Academic Report Attributes Reduced Retirement Plan Fees to Litigation Spearheaded by Schlichter Bogard & Denton
In May, the Center for Retirement Research at Boston College issued a report titled 401(k) Lawsuits: What Are The Causes and Consequences? The report examines the rise of retirement plan litigation and explores its origins and the impact it has had on the retirement plan fees paid by millions of Americans.
The report concludes that retirement plan litigation, which was spearheaded by Schlichter Bogard & Denton in 2006, has caused retirement plan fees to come down dramatically over the past several years. The report further attributes increased fee transparency, greater use of passive investment options, and a decline in the use of risky specialty funds to this litigation.
As the report notes, these conclusions are supported by industry data. Citing an annual survey of defined contribution plans, the report states that between 2006 and 2016 “the average asset-weighted expense ratio for recordkeeping services declined from 0.57 percent to 0.46 percent.” The report goes on to conclude that “it appears fees have declined across the board, so plan participants are receiving a higher proportion of the total returns on their investments.”