It's QUICK! It's EASY! It's EFFECTIVE and it's LOW COST! Determining fee reasonableness for your retirement plan requires you answer 10 questions or less. Benchmark your plan annually to establish a documented process and support your claim of procedural prudence. It's just that SIMPLE!
Fees impact the growth of your retirement assets no matter how small the plan. Where possible, minimizing fees without compromising the quality of or the number of services rendered is a prudent course of action. Monitoring fees annually is a fiduciary obligation and with PLANbenchmark it is quick, it is easy, and it is effective!
Reasonableness CANNOT be determined by aggregating fees for all services. According to the courts, you MUST determine and document if each component of service is reasonable. PLANbenchmark provides you a quick, easy, and effective way to benchmark each of the five primary components of service separately and in the aggregate.
ERISA imposes a fiduciary obligation on ALL size retirement plans to confirm and monitor fee reasonableness. This is an ANNUAL fiduciary obligation! Failure to conduct a fee reasonableness assessment subjects the plan sponsor to a fiduciary breach claim. The penalty for paying unreasonable fees requires a fiduciary to reimburse the plan for the expense paid, lost opportunity cost and excise tax. PLANbenchmark provides ALL retirement plans a low cost easy method to evaluate fees annually to avoid costly litigation. Choose PAY NOW, it is the only prudent option!
You are engaging in a process to benchmark plan level fees by service category. To determine if fees are reasonable the Department of Labor (DOL), the Courts, as well as many law firms, suggest a comparative process. A comparative process could involve either a formal Request for Information/Proposal (RFI/RFP) or benchmarking. Neither approach is mandated by statute or regulation but both are preferred methods of proving a documented process does exist. Failure to establish a documented process leaves a fiduciary vulnerable in a claim of fiduciary breach. Between the two options, conducting a formal RFI/RFP is the most time consuming and expensive. This may be why some Courts have suggested this process be pursued once every 3 to 5 years. FRA PlanTools™ does offer a RFI/RFP solution to assist with a search for a qualified advisor. The process follows court room standards for determining an advisor’s level of expertise. The cost is $995. For more information on this solution click here.
Alternatively, or at least in years an RFI/RFP is not conducted, benchmarking fees by service category is a time and cost efficient method of monitoring fees. It is important to emphasize that assessing fee reasonableness is not a one and done approach. A fiduciary is expected to monitor fees on a continuous basis. Changes in technology, investment options, share classes, revenue sharing terms, participant count, asset values, regulations and the benchmarking database all influence the determination of fee reasonableness. As such, it behooves a fiduciary to analyze and monitor fees at least annually to establish a process exists to determine fee reasonableness. However, benchmarking is only 1 of a 3 STEP process to comply with ERISA 408(b)(2).
ERISA 408(b)(2) imposes 3 STEPS to secure the exemption from a prohibited transaction when paying fees from plan assets. Remember, the DOL does not care if the company pays excessive fees from company assets but the DOL is intolerant of a plan paying excessive fees. For purposes of complying with ERISA 408(b)(2), the 3 STEPS are as follows:
Cost for creating a custom checklist is $750. Additional fees apply if we assist or do the analysis for you. To request a consultation to discuss, click here.
It may be possible to deduct the cost of benchmarking from plan assets if the plan document permits the deduction of such expenses, the expense is considered necessary for the operation of the plan and the expense is reasonable. ERISA also includes a provision that will enable you to seek reimbursement from the plan if you pay the expense. However, before deducting any expense from plan assets you should seek the opinion of ERISA counsel.
|Cost to conduct a single plan analysis||5 Pack|
|Per Report||Includes all services for a single plan, PLUS|
|Benchmark plan level fees||20% Discount|
|Benchmark up to 6 service expenses
(Advisory, Investment Management, Recordkeeping/Administration,
Custody/Trust, Communication/Education and Actuarial)
|Compare costs to plans of similar asset size|
|Fee applies to each benchmark report processed|
|Access the Advisor Community|
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