Reducing Costs of 401(k) Plans with ETFs and Commingled Trusts

Increasingly, employers who provide their employees with a retirement plan are relying on 401(k) and similar defined contribution plans instead of defined benefit plans. As a result, participants are paying more of the cost of managing their pension plans, which can take a substantial toll on their retirement savings. Over a 30 year career, for example, an annual fee of 0.7% of assets reduces the purchasing power of a participant's balance at the time of retirement by more than one-eighth.