This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Are Small Businesses Paying Too Much In 401(k) Fees?

Stocks in this article: COF

Despite the industry’s efforts to make 401(k) plans more transparent, accessible and low cost, a recent national survey by ShareBuilder 401k found that on average, small business owners who read fee disclosure statements still consider three percent a reasonable price to pay. Three percent is three times ShareBuilder 401k’s one percent benchmark.

Meanwhile, the survey found that 62 percent of small business owners think fee disclosures are clearer now than they were in 2012 – the first year the Department of Labor mandated retirement plan providers disclose all administrative and investment fees. A majority (70 percent) of small business owners who review their fee disclosures feel prompted to comparison shop. Twenty-nine percent even said they plan to look for a new retirement plan provider.

“While it’s encouraging to see that plan sponsors find the new disclosures easier to understand – and feel compelled to take action – there remains a lack of awareness regarding what is a reasonable price to pay,” said Stuart Robertson, president of ShareBuilder 401k. “Three percent is at least three times what plan participants should pay for an employer-sponsored retirement plan. It is essential to educate owners and employees on the low-fee options available to all investors.”

The survey found that 86 percent of small business owners are willing to spend more on their plan in return for increased support for the plan and for their employees. This includes access to investment advisers (37 percent) and employee guidance tools and materials (35 percent).

“We continue to advocate that no plan charge employees more than one percent in fees and investment expenses. The more knowledgeable owners and employees are about fees and their impact on savings, the closer they’ll be to attaining financial freedom in retirement,” Robertson continued. “Over the course of a 30- or 40-year career, the difference between one or two percent in fees can translate into to hundreds of thousands of dollars in lost retirement savings.”

1 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs