Wednesday, July 25, 2012

What Do You Think of Those Retirement Plan Fee Disclosures You've Received

Ah, ERISA 408(b)(2). Those horrible fee disclosures. If you're a plan sponsor, you've gotten a bunch by now. What are you doing with them?

If you're like a lot of other plan sponsors, you have newly found information. You have a better idea of how much you are really paying for various services. So will everyone else.

That means that you are in the beginning of a time where you can find out just how high or low those fees are. Are you paying a lot for a high-priced firm? Are you getting the level of service that justifies those high fees? If the answer is yes and you are happy with that equation, that's great.

Suppose the answer is no. Suppose you haven't changed firms despite mediocre service and now you find out that you are paying top dollar for that mediocre service. Perhaps you haven't changed providers for a while because it's just a hassle and a little bit of fee savings just wasn't worth it. Now you learn that there are a lot of savings to be had.

Consider why you are paying so much. Perhaps you've been with the same firm for years and years and they've just been raising your fees over time ... because they could. Perhaps you are with a firm that has a lot of overhead which helps their best people to provide better service, but you're not getting that level of excellence. It might be that you are not quite in their market sweet spot and while they tell you how much they value your business, they have assigned a 2nd or 3rd tier team. You're still paying for the best they have, but you're not getting the best they have.

Does any of this resonate with you? You're not sure? You can find out now. Or, to the extent that you don't have all the data you need, you can certainly find out soon. If when you do, you're not happy, rest assured that there are plenty of firms out there that would love to work with you and charge you a reasonable level of fees.

Think about it. You have a fiduciary responsibility under ERISA.

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