2012 Hot Topics in Retirement - Aon

Likely Action With Respect to Plan Expenses in 2012
Completed
Recently/
Not Needed Actions Related to Expenses
39%
36%
32%
22%
8%
7%
(n ranges from 355 to 361)
32 Aon Hewitt
Hire a third party to benchmark or
evaluate
Lower costs by changing some or
all funds from mutual funds to
institutional funds
Review the plan’s total cost
Restructure to allow administrative
fees to be assessed to participants in a
more equitable manner
Have participants share more
plan expenses
Supplement required fee disclosure
with additional communication details
Plan expenses are expected to be a continued and more significant focus of
attention in 2012. Nearly all employers (85%) indicated that they are very or
somewhat likely to review the plan’s total cost (including fund fees, recordkeeping
fees, trustee fees, etc.). In addition, sponsors are progressively moving
toward lower-cost fund alternatives with around one in four (24%) indicating
that they are likely to lower costs by changing some or all funds
from mutual funds to institutional funds.
Plan sponsors are also seeking outside help in evaluating their fee structures.
Nearly 40% of employers state that they have already hired a third party to
evaluate and benchmark costs. Thirty-five percent of the remaining employers
are likely to hire an outside company in 2012.
Likely to Do in 2012
(Among Those Plans That Have Not Recently Completed)
Very
Likely
19%
7%
64%
6%
4%
23%
Somewhat
Likely
16%
17%
21%
12%
6%
36%
Somewhat
Unlikely
14%
29%
9%
26%
22%
21%
Very
Unlikely
41%
47%
7%
56%
69%
20%