Yet despite the decrease and greater awareness on the part of the general public surrounding fee issues, many small-business owners and managers don’t have a good feel for how much they or their employees pay in fees to their retirement plans, according to The Pew Charitable Trust.
Pew director John Scott notes the survey results indicate “that many of these business leaders—like many workers—have limited knowledge about plan fees, a reality that can be detrimental to workers’ long-term finances. Whether savers pay high or low fees on their investments can make a large difference over time in the growth of retirement savings.”
Only 19 percent of the small to midsize business leaders said they were “very familiar” with their retirement plan fees, while 34 percent said they were “not at all familiar” with those fees, according to the report. That’s compared to the 31 percent of workers at these size businesses who said in a separate survey that they were “not at all familiar” with their plan fees.
He recommends timely reviews and continuing the ongoing simplification of disclosures as possible solutions.
“Managers and owners of these businesses serve as fiduciaries for the plans they offer and therefore must choose funds that are appropriate for participants,” Scott concludes. “While other factors can and should influence the selection of investments in a plan, plan sponsors need to read and understand available fee information. That information, however, can often be hard to find and also can be confusing for plan sponsors and covered workers.”