Chasing returns is big business. The financialmedia continually perpetuates the desire, and the need, to pick“the next Apple” or “the next five-star mutual fund.”

But unfortunately, chasing the next high flyer has been shown tobe a fool’s errand. In a Wall Street Journal articletitled “Investors Caught with Stars in Their Eyes,”the newspaper went back to 1999 and studied the 10-year subsequentreturns of those who bought five-star funds. What did theyfind? “Of the 248 mutual funds with five-star ratings at thestart of the period, just four still kept that rank after 10years.” I guess fund managers mean it very literally whenthey say “past performance is not indicative of futureresults!”

So just how do you create better performance in your retirementaccounts if predicting the future is not your gift? Eliminateexcessive fees.

If you were going to enter a sailing race from California toHawaii, it doesn’t matter how high-tech your boat is, or howexperienced you are as a sailor, if your boat has a hole in theside of the hull. Fees are the proverbial gaping hole in mostpeople’s retirement plans, and excessive fees will ensure that mostwill never reach the port of a financially secure retirement.

Sadly, American business owners and employees have been lulledto sleep by 401(k) plan providers. Consider this: for 30years, 401(k) plan providers didn’t have to disclose how much theywere extracting from participants’ retirement accounts! Inwhat other industry would this be allowed? It’sinsanity. A study by AARP showed that 71% of participantsthink they pay no 401(k) fees whatsoever. Nothing could befurther from the truth. Ignorance is not bliss. Ignorance isdestruction of your financial future.

Jack Bogle, legendary investor and founder of Vanguard, oftenwarns that Americans are giving up 50% or more of their future nestegg to fees. In an interview last year, he explained: “Let’sassume the stock market gives a 7% return over 50 years. Ifyou get to 7%, each $1 goes up to $30 [over the 50 years]. Ifyou get to 5% (that would be 7% less the industry’s typical 2%all-in costs), you get $10. So $10 versus $30. You put up 100% ofthe capital, you took 100% of the risk, and you got 33% of thereturn! As I say to people, if that strikes you as a good deal, byall means do it!”

Practically speaking, this means that business owners andparticipants alike are forfeiting two-thirds of their nest egg toexcessive and egregious fees.

This has quietly become an epidemic and the previous White Houseadministration, along with the Department of Labor, sounded thealarm as the societal implications of millions of Americans runningof money too soon is simply unbearable.

In the $5 trillion 401(k) marketplace, about 95% of existingplans have under $10 million in plan assets and 90% have less than100 participants, according to a study published by the InvestmentCompany Institute, the lobby for the mutual fund industry, andBrightScope in December 2016. This small to mid-size segmentis where the fees can be most damaging since larger plans usuallycan afford the luxuries of expert committees and outsideconsultants. Said another way, employees are penalizedgreatly by choosing to work for a smaller company.

The BrightScope/Investment Company Institute study found thatfor 80% of plans with between $1 million and $10 million in assets,fees can have a range of up to 1.71% annually. However, we reviewthousands of fee disclosures per year and we find the InvestmentCompany Institute’s estimate to be low, especially when you look atplans under $5 million, where the average skews higher. Between 1.5% and 2% is a much more common annual fee range forsmall plans in our experience.

So what do these percentages actually mean to the employers whotrust their 401(k) providers to help them and their employees gothe distance? What is the impact to them and theiremployees over the long term, when they will actually need to relyon these savings to live with dignity during retirement?

Let’s take a real-life example. A dentist in Coloradoapproached us with a plan sold by his local insurance broker. He asked us to benchmark his fees and comb through his plan’sopaque and lengthy fee disclosure. The plan had “all in” expensesof 1.56% annually and $1.2 million in total assets, and the dentistand his practice’s staff members were contributing $100,000 everyyear. By switching to a 401(k) plan from another providerwhich lowered total fees to just 0.65% (a near 60% reduction), andall things being equal, he and his employees will have an extra$1,148,843 to enjoy 20 years from now! This is additionalretirement savings that would have otherwise gone to fees andmiddlemen.

Despite what some might say, the 401(k) is not broken. Theproverbial gaping hole in the 401(k) system’s boat was not causedby the plans themselves, but by the major 401(k) providers thathave managed these plans as feeding troughs of fees instead ofacting as stewards of the future well-being of millions ofhardworking families.

Business owners and their trusted advisors need to wake up tothis epidemic and uncover the hidden fees in their plan. Ironically, as the plan sponsors, it’s their legalresponsibility to benchmark their plans periodically, but very fewactually do so.

The silver lining here is that there are “next-generation”solutions now available that will ultimately be what Uber was toTaxi cabs. The 401(k) industry is ripe for disruption andeveryone will be better off for it.

Tom Zgainer is CEO and founder of America's Best401k.