Another company is stepping forward to aid in the push to get exchange traded funds (ETFs) into 401(k) retirement plans.

Alvin Rapp, CEO of RPG Consultants in New York, tells us the firm is in talks with several ETF providers as word spreads about what RPG is trying to do. RPG is a third-party administrator providing administration and recordkeeping for company benefit plans.

"As people realize the value added, more people say they want to get in," Rapp says. He says they don’t know when the okay will be handed down, though. "It could be tomorrow, it could be three months from now."

One of the primary goals of having ETFs as components of 401(k) plans is to keep them cost-effective and transparent. The expense ratios of the plans Rapp is working on with ETF providers will be geared to the size of the plan, but that there will still be money saved.

"What we have proven over the course of time is that an ETF-based 401(k) would save participants anywhere from 0.5% to 1%-plus per year," says Rapp. "The cost of an ETF is generally much less than the average mutual fund."

The ETF industry and investors have been increasingly demanding the funds in their 401(k) plans while maintaining transparency and their cost-effectiveness. As advisors and investors become more educated about their benefits, perhaps ETFs will become a retirement plan staple.

Last November, RPG signed a deal with XShares Advisors to get their TDAX Independence ETFs onto their platform, reports Jesse Emspak for Investor’s Business Daily.

Tags: 401(k), Retirement