#recordkeeper

By:  Braden Priest, CFA®, Retirement Plan Consultant

A recent survey from TD Ameritrade showed only 27% of 401(k) participants knew how much they were paying in fees, and 37% mistakenly believed their retirement plan was entirely free! We’re here to set the record straight about 3 common retirement plan myths:

1. The Retirement Plan is Free – Don’t shoot the messenger, but retirement plan service providers do not work for free. If it appears your retirement plan has no explicit costs, it’s because your providers have done a great job of burying their compensation in the Plan’s investment options, and what you can’t see you can’t measure! If this is the case, you are required as a fiduciary to “know your Plan’s fees”.
2. All Participants Share Equally in Plan Fees – If your retirement plan utilizes revenue sharing to cover its administrative costs, chances are there is a highly unequal distribution of fees across your participants. Some investments may contribute nothing to the administrative costs of the Plan, while others may contribute more than is needed. 
3. The Plan’s Recordkeeper Already Provides Adequate Fee Benchmarking – Recordkeepers are in business to make money and they are not fiduciaries to your plan participants. While provider fees may well be reasonable, it is the responsibility of the plan sponsor to independently benchmark fees against the broader marketplace.

Reach out to one of our Retirement Plan Advisors today to see if your plan is receiving competitive fees from your service providers.

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