Defined contribution executives cut median plan costs to a record low for the 15-month period ended March 31, according to investment consultant NEPC LLC, which has been tracking DC plan costs for seven years.
The reason: long-anticipated fee disclosure regulations that had been published in February but were effective July 1.
“Record keepers knew there would be more transparency, so they acted proactively to reduce fees,” said Ross Bremen, a partner with Cambridge, Mass.-based NEPC.
In its latest survey, NEPC found the median total plan fee was 55 basis points, three basis points lower than the survey for the year ended Dec. 31, 2010, Mr. Bremen said. Total plan costs include investment management, trust and custody, record keeping and communications.
The latest survey covered 15 months, compared to previous annual surveys in which NEPC counted calendar-year results. Mr. Bremen said NEPC chose the 15-month period to incorporate any effects of the Labor Department's publishing of regulations governing fee disclosure to plan sponsors by providers.