|
 Industry
Insight from Fred Barstein
Focus on Fees and Performance for
Active 401(k) Sponsors in 2009
Speaking very
clearly, plan sponsors who are thinking of changing or
actively searching for a new record keeper in the under
$100 million 401(k) market are most concerned about fees
and fund performance (based on over 1,000 surveys in
2009).
Compared to 2007 results,
more than double the percentage of sponsors in 2009
indicated that their provider could do a better job with
investment performance, while an additional 12.85% of
plan sponsors revealed that they are concerned with
fees.
Meanwhile,
significantly fewer sponsors likely to change record keepers
were dissatisfied with customer service, plan
administration, and record keeping.
Concerns about education and
investment options were relatively modest and did not change
significantly from 2007 to 2009.
The purpose of
401(k) plans is to replace enough income to help
participants subsidize a significant portion of their
retirement needs.
Sponsors have turned their
attention to fees, both for servicing a 401(k) plan and
actively managing the funds in the plan - both of which can
have a dramatic effect on participant account balances.
Even sponsors likely to change
record keepers are indicating that the infrastructure that
supports the 401(k) industry is relatively healthy.
Doubting that education will
make a difference, that the industry can deliver stellar
performance, or even if it could, that participants will be
able to take advantage of it, fees continue to be the focal
point for sponsors that are active in the market.
|
|
2007
|
2008
|
2009
|
'07
v. '09
|
|
Fees
|
71.38%
|
72.69%
|
80.55%
|
12.85%
|
|
Fund Performance
|
30.57%
|
40.46%
|
63.44%
|
107.56%
|
|
Education
|
50.78%
|
44.10%
|
48.29%
|
-4.90%
|
|
Inv
Options
|
22.37%
|
22.80%
|
23.56%
|
5.32%
|
|
Customer Service
|
28.90%
|
21.68%
|
19.75%
|
-31.69%
|
|
Plan Admin
|
23.75%
|
20.81%
|
17.89%
|
-24.67%
|
|
Record Keeping
|
15.44%
|
11.21%
|
13.29%
|
-13.91%
|
|
% of
plans thinking of changing record keepers that
indicate their provider could do a better job at
specific area of service
|
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