But 80 percent of participants aren't getting any advice about how to best use the plans, he said. But as the labor secretary emphasized, a small percentage becomes a big deal over time. And you can bet investors would howl about fees if the market turns downward, and fees make the difference, say, between a fund that's a winner or loser. Fees of 1 percent might mean your 30 percent return on a growth fund drops to 29 percent, a 3 percent decline. But a one-point difference on a bond fund earning 7 percent is a 14 percent decline in your return.
Mutual funds have different costs of doing business, depending upon the type of fund.
Their management fees, the ongoing expenses of managing the assets in the fund, reflect the differences. A bond fund wouldn't have brokerage commission expenses and should be lower in fees than, say, an aggressive growth stock fund that buys and sells many stocks. International funds cost more to manage because operating in foreign markets is generally costlier. To find out the expenses of the funds in your plan, which are expressed as a percentage of total assets, ask your company human resources department or call your plan administrator. The information also is included in the prospectus for each fund.