Retirement Plan Fees

When was the last time the fees that you are charged for your retirement plan were looked at? All plan sponsors and retirement plan committees should go to market and evaluate fees about every three years. Make sure your fees are justified and defensible. This does not mean that you must have the cheapest or least expensive provider out there. It means that you should be able to justify the fees you are paying for the plan features that you use. 

You should be reviewing the fee disclosures that are required to be sure they are clear and match how much you and the employees are paying for services. There are also different fee disclosures that are required. The 408(b)(2) fee disclosure is what is required to be provided to a plan sponsor for the fees they will pay. That might include fees from your TPA that may or may not be paid through the plan but should be clearly outlined as to what the plan sponsor will pay.

Participants receive a 404(a)(5) fee disclosure. Most recordkeepers provide this notice and incorporate any fees that might be charged to a participant by the TPA (such as distribution or loan fees) and the fees that the investment advisor may be charging. Making sure this disclosure is accurate and distributed annually as required, assures that plan sponsors and retirement plan committees are satisfying an important part of their fiduciary responsibility.