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Sponsoring a workplace retirement plan requires the support of different plan providers. It is important to understand how each of the following partners surrounds the plan sponsor to fulfil their duty to participants:
Also, under the Employee Retirement Income Security Act of 1974 (ERISA), retirement plan sponsors have a fiduciary duty that requires them to act solely in the interest of plan participants and beneficiaries. Plan fees and expenses are important considerations for all types of retirement plans.
The DOL Employee Benefits Security Administration (EBSA) has provided guidance on ERISA plan expenses. These costs are divided into two categories: settlor expenses and plan expenses. Settlor expenses typically benefit the plan sponsor and are not directly tied to participant benefits. Plan expenses that are reasonable and benefit plan participants can, generally be paid out of plan assets.
Understanding and evaluating plan fees and expenses associated with the plan services are an important part of a fiduciary’s responsibility.Plan fiduciaries are not only responsible to control total costs, but each component expense for every service provider as well. Since this responsibility is ongoing, you should expect your investment advisor to coordinate, cumulate and benchmark your plan fees periodically to ensure that your costs are "reasonable and necessary" for the services provided.