This is the first in a series of posts about the problem of excess fees charged to defined contribution retirement plans, a subject I’ve been researching with Quinn Curtis. Our findings about the pervasiveness of excess fees spurred me to reassess my own retirement investments. I was embarrassed to find that, among other things, my old Stanford University 401k was invested in “CREF Stock Account,” which uses a combination of “active management, enhanced indexing and pure indexing” and charges 49 basis points (.49%) as its “Estimated Expense Charge.” Now 49 basis points is not an outrageously high fee, but it is substantially higher than the fees charged by a low-cost index.
So I called TIAA-CREF and asked for help in rolling over my Stanford account to a Fidelity IRA. The TIAA CREF rollover specialist asked why I wanted a rollover, we had the follow brief exchange: