Managing 401(k) fees remains top plan sponsor concern

Managing 401(k) fees remains top plan sponsor concern
Callan survey suggests plan sponsors should consider indirect revenues in fee reviews
JAN 13, 2020

Managing plan fees is the main priority for corporate defined-contribution plan sponsors in 2020, according to the results of an annual survey by Callan, an institutional investment consulting firm.

For the fourth consecutive year, plan sponsors ranked reviewing plan fees as the most important step they took to improve their plan’s fiduciary position over the past year, the study found.

Conducted in the fall of 2019 by Callan, the survey of 114 plan sponsors — including Callan clients and other organizations — found participant communication closely followed fees as the top area of focus for 2020, with financial wellness ranking as the most important area within participant communication for the third consecutive year. 

Among other notable survey findings was that cybersecurity increased only slightly in priority from last year.

The survey found that 87% of plans offer a Roth feature, 93% offer a target-date fund, and 95% of plans offered some form of guidance or advisory service to participants. The prevalence of custom solutions increased modestly to 17.3% in 2019.

“What’s surprising is that over 45% of sponsors don’t evaluate indirect revenue as a part of their fee review,” said Jamie McAllister, a DC plan consultant at Callan. “Since indirect revenue from sources such as managed accounts or rollover assets can be meaningful, we feel it’s important that it be considered in the overall fee evaluation.”

Latest News

The average retiree is facing $173K in health care costs, Fidelity says
The average retiree is facing $173K in health care costs, Fidelity says

Research reveals a 4% year-on-year increase in expenses that one in five Americans, including one-quarter of Gen Xers, say they have not planned for.

Advisor moves: NY-based Coastline wealth adds three teams with over $430M in assets
Advisor moves: NY-based Coastline wealth adds three teams with over $430M in assets

Raymond James also lured another ex-Edward Jones advisor in South Carolina, while LPL welcomed a mother-and-son team from Edward Jones and Thrivent.

Fintech bytes: Vestwell comes through for underserved savers with multilingual support
Fintech bytes: Vestwell comes through for underserved savers with multilingual support

MyVest and Vestmark have also unveiled strategic partnerships aimed at helping advisors and RIAs bring personalization to more clients.

UBS profit beats estimates as Ermotti sees brighter outlook
UBS profit beats estimates as Ermotti sees brighter outlook

Wealth management unit sees inflows of $23 billion.

Evercore to buy advisory firm Robey Warshaw for $196 million
Evercore to buy advisory firm Robey Warshaw for $196 million

Deal will give US investment bank a foothold in lucrative European market.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.