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Rekenthaler Report

401(k) Plans: What They Really Cost

Less than most people think.

Showing Us the Money
Ian Ayres has created a ruckus by warning companies that run high-cost 401(k) plans that he will publish their names unless they change their ways. I discussed the Yale professor's efforts on Monday, The Wall Street Journal filed an article two evenings later, and Mitch Tuchman covered the subject for Forbes on Friday. It's quite the story: The professor descends from the ivory tower to make plan sponsors an offer they can't refuse. Talk about a nontraditional approach!

More quietly, though, Ayres and co-author Quinn Curtis (associate professor, Virginia Law) have issued a traditional academic paper on the subject. Entitled Measuring Fiduciary and Investor Losses in 401(k) Plans, the paper examines the costs of 12,475 plans, offered by a variety of 401(k) providers, and features a variety of company sizes. It's an excellent resource for seeing how 401(k) plans currently stand.