Some costs can’t be negotiated. These relatively fixed costs are the same no matter the size of the plan. Bigger plans can absorb these costs over a larger asset base, meaning the per participant cost is lower.
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Oddly, it’s usually the opposite for mutual funds. Actively managed (higher operating cost) funds tend to perform better during market downturns. Passive (lower operating cost) funds, on the other hand, generally perform better during growth markets.
401k plan sponsors can’t afford to fall victim to the lure of heuristics. Index funds can generate just as much fiduciary headaches as actively managed funds.
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Don’t be surprised if this collective wisdom confirms certain instincts you have always possessed, drives a stake in the heart of a myth you’ve long embraced, and opens your mind to an idea you’ve never thought to consider.
Government workers ignore math, fee mongers misuse math and savvy salesmen abuse math.
Blue and Red approaches to retirement policy, another Fiduciary Rule delay and what’s up with the latest investment fads.
FiduciaryNews.com Trending Topics for ERISA Plan Sponsors: Week Ending 12/8/17
Practical discussions, wither “Fiduciary”? and understanding fees.