Fee Benchmarking

The Employee Retirement Income Security Act of 1974 (“ERISA”) requires retirement plan fiduciaries to ensure that all fees paid out of the retirement plan are reasonable in light of the services being rendered. Plan sponsors are not required to purchase services from the lowest bidder, but they must be able to demonstrate a deliberative process by which the reasonableness of applicable fees is regularly considered. The topic of fee reasonableness has become a critical Department of Labor focal point since the late 2000s, making it extremely important for plan sponsors to be able to clearly articulate the process by which fiduciaries conclude that all plan fees are reasonable considering relevant facts and circumstances. The concept of fee reasonableness has grown so pervasive that most plan sponsors not covered under ERISA also seek to ensure fee reasonableness as a best practice. We provide plan specific fee benchmarking analysis to assist our clients in meeting the fee reasonableness standard. Our goals in providing the fee benchmarking analysis to our clients are as follows:

  • Assist ERISA covered clients in meeting ERISA’s fee reasonableness standard
  • Assist ERISA exempt clients in maintaining a fee reasonableness best practice by providing meaningful comparison
  • Assist clients in understanding applicable plan services fees by discussing the current fee structure
  • Provide a discussion springboard for related topics such as the duty to prudently monitor the plan’s vendors
  • Recommend potential next steps (e.g. renegotiate service provider fees and/or service levels, launch formal request for proposal process) depending upon where current fees fall in or out of the benchmarked range

Recently, Brian and Dan were again named to the Financial Times list of 401 most elite DC plan advisors in the U.S.  It is awarded to financial advisors advising at least $50 million in defined contribution (DC) plan assets where DC plans represent at least 20% of total AUM. Graded on several criteria, including growth in DC plans and assets, plan participation rates, experience and industry certifications, and compliance record.

 

 

The Financial Times 401 Top Retirement Plan Advisors is an independent listing produced by the Financial Times (September 2016). The FT 401 is based on data gathered from financial advisors, regulatory disclosures, and the FT’s research. The listing reflects each advisor’s status in seven primary areas, including DC plan assets under management, growth in DC plan business, specialization in DC plan business, and other factors. This award does not evaluate the quality of services provided to clients and is not indicative of this advisor’s future performance. Neither the advisors nor their parent firms pay a fee to Financial Times in exchange for inclusion in the FT 401.

 


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