PSNC 2010: Top Fiduciary Concern: Fees

Mark Davis, Vice President and Financial Adviser at CAPTRUST Financial Advisors, says the concern is who is paying fees. Sponsors should look at their investment adviser and recordkeeper and the money that is moving back and forth.  

Especially in the case of target-date funds, less experienced participants are bearing the most of plan fees because of revenue sharing, Davis contends. He noted that the Department of Labor has recently put out a target-date fund checklist.  

In addition, Davis warned that with new disclosure rules coming, participants will see that some are paying more than others, and sponsors need to address that issue ahead of time.  

Dallas Salisbury, CEO, Employee Benefit Research Institute, added that sponsors should review the fees for any fund they are defaulting participants into, whether target-date funds or something else. When selecting a default investment, sponsors should consider participant demographics.  

Annita Riddick, Senior Consultant at Towers Watson, reminded sponsors that it is their fiduciary responsibility to know where plan fees are going, whether they are reasonable, and whether any conflicts of interest occur.  

Davis advised attendees that now would be a good time to renegotiate fees.