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As stewards of employees’ retirement savings, 401(k) plan committees bear a significant responsibility. One of the most crucial aspects of this role is a comprehensive understanding of the fees associated with the plan. This includes not only the costs related to investments and revenue sharing but also the payments received by the recordkeeper and any advisors involved. Here’s why a thorough grasp of these fees is essential for effective plan management. The Impact of Fees on Retirement Savings Even seemingly…

Many 401(k) plans engage advisors to provide investment guidance and fiduciary support. It is crucial for plan committees to fully understand the structure of these fees and the role of the advisor. Advisor fees can be charged as a flat fee, an hourly rate, or a percentage of assets. Beyond the fee structure, committees must determine whether their advisor is acting as a fiduciary when giving advice. Understanding the advisor’s fiduciary status is critical. A fiduciary advisor is legally obligated…