Retirement Plan Committee

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…

Embarking on a review of your 401(k) plan’s recordkeeping services is a proactive step that can deliver significant benefits for both your plan and its participants. Here’s how: Cost Efficiency: The market for recordkeeping services is dynamic, with new entrants often offering competitive pricing and innovative features. A periodic review could uncover opportunities to reduce costs and secure better terms, aligning more closely with your plan’s financial goals and constraints. Enhanced Services: As technology advances and industry standards evolve, new…

Introduction: The Department of Labor offers flexibility in determining and paying plan fees, placing a significant fiduciary responsibility on Retirement Plan Committees to evaluate and document all administrative expenses. As fees can greatly influence retirement outcomes, understanding the structure of these costs is crucial for ensuring transparency and assessing their reasonableness. The Impact of Recordkeeping Fees: Recordkeeping fees and other costs play a pivotal role in managing a 401(k) plan. These expenses impact the overall effectiveness of the plan and…

Managing Your 401(k) Fees Retirement plans commonly include funds that engage in revenue sharing, which is crediting a portion of the fund expense ratio paid by participants back to the plan. Using revenue sharing to pay all or a portion of plan administrative expenses is an acceptable practice. On the surface, this practice does not seem unfair, but unfortunately, using revenue sharing to pay plan expenses can fall far short of fair. Let’s take a look at why. Most 401(k)…