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401(k) Plan Fees - Doing Right by All

| April 27, 2017
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April 27, 2017

 In the new world of fiduciary scrutiny and media attention, many employees are looking at their retirement plan to see if they are paying the lowest cost for their plan investments. Plans which use revenue sharing to pay plan expenses can find themselves discriminating against participants who use investments which pays back revenue to the plan versus one which do not. One solutions is to use investment alternatives which pay no revenue sharing (use lowest cost share class) and charge a pro-rata asset charge to all participants to pay for plan expenses.

 I recommend a plan sponsor pay all service providers as a corporate expense even if they have to lower matching or profit-sharing contributions in order to avoid the fiduciary liability of assuring that plan fees are reasonable. If plan fees aren’t being paid from plan assets, then there are no issues.

 If you would like more information on how to design your company retirement plan to avoid unnecessary fiduciary liability and help your employees accumulate more wealth inside their retirement plan, you can contact Chuck at Midtown Financial in Greensboro, NC at (336) 852-4554.

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