Disclosures on 401(k) Fees Confuse Small Businesses (PlanSponsor)

Small business owners on average think 4% is a fair fee on DC plans.

Small business owners are confused by the new 401(k) fee disclosures mandated by the Labor Department and most aren’t likely to switch providers, according to a survey conducted by Sharebuilder 401(k), PlanSponsor reports. Sixty percent of the small business owners say they don’t recall receiving the fee disclosure document. And only a minority seem prepared to take steps in response to it, with just 33% saying they will use the fee data to negotiate with their plan provider and just 26% saying they plan to search for a new provider. Asked what they considered to be a fair fee for a 401(k), on average the small business owners said 4%, which is far higher than the average cost.

 

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