What are the biggest fee issues facing retirement plan sponsors?

January 4, 2022

Most plan sponsors didn’t expect to become retirement plan experts. Yet, with the growing number of fiduciary breach lawsuits, more knowledge is key to successful plans.

Start at the beginning. Your Plan documents, service agreements and fee disclosures have the answers to the most important “fee questions”: How much is this retirement plan costing my company and my participants and who is collecting these fees and are they reasonable?

Understand Mutual Fund Expenses. Different mutual fund share classes have different costs. We frequently see institutional investors purchasing retail share class mutual funds often packed with unnecessary fees that can lead to higher costs for plan participants and lawsuits. Understanding different share classes is not always straightforward as share classes differ only in price – the underlying investments are identical.

Checking the Fees. Since fees are typically paid out of plan assets, there’s no line item on an organization’s financial statement forcing a regular review. Keeping track of plan fees mitigates fiduciary risk and, more importantly, continually improves employees’ plans for better outcomes.

Benchmark your retirement plan. The only way to determine if the fees within the plan are reasonable is to benchmark the plan with an outside, independent consultant.
Contact Centurion Group to discuss having your plan independently benchmarked. This is what we do. Better Thinking for Better Outcomes.