To reduce the cost of investing in retirement plans, Empower announced the launch of what it described as the first-ever zero-fee index fund designed specifically for retirement investors.
Named the Empower S&P 500 Index Separate Account, the new fund offers broad market exposure with no management fees, helping more retirement investors grow their retirement savings faster, according to the firm’s announcement.
By eliminating fees entirely, Empower aims to give retirement plan participants the full power of compound growth potential to help close the retirement savings gap for millions of Americans.
“We are driven to help make investing more accessible and affordable,” said Empower President and Chief Operating Officer Rich Linton. “With this zero-fee index fund, we believe we are optimizing the value that plan participants can receive for their invested dollars.”
The fund will be available to all investors saving for retirement through defined contribution (DC) plans, including 401(k), 401(a), 457(b), and defined benefit plans, as well as other qualified retirement accounts.
What’s more, the fund seeks investment results that track the total return of the common stocks that compose the Standard & Poor’s (S&P) 500 Index and is sub-advised by BlackRock.
Among the key features are zero management fees (i.e., 0.00% expense ratio); no trading or account fees; no hidden costs or fees, and full return of the investment portfolio.
“Our aim is to give investors the best chance to maximize their returns on their investments,” stated Executive Vice President and Head of Empower Investments Jonathan Kreider. “This fund puts every dollar to work for investors, helping them keep more of what they earn.”
The announcement goes on to explain that Empower recognizes the popularity of S&P 500 Index funds within the DC space, as well as the complementary nature of the offering opposite the remaining Empower Institutional Separate Account Platform. In view of that, Empower notes that it seeks to provide value to DC investors by offering this no-fee institutional separate account (ISA) as a means of highlighting the low-cost benefits of the ISA structure.
“The ISA structure might be the best-kept secret in retirement investing,” Kreider further emphasized. “The Empower Institutional Separate Account Platform leverages the institutional buying power of Empower to provide retirement plans high-quality investment strategies, managed by the nation’s premier asset managers, generally in a lower cost structure relative to mutual funds and collective investment trusts (CITs).”
