SURVEY OF 401(k) PLAN SPONSORS ON FEES
U.S. Government Accountability Office
Contents
- Instructions
- Background on Company and 401(k) Plan
- Plan Features, Design, and Service Arrangements
- Plan Service Providers
- Plan Investment Vehicles
- Plan Features - Group Variable Annuities
- Plan Fees and Services
- Plan Fees, Cont.
- Plan Fees - Providers
- Comparing and Assessing Service Provider Fees and Services
- Comparing and Assessing Fees - Benchmarks
- Comparing and Assessing Fees - Resources
- Plan Fee Disclosures
- Plan Fee Disclosures - Revenue Sharing
- Plan Fee Disclosures - Participants
- Additional Plan Fee Information
- Survey Checklist
Instructions
To learn more about completing the questionnaire, printing your responses, and who to contact if you have questions, _____.
Background on Company and 401(k) Plan
1. As of the end of the 2010 calendar year, about how many employees did your company have (full- and part-time employees)?
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Less than 50 employees | 73.9 | 70.9-77.0 |
| 50-499 employees | 22.6 | 19.4-25.7 |
| 500+ employees | 3.5 | 1.9-6.0 |
2. At the end of the 2010 calendar year, approximately how many participants - including active employees and retired or
separated employees who either received benefits or were entitled to future benefits - did the 401(k) plan, _____, have?
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Less than 50 participants | 80.5 | 78.5-82.5 |
| 50-499 participants | 17.2 | 15.1-19.3 |
| 500+ participants | 2.3 | 1.0-4.5 |
3. For the 401(k) plan, _____, what were the total plan assets at the end of the 2010 calendar year?
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Less than $100,000 | 11.5 | 7.7-16.4 |
| $100,000 - $500,000 | 25.9 | 20.2-31.5 |
| $500,000 - $1million | 18.7 | 13.8-24.5 |
| $1million - $5million | 34.1 | 28.4-39.7 |
| $5million - $10million | 5.9 | 3.7-8.9 |
| $10million+ | 3.9 | 2.2-6.5 |
Plan Features, Design, and Service Arrangements
4. Did your company match a percentage of your employees' contributions to the 401(k) plan identified in the introductory letter to this questionnaire for plan years 2007, 2008, 2009, or 2010?
A. Did your company match a percentage of your employees' contributions for any of the following plan years:
2007, 2008, 2009 or 2010?
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Yes, (for some or all employees) | 69.5 | 63.6-75.4 |
| No | 30.5 | 24.6-36.4 |
B. If your company's plan matched employees' contributions during plan years 2007, 2008, 2009 or 2010, please
indicate if you made any of the following changes to the contribution matching feature.
(If you answered "Yes" in A, then answer B below.)
1. Reduced or suspended contribution matching between plan years 2007 and 2010 and have not reinstated a match.
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Checked | 8.1 | 4.7-12.9 |
| Not Checked | 91.9 | 87.1-95.3 |
2. Reduced or suspended contribution matching between plan years 2007 and 2010 and have reinstated a match.
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Checked | 5.2 | 2.6-9.1 |
| Not Checked | 94.8 | 90.9-97.4 |
3. Made no changes to contribution matching between plan years 2007 and 2010.
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Checked | 75.1 | 69.0-81.3 |
| Not Checked | 24.9 | 18.7-31.0 |
4. Increased contribution matching between plan years 2007 and 2010.
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Checked | 4.1 | 1.7-8.0 |
| Not Checked | 95.9 | 92.1-98.3 |
If your company made a change to its match between 2007 and 2010, please specify why:
5. Does your plan contain an automatic enrollment feature?
Under automatic enrollment, workers are enrolled into the plan automatically, or by default, unless they explicitly choose to opt out. Typically, employers who have adopted automatic enrollment must also establish default contribution rates and
default investment vehicles for workers who do not specify these choices on their own.
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Yes | 16.9 | 12.5-22.0 |
| No | 78.4 | 73.2-83.5 |
| Do not know | 4.8 | 2.3-8.6 |
6. In general, what kind of arrangement best describes the contracts your company has with outside entities that provide services to the 401(k) plan?
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Bundled - one company provides most of your 401(k) plan services, such as recordkeeping, investment advice, and brokerage services, directly or through subcontracts with other companies | 55.5 | 49.2-61.7 |
| Unbundled - your company uses a combination of different service providers to manage and operate your plan | 44.2 | 37.9-50.4 |
| Do not know | 0.4 | 0.0-1.7 |
7. Which of the following statements best describes how your company's 401(k) plan is managed, which includes functions such as reporting plan information to the federal government and evaluating the services provided to the plan and the fees for those services?
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| We have in-house staff, such as human resources and accounting departments, who handle recordkeeping, reporting, and compliance issues, among other things. | 4.6 | 2.3-7.9 |
| We hire outside entities, such as a plan consultant, an investment advisor, or a third-party administrator, to handle most of the plan administrative functions. | 57.4 | 51.3-63.5 |
| We use both in-house staff and outside entities to administer our plan. | 38.1 | 32.1-44.0 |
8. Do any of the following outside entities your company hires serve as a fiduciary in any capacity when
providing services to your plan?
Note: A fiduciary is anyone - such as a sponsor, trustee, investment advisor, or
other company that provides services to the plan - who has discretionary authority or control over the management or
administration of the plan, including plan assets. Typically, the duties the person or provider performs for the plan
determines whether that person is a plan fiduciary, rather than their title or position.
a. Retirement consultant/Investment advisor
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Fiduciary | 21.7 | 16.6-26.9 |
| Not a Fiduciary | 52.7 | 46.3-59.1 |
| Do Not Know | 9.9 | 6.4-14.4 |
| Not Applicable | 15.7 | 11.2-21.1 |
b. Third-party administrator
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Fiduciary | 13.5 | 9.5-18.5 |
| Not a Fiduciary | 62.5 | 56.2-68.8 |
| Do Not Know | 10.0 | 6.3-14.7 |
| Not Applicable | 14.0 | 9.8-19.3 |
c. Bundled provider
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Fiduciary | 16.0 | 11.6-21.1 |
| Not a Fiduciary | 43.4 | 36.8-49.9 |
| Do Not Know | 11.5 | 7.6-16.6 |
| Not Applicable | 29.1 | 23.1-35.2 |
d. Accountant
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Fiduciary | 2.1 | 0.8-4.6 |
| Not a Fiduciary | 63.8 | 57.5-70.2 |
| Do Not Know | 8.1 | 4.9-12.5 |
| Not Applicable | 26.0 | 20.1-31.8 |
Please specify if there are any other outside plan fiduciaries:
Plan Service Providers
9. As of the end of calendar year 2010, who were the outside entities your company hired to service the plan,
and what services did they provide?
Note: Plan providers include bundled providers, recordkeepers, plan consultants, investment advisors, and third-party administrators.
a. Provider 1
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Provider listed by respondent | 100.0 | 99.2-100.0 |
| Provider not listed | 0.0 | 0.0-0.8 |
What services did this company/firm provide to your 401(k) plan? (Check all that apply.)
1. Administration, Data intentionally not reported
2. Recordkeeping, Data intentionally not reported
3. Plan investment advice (i.e. selecting and monitoring investment options), Data intentionally not reported
4. Investment products (i.e. mutual funds, annuities, self-directed brokerage accounts, etc.), Data intentionally not reported
5. Education to plan participants, Data intentionally not reported
b. Provider 2
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Provider listed by respondent | 66.8 | 60.8-72.7 |
| Provider not listed | 33.2 | 27.3-39.2 |
What services did this company/firm provide to your 401(k) plan? (Check all that apply.)
1. Administration, Data intentionally not reported
2. Recordkeeping, Data intentionally not reported
3. Plan investment advice (i.e. selecting and monitoring investment options), Data intentionally not reported
4. Investment products (i.e. mutual funds, annuities, self-directed brokerage accounts, etc.), Data intentionally not reported
5. Education to plan participants, Data intentionally not reported
c. Provider 3
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Provider listed by respondent | 26.3 | 20.7-31.9 |
| Provider not listed | 73.7 | 68.1-79.3 |
What services did this company/firm provide to your 401(k) plan? (Check all that apply.)
1. Administration, Data intentionally not reported
2. Recordkeeping, Data intentionally not reported
3. Plan investment advice (i.e. selecting and monitoring investment options), Data intentionally not reported
4. Investment products (i.e. mutual funds, annuities, self-directed brokerage accounts, etc.), Data intentionally not reported
5. Education to plan participants, Data intentionally not reported
d. Provider 4
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Provider listed by respondent | 3.7 | 1.7-6.9 |
| Provider not listed | 96.3 | 93.1-98.3 |
What services did this company/firm provide to your 401(k) plan? (Check all that apply.)
1. Administration, Data intentionally not reported
2. Recordkeeping, Data intentionally not reported
3. Plan investment advice (i.e. selecting and monitoring investment options), Data intentionally not reported
4. Investment products (i.e. mutual funds, annuities, self-directed brokerage accounts, etc.), Data intentionally not reported
5. Education to plan participants, Data intentionally not reported
Plan Investment Vehicles
10. During the 2010 calendar year, which types of investment vehicles did your company offer within the plan?
a. Mutual Funds - Mutual funds are pools of investments in a portfolio of securities, such as stocks, bonds, and commercial paper, managed by a professional investment advisor.
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Offered | 80.3 | 75.1-85.6 |
| Did Not Offer | 10.0 | 6.5-14.7 |
| Do Not Know | 9.6 | 6.0-14.5 |
1. Retail Mutual Funds - Mutual funds that are available to the general public.
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Offered | 55.2 | 48.5-61.9 |
| Did Not Offer | 17.9 | 13.0-23.6 |
| Do Not Know | 27.0 | 21.0-33.0 |
2. Institutional Mutual Funds - Mutual funds that are generally available to plans that exceed certain plan asset levels, and are generally not available to individuals.
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Offered | 36.4 | 29.9-42.9 |
| Did Not Offer | 31.2 | 24.9-37.5 |
| Do Not Know | 32.4 | 26.0-38.7 |
b. Collective Trust Funds - Similar to mutual funds, these are trusts managed by a bank or a trust company that pool investments of retirement plans or other institutional investors. These products are typically not available to individua l investors.
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Offered | 14.1 | 9.9-19.3 |
| Did Not Offer | 57.6 | 50.9-64.2 |
| Do Not Know | 28.4 | 22.2-34.5 |
c. Annuities - An annuity is a contract between a plan participant or sponsor and an insurance company, under which the participant makes a lump-sum payment or a series of payments and the insurance company provides a payout for an agreed-up on span of time.
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Offered | 8.4 | 5.0-13.2 |
| Did Not Offer | 67.5 | 61.1-73.9 |
| Do Not Know | 24.1 | 18.1-30.0 |
d. Insurance Company Accounts - These represent accounts with insurance companies, such as in stable value funds and mutual funds. Stable value funds are designed to preserve the total amount of participants' contributions, or their principal, while also providing steady, positive returns.
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Offered | 16.9 | 12.5-22.2 |
| Did Not Offer | 57.1 | 50.6-63.7 |
| Do Not Know | 25.9 | 19.9-31.9 |
e. Self-Directed Brokerage Accounts - These allow individual plan participants to invest some or all of their account balance through the brokerage service. Participants have the ability to invest in a range of investment options that may include stocks, bonds, and mutual funds.
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Offered | 25.8 | 19.8-31.8 |
| Did Not Offer | 57.9 | 51.3-64.5 |
| Do Not Know | 16.3 | 11.5-22.1 |
Plan Features - Group Variable Annuities
11. Within the past 5 years, did your plan have a group variable annuity contract? And if so, did your company
terminate the contract or renegotiate its terms during the past 5 years?
Group variable annuities are usually offered by insurance companies, sometimes in
partnership with or marketed through a mutual fund or investment management company.
The variable annuity contract typically contains its own set of subaccount investment options,
similar to the investment options offered in plans serviced by other providers. Assets in a
group variable annuity contract are wrapped into a set of life-based insurance guarantees, such as a
guaranteed lifetime income option and a minimum death benefit. The wrapper is placed around the bundle
of subaccount investment options.
A. Within the past 5 years, did your plan have a group variable annuity contract?
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Yes, | 11.1 | 7.5-15.6 |
| No | 71.5 | 65.8-77.3 |
| Do not know | 17.4 | 12.7-23.0 |
B. If your company terminated the contract or renegotiated its terms during the
past 5 years, what was the outcome of your company's actions?
If you answered 'Yes' to A, then answer B below. (Check all that apply)
1. Did not terminate or renegotiate terms of the contract
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Checked | 44.4 | 27.3-62.6 |
| Not Checked | 55.6 | 37.4-72.8 |
2. Was unable to terminate or renegotiate because of contract terms
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Checked | 0.3 | 0.1-11.3 |
| Not Checked | 99.7 | 88.7-100.0 |
3. Terminated contract without being charged a fee
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Checked | 20.5 | 8.3-38.6 |
| Not Checked | 79.5 | 61.4-91.7 |
4. Terminated contract and paid a fee, such as a surrender charge
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Checked | 5.2 | 0.4-19.8 |
| Not Checked | 94.8 | 80.3-99.6 |
5. Renegotiated contract terms to reduce fees
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Checked | 11.7 | 4.1-24.7 |
| Not Checked | 88.3 | 75.3-95.9 |
6. Renegotiated contract terms to increase benefit(s)
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Checked | 0.0 | 0.0-6.2 |
| Not Checked | 100.0 | 93.8-100.0 |
7. Other (Please specify)
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Checked | 6.6 | 1.0-20.2 |
| Not Checked | 93.4 | 79.8-99.0 |
Please specify other outcomes of actions related to your plan's group variable annuity contract below:
Plan Fees and Services
12. For the 2010 calendar year, did the company or plan pay for any of the following services? And if so, how much was paid by the company/plan sponsor and/or out of plan assets (from plan participants' accounts)? Note: Do not include in-house costs such as salaries and expenses related to internal accountants, benefits, human resource, and other staff. (Please use whole dollar amounts.)
a. Recordkeeping and administrative services
(i.e. tracking individual account contributions and reporting).
These fees could be charged as a flat amount or a percentage of plan assets.
A. Did your company or the plan pay for recordkeeping and administrative services during the 2010 calendar year?
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Yes | 84.5 | 79.3-88.8 |
| Waived | 6.8 | 3.9-10.7 |
| Do not know | 8.8 | 5.5-13.1 |
B. Total Fees Paid By Plan Sponsor (Enter "0" if no amount is paid, enter "1" if amount paid is unknown.)
Data intentionally not reported
C. Total Fees Paid Out of Plan Assets (Enter "0" if no amount is paid, enter "1" if amount paid is unknown.)
Data intentionally not reported
b. Investment management fees, which are ongoing charges for managing the assets of the
investment fund. They are generally stated as a percentage of the amount of assets invested.
A. Did your company or plan pay for investment management fees during the 2010 calendar year?
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Yes | 49.8 | 43.1-56.4 |
| Waived | 22.6 | 16.8-28.4 |
| Do not know | 27.6 | 21.5-33.8 |
B. Total Fees Paid By Plan Sponsor (Enter "0" if no amount is paid, enter "1" if amount paid is unknown.)
Data intentionally not reported
C. Total Fees Paid Out of Plan Assets (Enter "0" if no amount is paid, enter "1" if amount paid is unknown.)
Data intentionally not reported
c. Retirement plan consultant or investment advisor, which includes fees
charged by an advisor, often a consultant, hired to help the plan sponsor
select funds for the plan and to monitor investments.
A. Did your company or plan pay for retirement plan consultant or investment advisor services during the 2010 calendar year?
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Yes | 22.2 | 16.9-27.5 |
| Waived | 19.8 | 14.5-26.0 |
| Do not know | 17.4 | 12.5-23.3 |
| Not applicable | 40.6 | 33.9-47.3 |
B. Total Fees Paid By Plan Sponsor (Enter "0" if no amount is paid, enter "1" if amount paid is unknown.)
Data intentionally not reported
C. Total Fees Paid Out of Plan Assets (Enter "0" if no amount is paid, enter "1" if amount paid is unknown.)
Data intentionally not reported
d. Other service fees, such as trustee, legal, and audit fees (Please do not include individual participant
transaction fees, such as fees for loans.)
A. Did your company or plan pay for other services during the 2010 calendar year?
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Yes | 21.0 | 16.7-25.3 |
| Waived | 21.5 | 16.3-26.7 |
| Do not know | 28.7 | 22.9-34.4 |
| Item nonresponse | 28.8 | 23.2-34.5 |
B. Total Fees Paid By Plan Sponsor (Enter "0" if no amount is paid, enter "1" if amount paid is unknown.)
Data intentionally not reported
C. Total Fees Paid Out of Plan Assets (Enter "0" if no amount is paid, enter "1" if amount paid is unknown.)
Data intentionally not reported
*Note - If an investment management fees report by your recordkeeper or other service provider is not readily available, you may have to estimate these fees by multiplying the total plan assets by the expense ratio for each of the investment options offered in the plan and include any other fees associated with the investment.
Plan Fees, Cont.
13. Some of the following fees may be paid by 401(k) plans, which could be included in the expense ratio - the fund's annual operating expenses expressed as a percentage of assets or basis points - of each fund or charged to the plan in addition to the expense ratio. Have you requested information on any of the following fees? Did the plan pay these fees during the 2010 calendar year?
a. Marketing and distribution fees, also known as 12(b)-1 fees, may be used to pay commissions to brokers and other salespersons, for expenses such as advertising and other costs of promoting the fund to investors.
Have you asked your provider for information on these fees?
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Yes | 30.0 | 24.1-35.9 |
| No | 70.0 | 64.2-75.9 |
Did the plan pay this fee in the 2010 calendar year?
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Yes | 24.1 | 18.6-29.6 |
| No | 29.4 | 23.4-35.4 |
| Do not know | 46.6 | 39.9-53.2 |
b. Sub-transfer agent (Sub-TA) fees, which are typically fees used to reimburse a plan's recordkeeper for shareholder services that the fund would have otherwise provided, such as maintaining participant-level accounts and distributing the fund's prospectus.
Have you asked your provider for information on these fees?
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Yes | 18.5 | 13.9-23.9 |
| No | 81.5 | 76.1-86.1 |
Did the plan pay this fee in the 2010 calendar year?
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Yes | 11.2 | 7.8-15.5 |
| No | 38.9 | 32.3-45.6 |
| Do not know | 49.9 | 43.2-56.6 |
c. Excess commission, also known as SEC rule 28(e) soft dollars, which are extra commissions charged by brokerage firms and paid to investment advisors and others - in the form of services other than execution of securities transactions, such as research products - for directing business to brokerage firms.
Have you asked your provider for information on these fees?
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Yes | 15.1 | 10.7-20.5 |
| No | 84.9 | 79.5-89.3 |
Did the plan pay this fee in the 2010 calendar year?
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Yes | 1.9 | 0.6-4.3 |
| No | 46.4 | 39.6-53.1 |
| Do not know | 51.7 | 45.0-58.5 |
d. Trading / transaction costs, which include commissions associated with an investment manager's buying and selling of securities within a particular investment vehicle, such as a mutual fund. These are the costs associated with portfolio turnover.
Have you asked your provider for information on these fees?
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Yes | 19.6 | 14.3-24.8 |
| No | 80.4 | 75.2-85.7 |
Did the plan pay this fee in the 2010 calendar year?
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Yes | 12.4 | 8.4-17.5 |
| No | 39.5 | 32.8-46.2 |
| Do not know | 48.1 | 41.2-54.9 |
e. Wrap fees, which are generally associated with annuities, are aggregate fees that encompass multiple components, such as investment management fees, surrender charges, mortality and expense risk charges, and administrative fees.
Have you asked your provider for information on these fees?
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Yes | 20.6 | 15.3-25.9 |
| No | 79.4 | 74.1-84.8 |
Did the plan pay this fee in the 2010 calendar year?
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Yes | 9.5 | 6.0-14.2 |
| No | 46.1 | 39.3-52.8 |
| Do not know | 44.4 | 37.7-51.2 |
Plan Fees - Providers
14. Overall, how confident are you that the companies that service your plan have fully disclosed all fees charged to your plan and plan participants?
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Completely confident | 31.7 | 25.7-37.6 |
| Very confident | 27.7 | 22.1-33.4 |
| Confident | 20.2 | 15.1-25.4 |
| Somewhat confident | 13.3 | 9.2-18.4 |
| Not at all confident | 7.1 | 4.1-11.1 |
15. Did you have to contact or work with any outside entities that provide services to the plan - such as plan consultants, investment advisors, third-party administrators, bundled providers, recordkeepers, or accountants - to complete this section of the survey on plan fees and services?
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Yes | 36.8 | 30.7-42.9 |
| No | 63.2 | 57.2-69.3 |
Comparing and Assessing Service Provider Fees and Services
16. Which would you rank as the three most important factors that led you to selecting your
current service providers, including bundled providers, recordkeepers, plan consultants,
and third-party administrators? (Enter '1' for most important, '2' for second most, and '3' for third.)
A. Customer service features, such as consistency, timeliness, and availability of representatives
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Most important | 14.1 | 9.9-19.2 |
| Second most important | 15.9 | 11.2-21.6 |
| Third most important | 25.6 | 19.6-31.5 |
| Not ranked | 44.5 | 37.7-51.3 |
B. Experience, technical capability, and knowledge of legal requirements among provider's staff
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Most important | 15.8 | 11.1-21.5 |
| Second most important | 25.2 | 19.3-31.1 |
| Third most important | 20.0 | 14.7-26.2 |
| Not ranked | 39.0 | 32.4-45.6 |
C. Reputation within the retirement plan services industry
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Most important | 12.6 | 8.4-17.8 |
| Second most important | 9.1 | 5.6-13.9 |
| Third most important | 9.2 | 5.7-13.9 |
| Not ranked | 69.1 | 62.9-75.3 |
D. Low fees and rates charged
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Most important | 8.2 | 4.9-12.6 |
| Second most important | 15.0 | 10.6-20.5 |
| Third most important | 9.8 | 6.4-14.3 |
| Not ranked | 67.0 | 60.8-73.3 |
E. Willingness to work with a plan of our size
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Most important | 6.1 | 3.1-10.7 |
| Second most important | 11.0 | 6.9-16.4 |
| Third most important | 11.3 | 7.3-16.6 |
| Not ranked | 71.6 | 65.3-77.9 |
F. Ability to handle all of our plan's administrative needs, including recordkeeping, legal compliance, and other needs
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Most important | 27.8 | 21.7-33.8 |
| Second most important | 15.1 | 10.6-20.6 |
| Third most important | 15.1 | 10.5-20.7 |
| Not ranked | 42.1 | 35.3-48.8 |
G. Information about the provider was easy to obtain/find and allowed us to make a decision quickly
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Most important | 0.4 | 0.0-1.9 |
| Second most important | 1.9 | 0.4-5.2 |
| Third most important | 1.2 | 0.3-3.2 |
| Not ranked | 96.6 | 93.2-98.6 |
H. Recommendations by friends and/or colleagues
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Most important | 12.7 | 8.3-18.4 |
| Second most important | 6.0 | 3.1-10.5 |
| Third most important | 6.4 | 3.3-11.0 |
| Not ranked | 74.9 | 68.7-81.0 |
I. Other (Please specify)
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Most important | 2.4 | 0.7-5.8 |
| Second most important | 0.7 | 0.1-2.9 |
| Third most important | 1.5 | 0.3-4.4 |
| Not ranked | 95.3 | 91.3-97.8 |
If you answered "Other" above, please enter the factor that led you to selecting your current service providers below:
17. In the last 5 years, has your company taken any of the following actions for your 401(k) plan? Note: Service providers include bundled providers, recordkeepers, plan consultants, investment advisors, and third-party administrators.
A. I or someone at my company requested quotes/bids from other service providers.
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Did | 37.7 | 31.6-43.8 |
| Did Not Do | 58.4 | 52.2-64.6 |
| Do Not Know | 4.0 | 2.1-6.9 |
B. With the help of outside consultants, we requested quotes/bids from other service providers.
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Did | 21.3 | 16.3-26.3 |
| Did Not Do | 73.6 | 68.2-78.9 |
| Do Not Know | 5.1 | 2.9-8.3 |
C. I or someone at my company negotiated fees/services with service providers.
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Did | 27.6 | 22.1-33.1 |
| Did Not Do | 65.9 | 60.0-71.7 |
| Do Not Know | 6.6 | 3.8-10.5 |
D. With the help of outside consultants, negotiated fees/services with service providers.
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Did | 14.6 | 10.8-19.2 |
| Did Not Do | 77.4 | 72.4-82.4 |
| Do Not Know | 8.0 | 4.9-12.1 |
Comparing and Assessing Fees - Benchmarks
18. Which best describes how often your company or its fiduciaries analyze and compare the fees and performance of the investment options offered to participants in your 401(k) plan?
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| At least monthly | 2.3 | 0.8-5.3 |
| Quarterly | 18.1 | 13.6-23.2 |
| Annually | 35.5 | 29.5-41.5 |
| Less than once a year | 5.2 | 2.6-9.0 |
| When the plan was set up, but not since | 16.2 | 11.7-21.7 |
| Never | 11.4 | 7.4-16.6 |
| Do not know | 11.4 | 7.6-16.2 |
19. In question 18, you indicated that your company has analyzed and compared the fees and
performance of investment options. Which would you rank as the three most important factors that your company took
into consideration when assessing specific investments included in the menu of options your company offers or
should offer participants? (Enter '1' for most important, '2' for second most, and '3' for third.)
A. Investment option adds diversity to the menu available to plan participants
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Most important | 36.3 | 29.4-43.3 |
| Second most important | 31.4 | 24.8-38.0 |
| Third most important | 23.1 | 17.0-29.2 |
| Not ranked | 9.2 | 5.5-14.3 |
B. Best historical investment returns/performance based on risk plan participants are willing to take
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Most important | 32.9 | 26.1-39.6 |
| Second most important | 27.0 | 20.6-33.3 |
| Third most important | 25.2 | 18.9-31.4 |
| Not ranked | 15.0 | 10.3-20.9 |
C. Investment option charges relatively low fees
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Most important | 14.6 | 9.9-20.4 |
| Second most important | 27.6 | 21.1-34.2 |
| Third most important | 21.6 | 16.1-27.2 |
| Not ranked | 36.2 | 29.2-43.1 |
D. Investment option was recommended by our service provider-including bundled provider, financial advisor or third party administrator, etc.
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Most important | 30.2 | 23.6-36.8 |
| Second most important | 13.2 | 8.8-18.8 |
| Third most important | 21.2 | 15.5-28.0 |
| Not ranked | 35.4 | 28.6-42.1 |
E. Other (Please specify)
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Most important | 4.0 | 1.6-8.3 |
| Second most important | 0.8 | 0.1-3.3 |
| Third most important | 0.7 | 0.0-3.2 |
| Not ranked | 94.4 | 89.9-97.4 |
If you answered "Other" above, please enter the factor considered when assessing specific investments included in the menu of options the plan offers or should offer:
20. When reviewing the fees for investment options offered to plan participants or the fees charged by your service providers - including bundled providers, recordkeepers, plan consultants, and third-party administrators - does your company or its fiduciaries analyze or compare your plan fees against benchmark(s) using any of the following methods?
A. My company uses peer funds that have similar or identical types of investments.
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Uses | 34.9 | 28.2-41.6 |
| Do Not Use | 43.2 | 36.0-50.3 |
| Do Not Know | 22.0 | 16.0-29.0 |
B. My company uses bids or quotes from outside entities, such as investment managers, plan consultants, or investment advisors.
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Uses | 26.2 | 19.9-32.5 |
| Do Not Use | 57.8 | 50.8-64.9 |
| Do Not Know | 16.0 | 10.8-22.4 |
C. My company hired an outside consultant to develop fee benchmark(s).
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Uses | 9.4 | 6.0-13.8 |
| Do Not Use | 73.8 | 67.5-80.1 |
| Do Not Know | 16.8 | 11.5-23.3 |
D. My company hired an online rating service to develop fee benchmark(s) services.
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Uses | 2.5 | 0.8-6.0 |
| Do Not Use | 83.0 | 76.5-88.3 |
| Do Not Know | 14.5 | 9.6-20.9 |
E. Other (Please specify below)
If you answered "Other" above, please enter other type(s) of benchmark(s):
21. How often does your company or its fiduciaries evaluate the menu of investment options offered to participants in your company's 401(k) plan to determine how well it meets your plan's needs and participants' needs?
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| At least quarterly | 19.2 | 14.5-24.0 |
| Annually | 42.2 | 36.0-48.4 |
| About every 2-5 years | 14.0 | 9.7-19.2 |
| After more than 5 years | 0.6 | 0.1-2.5 |
| When the plan was set up, but not since | 14.1 | 9.9-19.3 |
| Never | 2.3 | 0.7-5.4 |
| Do not know | 7.6 | 4.5-11.9 |
Comparing and Assessing Fees - Resources
22. The Form 5500 Annual Report is the primary source of information about the operations, funding, and investments
of about 800,000 retirement and welfare benefit plans. The unedited data from all of the filings for each year, including
the data in the various schedules, are available on the Department of Labor's (DOL) Web site.
Have you used information from other companies' Form 5500 Annual Reports, which are available on DOL's
Web site, to compare or assess the fees charged by your recordkeeper or investment management companies?
A. Compare or assess recordkeeper fees
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Used Form 5500 Data | 3.0 | 1.2-6.1 |
| Did Not Use Form 5500 Data | 50.1 | 43.7-56.5 |
| Did Not Know Form 5500 Data Could Be Used | 46.9 | 40.5-53.3 |
B. Compare or assess retirement plan consultant/investment advisor fees
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Used Form 5500 Data | 2.5 | 0.9-5.4 |
| Did Not Use Form 5500 Data | 50.1 | 43.7-56.6 |
| Did Not Know Form 5500 Data Could Be Used | 47.4 | 41.0-53.9 |
C. Compare or assess investment management fees
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Used Form 5500 Data | 3.0 | 1.2-6.1 |
| Did Not Use Form 5500 Data | 49.2 | 42.8-55.7 |
| Did Not Know Form 5500 Data Could Be Used | 47.8 | 41.3-54.2 |
23. The Department of Labor (DOL) also makes available a number of resources related to plan fees,
which are available on the DOL's Web site.
Have you used any of the following documents available on the DOL's Web site
when comparing or assessing the fees charged by your recordkeeper or investment management companies?
A. DOL's A Look At 401(k) Plan Fees, which includes a 401(k) Fees Checklist
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Used Resource | 5.8 | 3.2-9.8 |
| Did Not Use Resource | 43.0 | 36.7-49.3 |
| Did Not Know About The Resource | 51.2 | 44.8-57.6 |
B. DOL's Model Fee Disclosure Form for Services Provided
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Used Resource | 4.0 | 1.9-7.4 |
| Did Not Use Resource | 43.2 | 36.8-49.6 |
| Did Not Know About The Resource | 52.8 | 46.4-59.2 |
C. Other DOL resources related to plan fees (Please specify)
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Used Resource | 0.9 | 0.2-2.8 |
| Did Not Use Resource | 45.0 | 38.5-51.6 |
| Did Not Know About The Resource | 54.0 | 47.4-60.6 |
If you answered "Other" above, please enter other DOL resources used:
Plan Fee Disclosures
24. To help ensure plan sponsors obtain the information they need to assess the compensation paid for services
rendered to the plan, the Department of Labor revised the 2009 Form 5500 Schedule C in which most "large"
plans - typically those with 100 or more participants - must file each year. For example, the Department of Labor
now requires plans to identify individuals who received $5,000 or more in direct or indirect compensation
(money or anything else of value) for services rendered to the plan or their position with the plan.
Since 2009, have you completed Schedule C as part of your annual Form 5500 return?
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Yes | 13.7 | 10.3-17.8 |
| No | 60.7 | 54.7-66.7 |
| Do not know | 25.6 | 19.9-31.3 |
25. Did the fact that you had to collect and report additional information about your service providers (including bundled providers, recordkeepers, plan consultants, and third-party administrators) result in you/your company taking any of the following actions?
A. Comparing the fees we pay to those charged by other service providers
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Resulted In | 10.7 | 3.8-22.5 |
| Did Not Result In | 89.3 | 77.5-96.3 |
B. Helping to negotiate fee amounts with our current provider
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Resulted In | 16.8 | 7.6-30.4 |
| Did Not Result In | 83.2 | 69.7-92.4 |
C. No action was taken, but it afforded us more useful information about the provider's compensation
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Resulted In | 44.6 | 31.4-57.8 |
| Did Not Result In | 55.4 | 42.2-68.6 |
D. Other (Please specify below)
If you answered "Other" above, please enter other action(s) taken:
Plan Fee Disclosures - Revenue Sharing
26. Revenue sharing is a practice in which a plan's service provider - including bundled providers, recordkeepers,
plan consultants, and third-party administrators - receives compensation from an outside entity in connection with
services rendered to a plan. For example, a plan's recordkeeper and investment fund manager may have an arrangement
where the investment fund company collects additional fees from plan assets invested in a particular fund that may
then be used as a credit to offset the recordkeeper's fees.
A. Do any of the companies that service your plan have revenue sharing arrangements with other service providers?
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Yes | 17.6 | 13.4-22.6 |
| No | 34.3 | 28.3-40.3 |
| Do not know | 48.1 | 41.8-54.4 |
B. How was the arrangement disclosed? (Check all that apply) If you answered 'Yes' to A, then answer B below.
1. Revenue sharing was disclosed in the provider's written contract
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Checked | 66.0 | 53.0-77.4 |
| Not Checked | 34.0 | 22.6-47.0 |
2. The provider discussed revenue sharing with us during a meeting
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Checked | 43.6 | 31.1-56.2 |
| Not Checked | 56.4 | 43.8-68.9 |
3. The provider disclosed the revenue sharing arrangement after we asked
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Checked | 11.9 | 4.9-23.1 |
| Not Checked | 88.1 | 76.9-95.1 |
4. Other (Please specify below)
Other:
27. How, if at all, did your service providers' revenue sharing arrangement impact your decision to use that service provider? Examples of service providers include bundled providers, recordkeepers, plan consultants, and third-party administrators. (Check the one that best describes your company's decision)
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| We did not consider revenue sharing in our decision making. | 41.6 | 28.1-55.2 |
| We did not know enough about the revenue sharing arrangement to consider it in our decision. | 15.5 | 6.7-28.9 |
| We thought revenue sharing could potentially lower the costs to the company. | 36.9 | 23.6-51.8 |
| We asked the service provider not to use revenue sharing arrangements to service our plan because it would potentially increase costs to the plan. | 1.0 | 0.0-6.0 |
| We considered revenue sharing, but were unable to opt out of the arrangement. | 4.9 | 1.1-13.6 |
28. Are there types of fee information that the companies that service your plan have given you, or could give you that would help you ensure that the services provided to the plan are necessary and the fees of those services are reasonable?
Plan Fee Disclosures - Participants
29. Beginning in November 2011, the Department of Labor will require plan administrators to provide plan participants
with certain plan and investment related information. In the chart below are examples of the plan and investment
related information that is to be provided to plan participants.
In your opinion, will the types of information in the table below help plan participants understand
the fees associated with their 401(k) plan?
A. A statement, at least quarterly, of the dollar amount of fees and expenses charged against participants' or beneficiaries' accounts for plan-level services (e.g., legal, accounting, or recordkeeping), along with a description of the services to which the charge or charges relate.
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Helpful to Participants' Understanding | 67.8 | 62.1-73.6 |
| Not Helpful to Participants' Understanding | 6.1 | 3.7-9.5 |
| Not Sure if it is Helpful to Participants' Understanding | 22.6 | 17.4-27.8 |
| Item nonresponse | 3.5 | 1.6-6.6 |
B. Benchmarking data for each investment alternative, where the return is not fixed. Benchmark data are to include the name and returns of an appropriate broad-based securities market index over 1, 5, and 10 year periods.
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Helpful to Participants' Understanding | 52.1 | 45.9-58.4 |
| Not Helpful to Participants' Understanding | 9.6 | 6.3-13.8 |
| Not Sure if it is Helpful to Participants' Understanding | 34.5 | 28.5-40.4 |
| Item nonresponse | 3.8 | 1.8-6.9 |
C. Fees and expenses charged against participants' or beneficiaries' investments, such as commissions, sales loads, and account fees that are not included in the total operating expenses of an investment alternative.
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Helpful to Participants' Understanding | 70.0 | 64.3-75.7 |
| Not Helpful to Participants' Understanding | 4.9 | 2.6-8.3 |
| Not Sure if it is Helpful to Participants' Understanding | 20.7 | 15.7-25.7 |
| Item nonresponse | 4.4 | 2.2-7.7 |
D. The total annual operating expenses of each investment alternative, for a one year period, expressed as a dollar amount for a $1,000 investment.
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| Helpful to Participants' Understanding | 58.5 | 52.4-64.6 |
| Not Helpful to Participants' Understanding | 7.2 | 4.4-11.0 |
| Not Sure if it is Helpful to Participants' Understanding | 29.5 | 23.8-35.2 |
| Item nonresponse | 4.8 | 2.4-8.3 |
If you answered "Not helpful to participants' understanding" to any of the above, please explain why below:
30. Do you have any other comments you would like to share about the Department of Labor's requirements or other legal requirements related to maintaining and operating a 401(k) plan?
Additional Plan Fee Information
31. We would like to better understand the fees associated with your company's plan. Can you please either upload a
summary of all investment options and the fees associated with each option that were
available within your company's plan as of the end of calendar year 2010 or complete the form in
question 32? A report would include:
- the complete investment option name or trading symbol (ticker);
- the amount of the total plan assets allocated to each investment option;
- the mutual fund expense ratio-the fund's annual operating expenses expressed as a percentage of assets or basis points.
Example:
| Investment Option Name | Trading symbol/ticker (if readily available) | Asset Amount at end of 2010 (12/31/10) | Annual Expense Ratio/Investment Management fee |
|---|---|---|---|
| Company Domestic Equity Growth Fund - A | ABC | $123,789 | 1.0% |
| Company Bond Index Fund | XYZ | $85,000 | 25 basis points (bps) |
| Answer Choices |
Estimated Percentage |
95 Percent Confidence Interval |
|---|---|---|
| I will upload a report. | 36.3 | 30.2-42.4 |
| Instead of uploading a report, I will complete question 32. | 6.0 | 3.4-9.6 |
| I do not have a report to upload and I am unable to complete question 32. | 50.4 | 44.0-56.8 |
| No response | 7.3 | 4.4-11.3 |
Please upload your plan information here. (Please note there is a 2,000 KB file size limit)
You might receive an end of year summary document with this information from your recordkeeper or administrator;
or it might be accessible through your provider's Web site. (We stress that the information you provide will be kept
confidential and will not be released outside GAO. As part of GAO protocols, any dissemination of data compiled from
this questionnaire will be stripped of all plan or personally-identifiable information.)
Note: When submitting the plan investment data, please clearly indicate your company and 401(k) plan name on the
documents. Thank you.
Have you uploaded your report?
32. If you cannot upload your investment options data, please use the "Add" link
below to enter information about each investment option that was available
to participants during calendar year 2010.
Click the "Add" link to enter information about each investment option until you have entered information about all
of your investment options. This "Add" link will take you to a new page where you may enter and save the information about the investment option,
and then return to this page to add additional investment options or once you are done entering all investments options - complete the survey.
Survey Checklist
33. Have you completed all of the survey questions you are able to answer?
Thank you for completing the survey!