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COLLECTED WISDOM™ on 401k Plan Fees and Expenses

The issue of fees and expenses related to the operation of a 401k plan continues to draw great attention. We have pulled together a number of items that we think will give you a good feel for the issues you need to consider.

This archive contains not only the most current material on the topic, but also older items that are still relevant, provide background, perspective or are germane to the topic.

If you find a broken link or an items that you feel is outdate, irrelevant or no longer appropriate, please let us know.

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The Economics of Providing 401k Plans: Services, Fees, and Expenses, 2020

The study found that 401k plan participants investing in mutual funds tend to hold lower-cost funds, the expense ratios that 401k plan participants incur for investing in mutual funds have declined substantially since 2000, and the downward trend in the expense ratios that 401k plan participants incur for investing in hybrid and bond mutual funds continued in 2020.

Source: Ici.org, July 2021

All in: Understanding the Total Cost of Your Retirement Plan

As the retirement plan industry continues to evolve, with new products and solutions announced daily, plan sponsors have to remain diligent that they fulfill their fiduciary obligation to their participants. PLANSPONSOR recently spoke to James about the need for transparency in the retirement plan industry and what plan sponsors should evaluate when examining costs.

Source: Plansponsor.com, July 2021

Best Practices to Reduce Excessive Fee Risk

The role of retirement plan governance has become increasingly important as employers face increased scrutiny of how they operate their 401k plans in the current legal and regulatory environment. CFOs and human resource managers administering 401k plans and serving on 401k plan committees have increasingly been held responsible for fiduciary breaches. Plan fiduciaries should conduct due diligence to reprice services and replace underperforming funds given asset-based fees and significant growth in plan size, due to rising markets and recurring contributions.

Source: Cpajournal.com, July 2021

The Economics of Providing 401k Plans: Services, Fees, and Expenses, 2020

Key findings: 401k plan participants investing in mutual funds tend to hold lower-cost funds. The expense ratios that 401k plan participants incur for investing in mutual funds have declined substantially since 2000. The downward trend in the expense ratios that 401k plan participants incur for investing in hybrid and bond mutual funds continued in 2020. This is a 32-page report.

Source: Ici.org, June 2021

Pitfalls in Evaluating Retirement Plan Fees

Benchmarking investment fees is an important function. It's more than that, it's critical to fulfilling your fiduciary duty. But "essential" does not translate to "easy," and there are some common pitfalls in performing that function. This article identifies common problems with benchmarking fees and mistakes that can be made, and how to avoid them.

Source: Asppa.org, June 2021

Understanding and Evaluating Retirement Plan Fees: Benchmarking Investment Fees

Benchmarking investment fees is essential to fulfilling a retirement plan sponsor's fiduciary obligation. However, it can be a complicated task. This article shares the importance of accurately benchmarking investment fees and how to overcome some common plan sponsor pitfalls.

Source: Captrust.com, May 2021

Retirement Plan Fees Worsen Enterprise Risk

A new era of employee activism is underway in which plaintiff lawyers find fertile ground for litigation opportunities, catching many employers unprepared. The focal point of the growing number of such lawsuits is the compensation that employers arrange for payment to the vendors of services to the ERISA plans. Underestimating the economic and reputational risks related to deficiencies in the prudent management of ERISA plans threatens an entire enterprise.

Source: Rolandcriss.com, May 2021

Two Approaches to Benchmarking Plan Fees

Benchmarking retirement plan fees has become more complex in recent years, as it has moved beyond just scrutinizing recordkeeping and administrative fees. There are two ways sponsors can benchmark their fees. There is the traditional approach of doing an external benchmark by issuing an RFI or RFP. The other approach is to use information from a database of plan sponsors to compare fees paid.

Source: Plansponsor.com, May 2021

401k Fee Study: 75% of Small Business Plans Pay Hidden Fees

Employers have a fiduciary responsibility to ensure the fees paid by their 401k plan are "reasonable" so excessive fees do not reduce the investment returns of plan participants needlessly. To do that job, employers should benchmark their 401k fees periodically by comparing them to industry averages and/or the fees charged by competing 401k providers. Sounds straightforward, but this information is hard to find and often harder to compare on an apples-to-apples basis.

Source: Employeefiduciary.com, April 2021

Understanding and Evaluating Retirement Plan Fees: Part One

With retirement plan fees serving as the centerpiece of ERISA fiduciary breach lawsuits, understanding fee dynamics is critical for plan sponsors and fiduciaries. This series explores the different types of retirement plan fees by taking an in-depth look at investment costs, provider fees, and fee allocation methodologies.

Source: Captrust.com, April 2021

The Key to Avoiding Retirement Plan Excessive Fee Litigation

The recent increase in litigation over retirement plans and, specifically, the fees those plans are being charged for administration and management, has many companies concerned about what they need to do to protect the plans they manage. Two recent federal district court rulings illustrate the necessity for plan sponsors to have a prudent decision-making process in place to successfully defend against excessive fee litigation.

Source: Hallbenefitslaw.com, April 2021

$40 Million Excessive Fee Settlement Okayed

One of the largest 401k excessive suit settlements has been approved. The settlement arose in a case involving Reliance Trust and its role regarding the Insperity 401k Plan, in which the plaintiffs were enrolled. The plaintiffs are four participants in this plan for Insperity clients. However, the settlement did not actually involve Insperity but was an agreement between Reliance Trust and the plaintiffs.

Source: Napa-net.org, March 2021

Over Half of Americans Surveyed Falsely Believe They Pay Low or No Fees to Manage their Retirement Accounts

Nearly three-quarters of Americans surveyed do not know how much they are required to pay in fees to manage their retirement accounts, according to a recent survey commissioned by investment management firm Rebalance. Over half of Americans surveyed (57%) falsely believe that they pay either no fees, or very low fees, to maintain their retirement investment accounts. Also, nearly one-quarter don't even know how much they pay in fees.

Source: Prnewswire.com, March 2021

401k Plan Fees Continued to Decline in 2020

The average total plan cost for a small retirement plan declined to 1.20% from 1.23% over the past year, according to the latest 401k Averages Book. The average total plan cost for a large retirement plan also declined, to 0.90% from 0.91%, Joseph Valletta, the author of the book, said in a release. Valletta defines small plans as those with fewer than 100 participants and up to $5 million in assets and large plans as those with more than 1,000 participants and more than $50 million in assets.

Source: Investmentnews.com (registration may be required), March 2021

The Art and Science of Fee Benchmarking

Fee benchmarking can be a great tool for plan sponsors to ensure that their plan fees are fair and reasonable and also help to fulfill a fiduciary responsibility. Since each fee benchmarking platform has a unique process for aggregating and reporting data, plan sponsors should consider how various data sources, pools of data or report customizations may impact the accuracy and reliability of the report.

Source: Rpgconsultants.com, February 2021

Employers Beware! Retirement Plan Disclosures Are Required Under 408(b)(2)

To fulfill their fiduciary obligations, plan sponsors need to ensure that service providers subject to 408(b)(2) rules satisfy their disclosure requirements under ERISA. If a service provider fails to meet their reporting requirements under 408(b)(2), the plan sponsor is required to act by sending the service provider a written request for compliance.

Source: Hallbenefitslaw.com, January 2021

Guide to Retirement Plan Fees

As a plan sponsor, you need to identify the fees incurred by your retirement plan and demonstrate a prudent process for monitoring these fees. Through this three-part article, you'll gain an understanding of the major cost components within your retirement plan, the options you have for paying those costs, and best practice strategies for allocating costs to plan participants.

Source: Francisinvco.com, October 2020

401k Fee Lawsuits: What Can a Plan Sponsor Do?

Most weeks, a plan sponsor is sued for breach of fiduciary duty in connection with the investment choices offered under its 401k or 403b plans. A few of these cases get dismissed early in the proceedings. A few go to trial, but most cases settle. Unless dismissed, these claims, whether tried or settled, often involve million-dollar recoveries. What can a plan sponsor do to establish the best record possible if the sponsor and its fiduciaries decide that they want to defend themselves?

Source: Foley.com, October 2020

Consider Who Is Paying When Benchmarking Retirement Plan Fees

Are plan sponsors' responsibilities for making sure retirement plan fees are reasonable different when the plan sponsor pays versus when plan participants pay? There is less risk when a plan sponsor pays retirement plan fees, but that doesn't necessarily mean the benchmarking should be different than if participants pay.

Source: Plansponsor.com, October 2020

Don't be Haunted by Plan Fees

Don't let plan fees scare you. Exorcise your fear by understanding the services performed by your service providers, how your providers are paid, and what their fees are. Then look at the fees charged by other providers to plans of a similar size to yours. Keep calm throughout the process knowing that DOL doesn't expect plan sponsors to have hired the cheapest providers.

Source: Alliant401k.com, October 2020

Webinar Recording: Recordkeeping Vendor Searches: More than Just Fees

Recordkeepers are a critical partner in a successful retirement plan and monitoring their services and fees is one of the most important duties of a fiduciary. Periodic benchmarking can help keep a plan's fees in line with the marketplace but is not a replacement for a full vendor search process, especially in light of the recent findings in the Banner Health case. This webinar covers the benefits of running a vendor search, the timeline for running a search, and best practices.

Source: Multnomahgroup.com, September 2020

The Economics of Providing 401k Plans: Services, Fees, and Expenses, 2019

At year-end 2019, 401k plan assets totaled $6.4 trillion, with 37 percent invested in equity mutual funds. In 2019, the average expense ratio for equity mutual funds offered in the United States was 1.24 percent. 401k plan participants who invested in equity mutual funds, however, paid about one-third of that amount -- 0.39 percent -- on average. The expense ratios that 401k plan participants incur for investing in mutual funds have declined substantially since 2000. This is a 32-page report.

Source: Ici.org, July 2020

Retirement Plan Excessive Fee Litigation Heats Up This Summer

Until recently, it appeared that plaintiffs' firms had taken a hiatus from excessive fee litigation targeted at large companies. Now there has been an uptick in fiduciary litigation involving 401k and 403b plans of private employers. Last month, at least three new excessive fee cases were filed in Wisconsin and at least seven additional excessive fee cases were filed in other jurisdictions.

Source: Quarles.com, July 2020

A Framework for Key Recordkeeping Fee Decisions

Several key recordkeeping fee decisions are important for prudent plan fiduciaries to analyze carefully. More often than in the past, when plan sponsors benchmark their plan fees, they often use the opportunity to evaluate the way fees are allocated to participants and to make changes to the way fees are paid. Three key recordkeeping fee decisions that go directly to the heart of the question of how fees should be allocated across participants are discussed in this article. First is the decision as to the type of recordkeeping fee structure. Second is the decision around using a lowest-cost share class strategy for the investment menu versus a revenue-sharing model. Last is the decision of how to apply revenue sharing when there is an active decision to use that model or when it is unavoidable.

Source: Porteval.com, June 2020

The War on Retirement Plan Fees: Is Anyone Safe?

Almost every employer that sponsors a retirement plan should be concerned about potential liability for a type of exposure known as excessive fee claims. Historically filed against only the largest organizations, an increasing number of smaller retirement plans have faced excessive fee litigation over the past couple of years. With this surge in litigation, it's important that all fiduciaries, regardless of plan size, understand the history and recent trends relating to excessive fee claims, the plan features that may make it a target of litigation, and steps fiduciaries can take that may reduce exposure to excessive fee claims.

Source: Chubb.com, May 2020

What's Driving the Fee Discussion Within the DC Market

Fee compression is also being driven by forces outside the market, specifically the rash of fee litigation and settlements that have forced plan sponsors and fiduciaries to consider lower-cost investment options. Complicating the question of asset management fees is the increasing pressure on recordkeepers to drive down administrative costs to plans, or potentially drive more suits.

Source: Schroders.com, May 2020

Pandemic Highlights Reasons for Reviewing Plan Fees

The events of the past few months have had a dramatic impact on nearly every business. Now, more than ever is a time to review expenses and cut back where possible. One possible area to explore cost savings is in your 401k or other related retirement savings plan. Plan sponsors might start here for a variety of reasons. Here are some insights.

Source: Plansponsor.com, May 2020

What Is the Best Way for Plan Sponsors to Pay Retirement Plan Fees?

Companies are becoming more open and willing to pay retirement plan servicing fees. This article focuses on Non-Settlor fees which typically include the following service providers: Third-Party administration services, investment advisory services, recordkeeping platform services, and employee benefit audit services. There are some compelling benefits for a company to pay these plan fees.

Source: Bpp401k.com, May 2020

A "Rosetta Stone" for Finding 401k Provider Fees

401k provider services and investments can vary dramatically in terms of breadth, depth, and price. Benchmarking 401k fees on an all-in basis helps normalize these differences, putting the onus on a 401k provider to justify higher fees. This article provides a 3-step process you can use to compare fees, including where to find the administration and investment fees for ten leading 401k providers. In short, a "Rosetta Stone" for finding 401k fees.

Source: Employeefiduciary.com, April 2020

401k Plan Participants Say Fiduciaries Ignored Excessive Fees

In a lawsuit targeting the Pharmaceutical Product Development Retirement Savings Plan, the plaintiffs allege that fiduciaries of the plan violated their duties under ERISA. They say the plan fiduciaries failed to objectively and adequately review the plan's investment portfolio to ensure each investment option was prudent in terms of cost and maintained certain funds in the plan despite the availability of identical or similar investment options with lower costs and/or better performance histories.

Source: Planadviser.com, April 2020

Liberty Mutual Sued Over Its 401k

Liberty Mutual is facing a class-action lawsuit brought by its 401k participants, who allege the plan's recordkeeping fees were out of control and the insurance giant allegedly violated ERISA by failing to rein them in.

Source: Investmentnews.com (registration may be required), April 2020

Why 401k Fees Are a Mystery

Despite fee-disclosure requirements passed a decade ago, it's not easy for participants to figure out how much they're being charged.

Source: Investmentnews.com (registration may be required), April 2020

Court Finds Fault With Fiduciary Fee Review

A federal judge has found that a provider breached its fiduciary duty of overseeing its own 401k by failing to monitor proprietary funds and its recordkeeping expenses, though it was not obligated to consider options other than mutual funds.

Source: Asppa.org, April 2020

The Math Behind Plan Fee Evaluations

Plan sponsors have heard -- and many excessive fee lawsuits state --that larger defined contribution plans, in terms of assets, pay lower fees. But do they? Determining whether fees are reasonable for participants requires an additional layer of calculation, and some fee elements and allocations make it more complicated than it should be.

Source: Plansponsor.com, April 2020

Fees for Large and Small 401k Plans Continue to Fall

More good news about fees and fee compression as plan sponsors and participants increasingly realize the long-term implications they can have on retirement. Both large and small plans saw cheaper prices for investment and administration, regardless of the situation and scenario.

Source: 401kspecialistmag.com, February 2020

Recordkeeping Fees Under the Microscope

Today, the landscape is rapidly shifting, and it definitely seems to be the case that per-participant recordkeeping fees are becoming the expected best practice, no matter what size the plan. Plaintiffs' attorneys and progressive plan sponsors are driving this trend. Their argument is simply that, with today's digital recordkeeping technology, it is no more work for the plan provider to administer an account with $1,000,000 versus an account with $100. Thus, the argument goes, it is not reasonable under ERISA for the fee to grow while the service being provided remains the same.

Source: Planadviser.com, November 2019

Five Key Points on 401k Plan Fees From ICI Research

Thanks to innovation and a competitive market, 401k mutual fund fees keep falling. ICI has a window into this information through our study of the cost of providing 401ks, in which they take a close look at the expenses and fees of mutual funds incurred by 401k plan investors, and in related research on fund fees through a collaborative research effort between ICI and BrightScope.

Source: Ici.org, October 2019

401k Fiduciary Responsibility and Mutual Fund Fees

Fiduciaries often are aware of administrative and disclosure requirements, but sometimes become negligent when choosing funds with reasonable fees. Even those who are aware can inadvertently fail to select the best mutual fund. While 401k fees have decreased in recent years because of litigation and various DOL regulations, mutual funds can still charge indirect fees that DOL would deem unreasonable. Unfortunately, fiduciaries with little knowledge regarding fee structures may authorize a plan to charge fees, decreasing participant balances.

Source: Forbes.com, September 2019

Vendor Fees: The Importance of RFPs

Investment advisor and recordkeeper searches are a very important aspect of the fiduciary duty of "procedural prudence," i.e., setting up and carrying out prudent processes that are intended to render beneficial results for participants. They provide 401k and 403b plan fiduciaries the opportunity to ensure not only that fees are reasonable, but also that the appropriate services, technology and education are being provided to the plan participants.

Source: Sgrlaw.com, August 2019

The Correct Approach for Controlling Retirement Plan Fees

When employees file complaints against their employers with the U.S. Department of Labor, fees for their retirement plan services is a very common reason. A burgeoning era of employee activism is underway in which plaintiff lawyers are finding fertile ground for litigation opportunities, catching many employers unprepared. Many other employers are ready, however, using an approach that offers a legally defensible result.

Source: Rolandcriss.com, August 2019

A Primer on Plan Fees

One of the many duties plan fiduciaries have is to understand the fees and expenses charged to their employer-sponsored defined contribution plan. This is a guide to the different plan fee pricing models and the steps to take to ensure fees are reasonable.

Source: 401khelpcenter.com

401k Fees in the Spotlight

While a plan's investment fee structure is now readily available via required annual notifications to employees, they don't make for the easiest reading. There are five main areas that are crucial in looking "under the hood" to see the total cost structure of a plan.

Source: Frenkelbenefits.com, May 2019

Fee Disparity Linked to Size of Defined Contribution Plans

Sponsors of small and midsize plans may be paying too much in fees, particularly if they're being charged a percentage of total plan assets, according to industry experts. The disparity can be attributed to both the plan sponsors themselves and the recordkeepers. Sponsors of small and midsize plans often don't have the time or knowledge to benchmark fees. Meanwhile, recordkeepers have pursued their own self-interest, pushing smaller plans into asset-based fee models, which may hurt participants long term, industry observers say.

Source: Pionline.com, April 2019

Tussey v. ABB Closes With $55 Million Settlement; Complex Case Changed Views of Fees, Fiduciary Duty

Tussey v. ABB, after winding through earlier settlement awards to the plaintiffs, two appellate hearings in the 8th Circuit, and double rejections by the U.S. Supreme Court, ultimately will be remembered both as a case about plan sponsors' fiduciary duties and one that defined how to quantify participant losses from related breaches. As a result, the retirement plan industry has moved in a unified way to press for reductions in service provider fees, opt for lower-cost share classes, and insist upon greater transparency for recordkeeping and asset management costs.

Source: Blr.com, April 2019

Fee Compression: Five Ways Providers Monetize Recordkeeping

While some of the compression can be attributed to vendor consolidation and scale, why would billion-dollar financial services organizations continue to invest in recordkeeping capabilities where profits have traditionally been so thin? The answer is: they believe there is an opportunity to generate additional revenue beyond the recordkeeping fees for servicing retirement plans. Generally, there are five areas where recordkeeping vendors have tried to monetize their relationship with retirement plans.

Source: Multnomahgroup.com, April 2019

What Are Average 401k Fund Fees?

This article breaks down what 401k expense ratios are and why they matter. Then it will walk you through the latest data on average fund fees, and end with insider tips sourced from industry experts on how you can lower fund fees for your plan.

Source: Forusall.com, March 2019

404(a)(5) Participant Fee Disclosures: Rules & Requirements

What the heck is a 404(a)(5) participant fee disclosure? And what are the requirements around sending them? This article demystifies this important document, breaking down what it is, why it's important, and everything else you need to know about sending it.

Source: Forusall.com, March 2019

Six Steps to Lower 401k Fees

401k plans are expensive. Plan fees, taken as a percentage of the assets, can add up to a huge chunk of change that can take years off of your or your employees' retirements. A two percent fee doesn't sound like daylight robbery, but over 35 years, that little fee can consume up to half of your retirement earnings. All of this is to say that minimizing 401k fees is crucial for retirement success. Of course, easier said than done.

Source: Forusall.com, March 2019

Sponsors of DC Plans Still Sharply Focused on Fees

For the third year in a row, respondents to the annual Callan Institute "Defined Contribution (DC) Trends Survey" specified reviewing their plan fees as a key area of focus and as the best way to improve their fiduciary position as plan sponsors. Asked in the fall of 2018, 106 defined contribution (DC) plan sponsors, both Callan clients and other organizations, said that for 2019, assessing fees was more important than any other activity they undertook in managing their plans.

Source: Hrdailyadvisor.blr.com, February 2019

401k Plan Sponsors Laser-Focused on Fees

Fees charged in defined-contribution plans rank as plan sponsors' top area of focus in 2019, according to a new report, as employers continue to worry that high fees for functions like administration and investment management could expose them to legal liability.

Source: Investmentnews.com (registration may be required), January 2019

401k Fiduciary Lawsuit Highlights Fee Benchmarking

Many 401k fiduciary lawsuits have focused on fees including, their reasonableness, their necessity, and whether the fees are being assessed for funds and services add value and help participants achieve their retirement goals. How often do you check up on your retirement plan fees? Investment committees need to be aware of their fiduciary duties and remain vigilant in carrying them out.

Source: 401ktv.com, December 2018

2018 Small Business 401k Fee Study - What's Too High?

Employers have a fiduciary responsibility to ensure the fees paid by their 401k plan participants are "reasonable" and not subject to unnecessarily excessive fees. To do that job, employers must benchmark their 401k fees - basically, compare them to industry averages and/or fee charged by competing 401k providers. Sounds straightforward, but this information is hard to find and often harder to compare on an apples-to apples basis.

Source: Employeefiduciary.com, November 2018

Making Sure 401k & 403b Fees are "Necessary and Reasonable" - Part One

As a plan sponsor, you are required to understand all of the fees that are associated your organization's retirement plan benefit program. This is a challenge because plan fee structures are often opaque, complicated, and downright misleading. The most effective way to meet your fiduciary requirement is a Request for Proposals process, typically run every three-to-five years. Why? The 401k and 403b markets are extremely competitive. They are constantly evolving and changing.

Source: Fiduciaryplangovernance.com, November 2018

ERISA: Thou Shall Not Pay Excessive Fees

With increased government scrutiny, ERISA lawsuits at an all-time high, and the plaintiff's bar not only increasing in number but in sophistication, 403b plan fiduciaries will continue to face high exposure if they fail to prudently select and then continue to monitor the investments options of their plans and plan fees. Litigation is not limited to large plans, as plaintiffs and the DOL have found that smaller plans are “low hanging fruit” in terms of finding ERISA violations.

Source: Ckrlaw.com, November 2018

How Do Fees Affect Plans' Ability to Beat Their Benchmarks?

Plans compare their returns by asset class to selected benchmarks that reflect their investment goals for the asset class. Plans pay fees to external asset managers with the expectation that the managers will exceed these benchmarks. As such, this paper focuses on the benchmarks to assess the role of fees. The question is whether higher fees help or hinder the ability for a plan to outperform its chosen benchmarks.

Source: Bc.edu, October 2018

Understanding Revenue Sharing and the Flow of Money in Retirement Plans

it's critical for employers to understand the various components of their retirement plans' fees, particularly indirect fees like revenue sharing arrangements. This 4-page article describes common ways in which money flows through retirement plans. Each provider may operate differently, so be sure to check with your provider for information specific to your plan.

Source: Grinkmeyerleonard.com, September 2018

Why Is Recordkeeping Pricing Different for 403bs?

The price of recordkeeping services is not uniform; it can vary depending on type of retirement plan. This article discusses why pricing for 403bs is different than that for 401ks including four factors that impact 403b pricing.

Source: Ntsa-net.org, August 2018

401k Plans May Soon Experience Higher Fees for Ancillary Services

401k plan fee reductions have been occurring in recent years as retirement plan vendors made a land grab for their share of the DC plan market. To date, those 401k plan fee reductions have applied mostly to costs for core services, such as administration and recordkeeping. If they haven't already, sponsors may soon experience higher 401k and 403b plan fees for "extras" such as plan distributions or loans, that only occasionally impact a portion of participants.

Source: 401ktv.com, August 2018

A Guide to Retirement Plan Fees & Expenses

This paper discusses retirement plan fees and expenses with the intention of assisting retirement plan sponsors in achieving a greater understanding of their plan fees. For the purposes of this paper, it will categorize the fees and then detail the specific functions typically related to each expense.

Source: Multnomahgroup.com, July 2018

What are the "Reasonable" Expenses That Can Be Paid Out From Plan Assets?

Under ERISA, retirement plan sponsors have a fiduciary duty that requires them to act solely in the interest of plan participants and beneficiaries. Plan sponsors are also limited to using plan assets for the reasonable expenses of administering the plan. Using plan assets for other plan expenses could be a breach of the sponsor's fiduciary duty and lead to potential fines and costly litigation.

Source: Bsllp.com, July 2018

The Differences Between 403b and 401k Pricing

403b plans are fundamentally different than 401k plans. Many of these differences result in a greater amount of work required to administer 403b plans and more work equals more money. This article looks at a few of the major 403b plan price drivers that do not exist in 401k plans.

Source: Cammackretirement.com, June 2018

Three Common Fee Blunders and How to Avoid Them

At the source of every headline grabbing fiduciary breach trial is a fee mistake. How can learning more about these everyday fee mistakes help 401k plan sponsors avoid them and the fiduciary liability they bring? Here are three of the most common plan sponsor fee mistakes and what to do to avoid them.

Source: Fiduciarynews.com, June 2018

Paying "Reasonable" 403b Plan Expenses

One of the perennial issues facing the sponsors, participants and fiduciaries of 403b plans, as well as the consultants servicing or advising such individuals or plans, is plan expenses. Section 403b plans, particularly those that are covered ERISA, must carefully watch what they spend with their limited resources.

Source: Ntsa-net.org, May 2018

Why Plan Sponsors Should Regularly Benchmark Retirement Plan

A vital plan fiduciary responsibility is regular benchmarking of plan performance and fees against industry averages. This kind of cross-referencing is the responsibility of plan sponsors and can come with significant risks and opportunities. This article looks at the factors that make sound benchmarking practices so crucial.

Source: Planpilot.com, May 2018

Many Small-Business Leaders Express Limited Knowledge of Retirement Plan Fees

Many small-business owners and managers don't have a good feel for how much they or their employees pay in fees to their retirement plans, according to a survey conducted by The Pew Charitable Trusts. The survey results indicate that many of these business leaders -- like many workers -- have limited knowledge about plan fees, a reality that can be detrimental to workers' long-term finances. Whether savers pay high or low fees on their investments can make a large difference over time in the growth of retirement savings.

Source: Pewtrusts.org, May 2018

Advisors, Sponsors Cutting 401k Fees

Plan sponsors, still feeling the pressure of the Department of Labor's six-year-old fee disclosure rules and the threat of fee-related litigation, are continuing to place 401k fees under the microscope. A number of other factors continue to drive down 401k fees, including a competitive marketplace, growing client awareness about fees, sharper value propositions from advisors, an increase in the quality and volume of reporting of plan outcomes, and an industry shift toward fee-based plans and low-cost investments.

Source: Fa-mag.com, May 2018

Understanding and Evaluating Retirement Plan Fees

With retirement plan fees serving as the centerpiece of ERISA fiduciary breach lawsuits, understanding the dynamics of retirement plan fees is critical for plan sponsors and fiduciaries. Regardless of plan size or defined contribution plan type, fees have become a primary focus and concern of plan fiduciaries. This article explores the three types of fees that retirement plan fiduciaries need to understand and evaluate.

Source: Cammackretirement.com, March 2018

401k Service Providers Owe No Fiduciary Duty With Respect to Negotiating Their Fee Compensation

Following the findings expressed in three other Circuits, the United States Court of Appeals for the Ninth Circuit recently held that plan administrators are not ERISA fiduciaries when negotiating their own compensation with prospective customers. Instead, because the employer/plan sponsor has the express duty under ERISA to defray reasonable expenses of administering a 401k plan, any claims that fully disclosed fee arrangements are unreasonable "lie against the employer, not the service provider."

Source: Masudafunai.com, March 2018

Making Sure 401k & 403b Fees are Necessary and Reasonable - Part Three

As a plan sponsor, you are required to understand all of the fees that are associated your organization's retirement plan benefit program. This article wraps up the three part series on the subject.

Source: Fiduciaryplangovernance.com, February 2018

Making Sure 401k & 403b Fees are Necessary and Reasonable - Part Two

As a plan sponsor, you are required to understand all of the fees that are associated your organization's retirement plan benefit program. This article continues the series on the subject.

Source: Fiduciaryplangovernance.com, February 2018

Making Sure 401k & 403b Fees Are "Necessary" and "Reasonable" - Part One

As a plan sponsor, you are required to understand all of the fees that are associated your organization's retirement plan benefit program. This is a challenge because plan fee structures are often opaque, complicated (needlessly so) and, sometimes, downright misleading.

Source: Fiduciaryplangovernance.com, February 2018

Lawsuits Push 401k Plan Sponsors to Cut Fees

Employers are moving to reduce their 401k plan costs in greater numbers, largely in an attempt to avoid the fate of peers who've been sued for allegedly excessive fees in their defined-contribution plans, new research suggests.

Source: Investmentnews.com (registration may be required), January 2018

ERISA's Reasonable Fee Requirement

Plan fiduciaries must review service provider fees annually against reliable indicators as part of proper plan governance. The efficacy of any such review depends upon the ability to break out fees for each service and to utilize acceptable benchmarks, rather than self-serving benchmarks supporting excessive fee arrangements.

Source: Cpajournal.com, September 2017

Webinar Replay: NEPC 12th Annual DC Plan and Fee Survey

NEPC's Ross Bremen, CFA, Partner, and Kevin McCullough, CFA, Analyst, hosted this review of NEPC's 12th Annual DC Plan and Fee Survey. NEPC conducted the Survey to capture data and trends around plan design, and to help plan fiduciaries better understand and measure the investment and administrative costs of their plans.

Source: Nepc.com, September 2017

Seven-Year Streak of Falling Corporate DC Plan Fees Ends

Investment consulting firm NEPC's annual defined contribution plan and fee survey reported that recordkeeping, trust and custody fees remained flat over the past year, the first time it hasn't declined since 2010.

Source: Ai-cio.com, September 2017

Participants' Best Interests May Not Be Served by the "Race to the Bottom"

While lawsuits and investigations have served a purpose in lowering plan fees, a side effect is that many plan sponsors, in their concern to meet compliance standards, have made a search for the lowest fees such a priority that they have unwittingly overlooked the best way to serve plan participants.

Source: Alliantwealth.com, September 2017

Expense Ratios for DC Plans Stall Out at a New Low

For years, fees on investments in workplace retirement savings plans have been falling. Now, at least for the moment, they're stalling. But there's room for improvement in plan options, and look out for new fees creeping in.

Source: Investmentnews.com (registration may be required), August 2017

Fiduciary Considerations for Plan Sponsors - Evaluating Plan Fees

A common theme running through class-action lawsuits filed against plan fiduciaries is the violation caused by not properly understanding and addressing the fees of their 401k plan. The article describes three methods for determining if plan fees are reasonable.

Source: Morganstanleyfa.com, August 2017

Pro-Rata Participant Fees and Fee Transparency: A Recordkeeper's Conundrum

As 401k fees are being challenged in excessive fee lawsuits, and participants are, rightfully, checking their accounts and verifying their fees, it is prudent to have fees that are fair and transparent.

Source: Rpgconsultants.com, August 2017

Defining Expense Accounts

What is a Plan Expense Account (also known as an ERISA Account, ERISA Budgets Account, or Revenue-Sharing Account)? This 5-page white paper deals with what they are, who are they for, how they work, why they exist, and how they are handled.

Source: Multnomahgroup.com, July 2017

Retirement Plan Fees: Top Three Questions Answered

With retirement plan fees serving as the centerpiece of fiduciary breach lawsuits, it is no wonder that this is the leading topic of interest with retirement plan fiduciaries.

Source: Cammackretirement.com, July 2017

Investment Manager and Recordkeeper Changes Driven by Fees

Plan sponsors' desire to reduce plan costs is substantially impacting their approach to investment menu design and their relationships with defined contribution plan investment managers, according to findings from Retirement Planscape, an annual Cogent Reports study by Market Strategies International.

Source: Plansponsor.com, July 2017

Making Sure 401k and 403b Fees Are "Necessary" and "Reasonable" - Part Two

You are also required to ensure the services for which the plan is paying are necessary and reasonable. The most effective way to meet this fiduciary requirement is a Request for Proposals (RFP) process. This is part two in a series on making sure 401k and 403b fees are "necessary" and "reasonable."

Source: Fiduciaryplangovernance.com, July 2017

Making Sure 401k & 403(b) Fees Are "Necessary" and "Reasonable" - Part One

A plan sponsor is required to understand all the fees that are associated your organization's retirement plan benefit program. This is a challenge because plan fee structures are often opaque, complicated, and sometimes, downright misleading. You are also required to ensure the services for which the plan is paying are necessary and reasonable. The most effective way to meet this fiduciary requirement is a Request for Proposals (RFP) process.

Source: Fiduciaryplangovernance.com, June 2017

Mutual Fund Trading Costs: The Most Important Fee You've Never Heard Of?

What if I told you that there is a fee present in mutual funds that is not included in the fund's published expense ratios and is often not publicly disclosed by the fund companies, since the SEC does not require its disclosure? You might laugh, but it is true.

Source: Cammackretirement.com, June 2017

The Economics of Providing 401k Plans: Services, Fees, and Expenses, 2016

The cost of investing in equity, hybrid, and bond mutual funds through 401k plans fell again in 2016, according to a research study that the Investment Company Institute just released. The 32-page study also shows that participants who invest in mutual funds in their 401k plans tend to hold lower-cost funds.

Source: Ici.org, June 2017

A Guide to 401k Fees and Fee-Related Liabilities for Retirement Plans

The topic of 401k fees has dominated the headlines for the better part of this decade. Running a company 401k plan is an arduous task. Navigating fiduciary responsibilities is also a potential minefield of liability as ambitious law firms aggressively attempt to exploit the subjective regulatory frameworks of the IRS and the DOL. Nowhere within a 401k plan is there more potential liability than with regard to the subject of fees.

Source: Forextv.com, May 2017

Four Questions to Guide Your Fee Evaluation Process

As a plan fiduciary, you have a responsibility to ensure your service providers' compensation is reasonable relative to the services provided. A fiduciary process for assessing fees can help meet your obligation to provide a plan that operates in the best interest of your employees. Your plan provider or consultant can help you navigate this process by helping you answer four key questions.

Source: Tiaa.org, March 2017

Fiduciary Fee Reasonableness

Fee reasonableness is a fundamental and widely discussed fiduciary topic. Despite the importance of the topic, the DOL hasn't given much insight or guidance as to what is considered a reasonable fee. As a result, much of the interpretation of what is and is not reasonable has come from the courts. As a fiduciary, it is important to turn to litigation for guidance, acknowledge how excessive fee allegations have evolved, and most importantly, to appropriately manage this risk in the future.

Source: Manning-Napier.com, March 2017

12b-1 Fees: It Is Time to Bid Them Farewell

Given the 12b-1 fee's implicit conflicts -- and their declining relevance -- arguably it's time to create a more appropriate pricing structure for the realities of today's investment marketplace.

Source: Kitces.com, March 2017

401k Fees -- Frequently Asked Questions by Plan Fiduciaries

If you're a 401k fiduciary, you don't want to be in the dark about your plan fees. The potential consequences for paying excessive 401k fees are too great. This FAQ will answer some of the most common 401k fee questions.

Source: Employeefiduciary.com, March 2017

Increased Litigation Leads Plan Sponsors to Take Defensive Stance in Monitoring and Evaluating Fees

When monitoring investment and recordkeeping fees, a plan sponsor would be smart to remember the recurring themes of recent 401k participant fee lawsuits. This article reviews the themes that have frequently arisen in recent fee lawsuits.

Source: Plansponsor.com, February 2017

For DC Plans, Lowest Fees Aren't a Panacea

There's no question fees are a hot topic for defined contribution plan sponsors. But one risk of focusing too tightly on fees is creating a distortion that addresses cost while possibly overlooking other retirement-saving factors. With so many equal or greater concerns, it's important for plan sponsors to keep a broad perspective and maintain a comprehensive approach to their fiduciary duties.

Source: Abglobal.com, January 2017

Understanding Your Retirement Plan Fee Methodology

Understanding your retirement plan's fees is not only a good practice, it's a fiduciary requirement. The principal reason fees have been thrust into the limelight is that plan participants often bear most, if not all the cost of running the plan. This article does not discuss how to determine if fees are reasonable, but instead explores a relatively new debate over which fee assessment methodology is fairer.

Source: Strategicbenefitservices.com, January 2017

Do Your Fiduciaries Negotiate for Lower 401k Plan Fees?

Fiduciaries of very large plans who wouldn't think of not haggling with a dealer over the price of a new car or a hotly negotiating a business deal have sometimes neglected to leverage their plan's size to negotiate lower 401k fees. The result is a sharply increased risk of being sued.

Source: Cohenbuckmann.com, January 2017

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