The 30 largest record keepers for 401(k) plans are spending up to $30 million total to change their systems to collect redemption fees for participants' mutual fund trades, consultants estimate.
Executives at the firms, however, refuse to say how much they are spending.
The use of redemption fees became an issue during the mutual fund trading scandal when it was discovered that some 401(k) plan participants were trading rapidly in and out of certain mutual funds to make quick profits.
Financial services professionals are waiting for the Securities and Exchange Commission to decide how much the redemption fee should be and when it should be used. Some industry watchers think the SEC may water down the rule to make it voluntary. A decision could come by the end of the year.
