SURVEY SAYS: Are Your Fees Fair?

February 22, 2007 ( - The issues are myriad, of course - and while ERISA does not require that the fees paid be the lowest, it does impose a duty to make sure that the fees and services received for those fees be "reasonable."

This week I asked readers to characterize their plan’s fee/service combination; is it (a) fair, (b) a bargain, (c) unfair, (d) unknown, (e) a crime, or (f) other?

The good news – no one responded that their current structures were “a crime”, nor did anyone confess that the value of the fee/service combination was “unknown (although our annual Defined Contribution Survey suggests that as many as one-in-ten are in that category).   Still, roughly 5% did characterize the structure as “unfair”.

On the other hand, nearly 14% were willing to call them a “bargain” – and several of the 3% in the “other” category said they were a bargain from the participant standpoint, since the plan sponsor picked up the tab for the fees.

Consider, however, that more than three-quarters ( 78% ) of this week’s respondents said that the fees paid for the services rendered were – fair.    

Included among them was this week’s Editor’s Choice , who said their fee/service combination was ” Fair” – – – but we don’t do a good enough job publicizing that fact for our employees.”

Thanks to everyone who participated in our survey!