Bonnie Treichel Interviewed by Dow Jones’ Marketwatch

August 16, 2023
401k market watch
Endeavor Retirement Founder and Chief Solutions Officer, Bonnie Treichel, was interviewed by Dow Jones’ MarketWatch and asked to weigh in on the recent trend of the increasing number of employers keeping their workers’ 401(k) assets in-plan after retirement.

In the past, Bonnie said, “The trend was always to get the money out of the plan.” However, the trend appears to be changing. Now, according to Bonnie, “More plan sponsors are wanting to keep the money in the plan.” One of the factors believed to be driving this new trend is employers’ desire to negotiate lower administrative costs for their plans.

Bonnie notes that larger plan sizes enable plan sponsors to negotiate better record-keeping fees, which can benefit both participants and the sponsor. “The more plan assets that you keep…the better you can do when you go to negotiate (fees), depending on average account balance,” she said. “Plan size matters because when you have a larger plan size, then you can get better record-keeping costs. So, it matters for negotiation.” But Bonnie does not think negotiating lower fees is the only reason for this shift in employer behavior.

According to Bonnie, plan sponsors also choose to retain assets out of a sense of responsibility and a desire to protect participants, paternalism if you will. By offering competitive pricing and services within the plan, they aim to support participants’ financial security. “It’s this idea of being paternalistic and protecting your participants,” she said. “By keeping them in plan, they (plan participants) can get better pricing in plan than out of plan.”

To learn more, read the entire article, available here.

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