Half of defined contribution participants didn't know how much they paid in annual fees after receiving information on government fee-disclosure regulations — the same percentage that lacked fee knowledge before the regulations took effect, research organization LIMRA reported Monday.
“There was much speculation on how consumers would respond to the disclosure notices, yet our consumer surveys and discussions with plan service providers indicate that there has been limited reaction to learning about their fees and expenses,” Alison Salka, corporate vice president and director of LIMRA Retirement Research, said in a news release.
A LIMRA survey of 741 DC plan participants in January found that half of the respondents said they didn't know how much they paid in fees, Catherine Theroux, a LIMRA spokeswoman said in an interview. That's even with a survey of 974 DC participants in May 2012, before fee-disclosure rules took effect in August.
In the January survey, 22% said they didn't pay fees and expenses while 28% said they know how much they paid. That compares with 38% and 12%, respectively, in May 2012.
“The disclosure notices — or the discussion of them — did seem to improve the knowledge of those who believed they didn't pay any fees or expenses” in the current survey, Ms. Salka said in the news release.
The survey also found that many participants overestimated the amount of fees and expenses they pay in their DC plans, Ms. Theroux said. Among those who said they knew what they paid, 42% said they believed they paid 10% or more; 30% believed they paid between 2% and 9%; and 28% believed they paid less than 2%, Ms. Theroux said.
