A new Aon Hewitt study provides a look at plan sponsors’ concerns over plan costs and what they are doing about them. The good news: More than 82% of plan sponsors review plan fees and costs every year. The bad news: Many employers are not assessing fees evenly regarding all asset classes — just barely more than one-fifth of them have recently restructured their plan’s administrative fees, and only 6% of those which have not done so are likely to in 2014.
"Our research shows more than half currently rely on expense reimbursements from investment options to defray administrative costs,” explained Winfield Evens, CFA, director of Aon Hewitt’s HRO Investment Solutions & Strategy group. “But because of the wide range of payments provided by different asset managers and share classes, in many situations, the majority of plan costs are paid for by a minority of workers. Even participants with the same account balances are often paying significantly different amounts for plan administration. Best-in-class employers are moving away from this approach and are designing their fee model so that an employee would pay the same amount in fees regardless of how their portfolio is allocated."
