For A Few Dollars More: The Hidden Cost of 401(k) Revenue Sharing

more+
less-

Friends that I have in the industry say that I’m too hard on the revenue sharing practice in 401(k) plans and that I should keep in mind that this practice saves participants money because they typically are the ones who pay for the administration of their 401(k) plans. Without revenue sharing, my friends state that plan participants would lose more of their account balance to fees.

The problem with that argument is that there is a hidden cost with the selection of revenue sharing producing funds which negates their savings. The hidden cost is the actual selection of these revenue sharing producing funds. The hidden costs may be increased mutual fund fees, poor performance, and increased liability for the plan sponsor. There is a price to pay for the selection of mutual funds that slip a couple dollars back to the third party administration firm.

LOADING PDF: If there are any problems, click here to download the file.

Written by:

more+
less-

The Rosenbaum Law Firm P.C. on:

Popular Topics
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
×
Loading...
×
×