Negotiating Retirement Plan Fees

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Get the biggest bang for your buck! Negotiating retirement plan fees with your providers.

According to employers, one of the most harrowing aspects of their fiduciary obligations is to ensure that retirement plan fees are reasonable. From administration and recordkeeping to compliance and investment management—how can an employer feel assured that they are aware of all plan fees, understand them thoroughly and then determine their fair and reasonableness? It’s quite a task!

Best practices dictate the use of comparative reports and/or live-bid fee benchmarking- such as a Provider Analysis report. Once produced, that analysis serves as documentation of the plan fees. But what happens when the data shows that your plan provider’s fees are higher than the other providers? The DOL does not require an employer to pay the lowest fees, but reasonable fees. Maybe your provider is meeting your plans needs and service expectations well. In this situation, CSi engages in a fee negotiation with your provider on your behalf.

If you want to pursue other providers, prudent steps are:

1. Determine the alternate bidding providers who would be a good fit for the needs of the plan. CSi will guide you in this process and request the fee proposals from the alternative providers, and provide a comparative analysis and fee comparison.

2. Based on the information from the alternative providers, CSi will work with the incumbent provider for a possible fee concession within range of the bidding providers. In many cases, fees are brought down to the median fee range of the bidding providers.

3. Determine if you wish to interview other providers for services. CSi will put together a finalist agenda, arrange for the presentation, and provide the committee a scorecard to rate the providers.

4. Based upon this, you will have the information you need to make an informed decision.

It is your fiduciary responsibility to know and understand your fees, and determine if they are fair and reasonable. As is the case anytime you negotiate fees, the process can be tricky. As a dedicated retirement plan advisor, we are qualified and proud to undergo this complex task for you, so that you feel confident in meeting your fiduciary obligation to ensure your plan fees are fair and reasonable.

You will receive a response within 24 hours of delivery.

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This information is not intended as authoritative guidance or tax or legal advice.

ACR#3977911 12/21