One of the Task Force goals is to ensure plan participants pay competitive fees for the investments and services provided. How are service fees paid today?
Administrative and investment management fees are paid by plan participants through the expense ratios of the investment options they have selected. Fees are taken before earnings are credited to participants’ statements, reducing their return on their investments. Reducing plan fees allows more retirement earnings to accumulate for the participants. Even small differences in fees can translate into large differences in returns over time. For example, if a participant invests $10,000 in an investment option that produces an 8 percent annual rate of return before expenses and has annual operating expenses of 1.5 percent, then after 20 years the participant would have roughly $35,236. However, if the investment option has expenses of only 0.5 percent, then the participant would end up with $42,479 a 21 percent difference.
Related Questions
- What registration fees must I plan to pay in addition to becoming an FLL team and buying the robotic kits and fleld set up kits etc.?
- How will service fees be paid in the future and how did the Task Force determine if fees were competitive and reasonable?
- How will the Task Force determine if fees are competitive and reasonable?
