ATTENTION PLAN SPONSORS:
This is a reminder that you have a fiduciary obligation to your participants to be benchmarking your plan.
We hear from plan sponsors that they are happy with their current provider and don't want to change.
But it doesn't matter whether you like them or not if you do not have a process in place to monitor the fees they are charging you.
Period. End of story.
Here's an example of why:
There is an ongoing lawsuit against U.S. Bank and a breach of their fiduciary duty to their plan participants.
The suit alleges that U.S. Bank failed to monitor both it's recordkeeper and it's managed account provider:
"The two ex-employees accused the defendants of offering a plan with excessive record-keeping fees and failing to replace the plan's record keeper and managed account service provider."
These types of fiduciary breaches happen when a regular schedule of benchmarking the plan isn't happening.
How do you know if you have a reasonable cost from your plan providers if you aren't benchmarking the plan?
""Defendants unreasonably failed to leverage the size of the plan to pay reasonable fees" for record keeping and managed account services and failed to conduct "a competitive bidding process to see if (the) same level and quality of services could be had by the plan for less," the lawsuit said."
Process, process, process.
The point here? Make sure you are prudently monitoring the fees you are being charged from all parties to the plan.
Need help? Need a benchmark? We would be happy to help and discuss how it works.
Call direct: (626) 224-7715