Fee Transparency


Fee analysis and transparency are vital for successful retirement plans. Understanding fee impacts and conducting benchmarking helps plan sponsors make informed decisions and protect themselves as fiduciaries. Below, we explore various fee types, and offer guidance for effective fee management in retirement plans.

Fee analysis affects plan performance directly. Transparent disclosure fosters trust between participants and sponsors, ensuring clear understanding of expenses. Properly disclosing and documenting fee analysis also helps protect plan sponsors since they are fiduciaries to the plan. Retirement plan advisors can assist sponsors with the fee analysis, education and documentation, as added fiduciary protection.

Retirement plans have fees like investment management, administrative, advisory, and transaction fees. High fees can reduce returns and hinder participant growth.

Guidance on Effective Fee Management: To manage fees effectively:

1. Conduct Regular Fee Benchmarking: Compare fees against industry benchmarks for competitiveness.

2. Negotiate with Service Providers: Use benchmarking data to negotiate better terms.

3. Assess Service Provider Value: Evaluate not only fees but also service quality and support.

4. Understand if the Plan Funds Have Revenue Sharing: Identify if there are any revenue sharing arrangements. If possible, direct the revenue share back to participants as a way to improve outcomes and lower overall fees for the participant.

5. Educate Participants: Transparently communicate fee information to empower participants.

By understanding fee impacts, conducting benchmarking, and transparently communicating fees, plan sponsors can provide better outcomes for participants and ensure long-term success. Retirement plan advisors, such as Innovative Investment Fiduciaries, LLC are equipped to help plan sponsors analyze and benchmark fees, negotiate with providers and document the steps necessary as a prudent fiduciary to the plan. For more information on how to review your plan fees, contact the Innovative team at resources@iifria.com or call (856)-242-3343.

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