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Fee Benchmarking for Retirement Plans.

Why should you benchmark your plan?

As a steward of your employees’ retirement savings, you have a responsibility to act prudently on their behalf. Any fees that may impact participant savings should not only be clearly disclosed, but also necessary and reasonable.

Have you looked at your fees lately? Are they reasonable?

The lack of transparency, clarity, and uniformity among some service agreements is astounding. Although fee disclosure regulations under ERISA §408(b)(2) were well intentioned, the delivery has fallen short. Plan Sponsors still have difficulty understanding many of the fees. The regulation has added a layer of bureaucracy riddled with potential pitfalls for Plan Sponsors.

What is Benchmarking?

Benchmarking is a process that involves finding all your fees, and then comparing them to plans of similar size and make up.  There are a myriad of benchmarking tools available, however each benchmarking service has its own methodology and data set. Thus, results can vary greatly from database to database.  Benchmarking offers a clear quantitative baseline for fee reasonableness without having to ask for Request For Proposals (RFP’s).

Benchmarking Isn’t Enough!

Benchmarking fails to incorporate qualitative considerations like experience, support, and clarity. Benchmarking alone also fails to quantify services actually being delivered versus those which are merely listed in the agreement.  For example, we see many investment advisor agreements which promise employee 1-on-1 meetings, however in practice the advisor hasn’t met with the client or any of their participants in years. In a benchmarking database, there are values assigned to each service, but what is the true value if they are not being delivered?

Contact us today to find out if your fees are reasonable!





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