Four questions to guide your fee evaluation process:
As a 401(k) plan fiduciary, you have the responsibility to ensure your service provider’s compensation is reasonable relative to the services provided. A fiduciary process for assessing fees can help you 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.
1. Who is receiving compensation from your plan?
◊ Identify all plan covered service providers receiving direct and ‘indirect’ compensation.
◊ Following a documented process to regularly monitor each of your providers is considered a best practice.
2. What are the fees and expenses associated with your plan?
◊ Understand all of the fees associated with your plan and how they are charged.
◊ What share class are your funds? Why was this share class chosen?
◊ Thing about using an ‘all-in-fee’ approach to determine your total plan costs and to help facilitate the fee evaluation process.
3. How do your fees and expenses compare to other service providers or investment options?
Determine if any changes are necessary to the plan’s investment options or services based on your fee evaluation. A knowledgeable plan consultant can facilitate a thorough review of fees and services if you do not have the internal expertise.
4. Why is the compensation warranted?
◊ Catalog the full range of services that are included in your plan fees. This can help you prioritize the services according to what you value and what benefits the plan most.
◊ Evaluating how your plan’s services are delivering upon your plan’s objectives is considered a best practice. Your provider or consultant can help you identify retirement readiness metrics for your plan.
Request your complimentary & confidential 401(k) fee comparison today.