Do you know if your pension plan is overpaying for investment services?

For many sponsors of defined benefit pension plans,¹ investment fees can be a complicated subject. The Employee Retirement Income Security Act of 1974 (ERISA) requires that plan fiduciaries ensure fees paid to service providers are reasonable, but this isn’t always straightforward. Investment services may be difficult to price and even harder to compare.

 

Service offerings can vary significantly, and fee schedules typically aren’t publicly available. ERISA Section 408(b)(2) fee disclosures were created to help provide transparency to plan fiduciaries regarding the fees charged by various plan service providers, but they may not be easily understood by plan fiduciaries.

 

This paper is intended to help plan fiduciaries understand their obligations regarding investment fees. In support, it provides descriptions of different types of investment arrangements, ways fiduciaries can assess the investment-related fees being paid, and a detailed case study.

 

This paper discusses the following:

 

• Background on types of investment fees
• How to confirm fees are reasonable
• How plan size can affect fees
• Hypothetical case study

Read our paper for actionable insights to help ensure your pension plan’s fees are reasonable and well understood.