Execs Say Fees Are Fair, Yet Don't Know How Much They Pay
Pensions & Investments (06/25/01) Vol. 29, No. 13 p.3; Jacobius, Arleen

A joint survey conducted by Pensions & Investments magazine and Deloitte & Touche discovered that fewer than 50 percent of the employees in the human resource department, the finance department, or both, who controlled the administration of employee 401(k) plans knew what their fund's average fund expense ratio was, and only 25 percent knew what the plan's total annual administration fees were. However, 84 percent claimed to have a clear understanding of their plan's fees and operating expenses. Some experts believe that respondents were reluctant to calculate the actual fees that the company paid out for their 401(k) plans. Investment management fees and fund operating fees are deducted from fund returns and are not reported as a separate expense, which makes fee calculations difficult. However, those who control the administration of these retirement plans should be aware of what fees are paid because this knowlege can prevent future litigation.


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