Small Business Owners Need More Knowledge of Retirement Plan Fees
Only 49% said they had read their fee disclosure in the prior year and had understood it; 44% said they had not read it; and 7% said they had read the disclosure but did not understand it.
Many small business owners and managers expressed limited knowledge about how much they or their employees pay in fees to their retirement plans, according to a survey conducted by The Pew Charitable Trusts.
Only 19% of the small to mid-size business leaders said they are “very familiar” with their retirement plan fees, while 34% said they are “not at all familiar” with those fees. Forty-seven percent indicated they are “somewhat familiar” with their retirement plan fees.
Only 49% said they had read their fee disclosure in the prior year and had understood it; 44% said they had not read it; and 7% said they had read the disclosure but did not understand it. But decision-makers were divided over the benefit of more information. About half said additional information would be “somewhat” (35%) or “very” useful (14%), while a nearly equal share said this would be “not at all” (26%) or “not too” useful (24%).
Analysis of survey findings shows that those who said that they had read but did not understand plan disclosures were more than three times as likely as other business leaders to say that additional information would be “very useful.” Also, an examination of which employers read disclosures—regardless of their understanding—showed that those with fewer employees were less likely to have done so.