Reviewing how plan providers and advisors are paid within retirement plans may be one of the most difficult tasks for a plan fiduciary. Most plans do not clearly disclose how fees are collected, making it very difficult to know if your plan is appropriately priced. Your plan and advisor fees may be paid in any of the following ways:

  • Revenue sharing taken from the plan investment fees.
  • An asset charge that is charged to some or all plan assets.
  • A flat dollar amount that is charged to plan participants or the plan sponsor.

Most plans utilize a revenue sharing structure where higher cost mutual fund share classes are used so that revenue sharing taken from those funds will cover the plan and advisor fees. In most cases, this process can result in more fiduciary risk for plan sponsors than other pricing options available to the plan.

We work with our plan sponsors to help them understand the fiduciary risks of each pricing approach and limit or remove those risks whenever possible. Most providers now offer a plan sponsor the ability to pass revenue sharing back to plan participants instead of using these funds to pay for plan-related fees. This revenue crediting approach limits fiduciary risk because it allows the plan to use the lowest cost share classes available for each investment in the plan, and all plan-related fees are then charged evenly to plan participants. The result is normally a lower cost plan that more clearly discloses plan and investment fees to plan sponsors and participants.

Our Retirement Plan Advisors

 

Tony Black, RPA, AIF
Tony Black, RPA, AIF

CEFEX-Certified Retirement Plan Advisor


Matt Voecks, RPA, AIF
Matt Voecks, RPA, AIF

CEFEX-Certified Retirement Plan Advisor





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