July 25, 2013, #239

Contact: Stephen Blakely, EBRI, (202) 775-6341, [email protected]

Many Haven’t Noticed 401(k) Fee Disclosures, Most Haven’t Made Changes While workers are now getting more information about their 401(k) fees, those disclosures don’t seem to be making much of an impact. According to the 2013 Retirement Confidence Survey, about half (53 percent) of defined contribution plan participants report having noticed this information, and only 14 percent of those who noticed this information (7 percent of all plan participants) say they have made changes to their investments as a result of the expanded information about fees. Employers that sponsor a retirement savings plan are now required to provide information about the expenses connected with the various investment options offered within the plan and the amounts deducted from participant accounts to cover the cost of administering the plan. Of those few participants who made changes, the most common actions were to move money out of more expensive investments or to withdraw money from the plan. However, small proportions increased the share of money going to less expensive investments, started contributing less money to the plan, or started contributing more money to the plan.

14% of Those Who Noticed Fees and 7% of Those  Offered a Plan in General Made Changes Due to Fees If noticed fee disclosure: Did you make any changes to your investments as a result of the  information about fees? (2013 Workers noticing plan fee disclosures n=268)  If made changes:  What changes did you make as a direct result of the information about fees? (2013  Workers n=39)

(7% of those offered a plan)

Moved money out of more expensive investments

32%

Withdrew money from the plan

Yes 14%

If yes

23%

Increased share going to less expensive investments

8%

Started contributing less money to the plan

7%

Started contributing more money to the plan

6%

No 86%

Other

14%

Don't know / Refused

14%

Source:  Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc., 2013 Retirement Confidence Survey. 42

Additional findings from the 2013 Retirement Confidence Survey are available online at www.ebri.org/surveys/rcs/2013/ The Employee Benefit Research Institute is a private, nonpartisan, nonprofit research institute based in Washington, DC, that focuses on health, savings, retirement, and economic security issues. EBRI does not lobby and does not take policy positions. The work of EBRI is made possible by funding from its members and sponsors, which includes a broad range of public, private, for-profit and nonprofit organizations. For more information go to www.ebri.org or www.asec.org EBRI’s on Twitter! @EBRI or http://twitter.com/EBRI

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