Retirement Plan Fees Are Not Straightforward

It’s important for employers to understand the multiple types of fees and ways they’re charged for retirement plans. Fees typically fall into three buckets:

There are also levels and layers within these categories that increase the complexity of retirement plan costs. And they can vary greatly, depending on the size of your plan, the number of participants and the plan provider. Many employers don’t understand the full extent of the fees that can be charged, and as a result may be paying too much.

For example, advisory and recordkeeping fees are often embedded in investment expenses to pay the advisor or broker associated with the plan. Benchmarking your plan to evaluate all charges gives you the opportunity to negotiate for fee reductions, which may range from several thousand dollars to more than $100,000.

Finding Excess Fees, Negotiating Reductions

USI Consulting Group (USICG) delivers a customized fiduciary expense analysis for clients. We independently benchmark and evaluate all fees, and compare your plan against others’ using our proprietary process:

USICG’s consultants can act as co-fiduciaries for clients, helping them mitigate risk in the administration and investment oversight for their retirement plans.¹ The benchmarking and analyses we conduct indicate most employers are being overcharged for their plans, with USICG finding fee savings in more than 75% of the retirement plans we review.² Determining where fees can be reduced and negotiating fee reductions are important services that help employers lower plan costs and avoid potentially costly penalties, fines or legal exposure.

Case Study: Lower fees, increased services

For a Midwest food and hospitality provider, USICG’s benchmarking and evaluation services resulted in tremendous recordkeeping fee savings. The client hired USICG as the plan’s co-fiduciary investment advisor and consultant. USICG used its proprietary database to benchmark the plan and noted opportunities to lower fees.

Through a fee negotiation with the recordkeeper, USICG leveraged its market scale and recent request for proposals that were run for other clients to secure a 52% reduction of annual recordkeeping fees, while enhancing services to alleviate administrative issues, including the streamlining of payroll processing.³