What is at stake?

A typical midsized plan with $100 million in assets and 2,000 participants generally pays between 0.5 percent to 1 percent of assets, or up to $1 million per year, for total investment and administrative fees. For larger plans, the amount at stake is even greater.

DC plans depend on the valuable services provided by the organizations that manage the investments and service participants’ accounts. However, the bundling of these two services – where fees for plan administration and investment management are combined, and both are calculated as a percentage of assets – has created a scenario where administrative fees vary with asset levels and are not necessarily in line with costs.