Topic:

Mutual Fund Revenue Sharing in 401(k) Plans

Time&Date: 

10:00 am – 11:30 am, May 24, 2024 (Friday)

Venue

Online Zoom Meeting

Speaker:

Prof. Veronika Pool (Vanderbilt University)

Recordkeepers in DC pension plans are often paid indirectly in the form of revenue
sharing from third-party funds on the menu. We show that these arrangements affect
the investment menu of 401(k) plans. Revenue-sharing funds are more likely to be
added to the menu and are less likely to be deleted. Overall, revenue-sharing plans are
more expensive as higher expense ratios are not offset by lower direct fees or by superior
performance. Rebates increase with the market power of the recordkeeper suggesting
that third-party funds may share revenues to gain access to retirement assets.

Biography:

Veronika Krepely Pool is a Professor of Finance at the Owen Graduate School of Management at Vanderbilt University. She is also an academic director of the Financial Management Association. Veronika joined Owen in 2019 from Indiana University’s Kelley School of Business, where she was an Associate Professor and the Gregg T. and Judith A. Summerville Chair of Finance. She had been on the Kelley School’s faculty since completing her Ph.D. in finance at Vanderbilt University in 2006. Her main research interest is the economics of conflict of interest in delegated portfolios, such as hedge funds, mutual funds, and 401(k) plans. She teaches in the Vanderbilt MS Finance program and the Hoogland Undergraduate Business Program.