PLANSPONSOR - November/December 2017 - 15

Familiarity With Plan Fees Lacking
THE Pew Charitable Trusts' first report
on retirement plan investment fees says
it found that nearly seven in 10 survey
respondents in employer-sponsored
retirement plans said they were at least
somewhat familiar with their plan's fees,
while 31% were not at all familiar with
them.
The Issue Brief, " Many Workers Have
Limited Understanding of Retirement
Plan Fees, " says that roughly two-thirds
had read no investment fee disclosure
in the previous year. Even among those
who said they were very familiar with
their fees, 33% had likewise read no fee
disclosures. John Scott, director, Retirement
Savings Project at Pew, says this
was the most surprising finding of the
research. " It raises the question of what
the word 'familiar' means to respondents.
I suppose they can be familiar without
reading disclosures, but we believe people
are overstating their knowledge, " he says.
Of the one-third who had read a fee
disclosure, nearly seven in 10 said they
found the information understandable,
but only 25% of all respondents said they
had read and understood a disclosure
about retirement account fees. Roughly
four in five participants said it would be at
least somewhat useful to have additional
information about investment fees.
Asked what plan sponsors can do to
help participants better understand plan
fees, Scott says, " I hesitate to give advice
based on our research, but plan sponsors
are required by law to provide disclosures,
and they can use this opportunity
to discuss fees with participants and let
participants ask questions. "
Pew's research found Hispanics,
women, younger workers, respondents
with lower levels of education, and lowincome
workers were among the least
likely to be familiar with the fees in their
plans.
Scott says the reason women are less
familiar with fees can be explored further.
He speculates that, because women have
less opportunity to participate in plans,
they may be less familiar with investing,
but he also speculates that men might be
overstating their knowledge.
Pew's survey covered only employees
at small and midsize companies,
which are not always given the full range
of services a large plan would get from
providers. Small and midsize companies
also may lack a benefits or human
resources (HR) staff of the size found at
large companies, who could answer their
questions. " So, it's possible we could see
more familiarity with plan fees at larger
companies, but this is a difficult concept
for employees at any size employer, " he
concludes. -Rebecca Moore
Many New ESG ETFs Hit the Market
Top 10 Managers of ESG Exchange-Traded Funds
Manager
WITH environmental, social and governance
(ESG) investing generating considerable
conversation around the financial
industry, it was inevitable that exchangetraded
funds (ETFs) would take part in
the trend. Of the 57 ESG ETFs currently
on the market, a substantial majority,
35, have launched since 2016-14 of
those among the offerings of the top 10
managers (see chart at right). The handful
of products introduced before then often
had narrowly tailored or niche strategies.
It is too early to gauge what the
demand will be for these products, not
least of all because only a few have appreciable
track records. If investors do like
ESG ETFs, however, the groundwork has
been laid for these funds to gain market
share. -Anthony DiSanzo
Total Assets
in ESG ETFs*
BlackRock
Invesco PowerShares
Guggenheim Investments
State Street
First Trust
Global X Management
Van Eck
Nationwide Funds
Inspire
Nuveen
*As of September 30, 2017
$2,371mm
$1,092mm
$1,008mm
$720mm
$466mm
$148mm
$111mm
$107mm
$91mm
$80mm
Number of
ESG ETFs
10
4
2
5
4
2
3
1
3
8
Year of First
ESG Launch
2005
2005
2007
2014
2007
2016
2006
2017
2017
2016
Source: Strategic Insight
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