For its report, Judy Diamond Associates studied every 401(k) plan in the U.S., excluding those with fewer than $3,000 in assets, in the 2014 plan year using Form 5500, a reporting requirement from the U.S. Department of Labor and the Internal Revenue Service.
“Reports like this are great because they give a birds-eye view of the retirement plan space,” says Parks. “One of the things that we could do better, a small tweak that the DOL or the IRS could implement, would be fee disclosure at the sponsor and the participant level on the form. If fees were disclosed on Form 5500, then the DOL would not have to worry about enforcement on egregious fees and overcharging, the market would self-regulate. My firm would look at every company that pays fees above a certain level and have a conversation with them about why they’re paying too much for their plans.”
Judy Diamond Associates is a subsidiary of ALM, a New York-based industry information and media firm.