Fees related to retirement investment accounts hit another record low in the United States this year, according to a survey.
Investment consulting firm NEPC says recordkeeping costs, the second largest component of total fees, saw the sharpest fall.
The key findings from the 2013 survey show that:
- The annual median total plan cost for plan sponsors was 0.53%, or 53 cents for every US$100 in fund assets, compared to 0.55% in 2012
- The annual weighted average expense ratio was 0.52%, or 52 cents for every $100 in fund assets, this is unchanged from the 2012 survey
- The annual median recordkeeping fee was $80 for each plan participant, compared to $92 in 2012
In 2006, when NEPC first conducted this survey, recordkeeping fees totaled $118 per year for each plan participant. At the time, the median weighted average expense ratio stood at 0.57%.
The steep drop in recordkeeping fees, or costs related to documenting participant activity, has been fueled by new rules aimed at making fees more transparent and well-publicized litigation.
“While recordkeeping fees continue to be charged primarily through revenue-sharing arrangements or asset-based fees, they continue to fall, despite rising asset balances,” the survey states. “The price setters squeezing recordkeeping fees appear to be the bundled providers offering lower fees and plan reimbursement accounts to retain and promote their asset management businesses.”
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