LOWER FEES: Schwab Retirement Plan Services says that employees who enrolled in an all-index fund 401(k) plan launched by the company about a year ago saw the expenses on their funds drop nearly 80 percent.
THE NUMBERS: Fund expenses for investors in the plan fell 77 percent to $14.78 per $10,000 invested. Prior to transitioning to an all-index fund approach, the weighted-average operating expense ratio on these investors’ 401(k) plans was $65.11 per $10,000 invested.
HOW IT WORKS: Index funds seek to match the market by tracking an index. Their fees are lower than actively managed funds.
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