to encourage business owners to consider alternatives if appropriate.
According to Tom Zgainer, CEO of America’s Best 401k, based in San Jose, California, research shows more than 30% of sponsors with assets less than $25 million do not know the average expense ratios of the funds in their plan. More than 50% of participants think they pay no investment-related fees, or that their employer pays them, and more than 32% of participants say they do not have the knowledge to understand the effect of fees over time.
“The report from the fee checker is designed to create a starting point for a thorough, plan-specific analysis once we receive additional information,” says Zgainer. “We recognize with the greater emphasis on fee disclosure, plan sponsors are actively looking to lower investment-related fees. However, there are still many plans paying egregious fees without fully understanding the long-term results.”
More information about the online fee checker can be found here.