Rushing to Levelize Fees May Increase Liability

Investments offered in a retirement plan often provide different amounts of revenue sharing which is used to offset the administrative costs associated with the plan. Often times, investors with entirely passive allocations may not contribute toward the administrative costs at all. Fee levelization is the use of recordkeeping systems to ensure administrative costs are being spread equitably among participants, and is becoming increasingly popular. However, these systems are not fully developed on every platform and before rushing into the process, plan sponsors need to be aware of potential liability associated with an ineffective solution. Click here to read BFSG’s recent white paper on fee levelization.

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