The goal is to make sure that your company is not being over charged, has competitive investments to choose from and that your employees have access to ongoing plan education and financial advisory services as part of the plan benefits.

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Here are a few things to ask yourself:

• Are your retirement plan participants currently being charged for advisory services?

• Do you know exactly how much the charge is?

• Are your employees getting access to the services they’re paying for?

• Are your plan fees in line with other plans of similar size and features?

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If you cannot answer "Yes" to all of the above questions you definitely owe it to your employees to have an outside audit by a fiduciary to ensure your retirement plan is up to date and performing properly. If you are not savvy with financial strategy, these can actually be very difficult questions to answer on your own. Often employees will ask that their employer to hire an independent fiduciary – such as myself –to do an audit and plan comparison. Plan Administrators should be ahead of this action by contacting someone like myself to have benchmarking information and an audit done for when your employees approach you.

When was the last time you performed an audit of your record keeping and advisor fee?

 

Frequently the largest cost savings can be found within the compensation charged for record keeping services. This number is not required to be public information on your Form-5500 and is often not negotiated after original adoption.

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Is your plan sensibly managed?

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There is a theme here and that theme is that this, too, is tough to tell on your own. A respected plan allows participants to diversify across global assets, with a mix of fund companies that are not ‘proprietary funds' at low cost to the investor.  

 

If you only have a handful of fund selections, or those funds are concentrated in one asset class, you may likely be liable if an employee decided to bring legal action. The advisory services area is where we uncover the most negligence and where your plan participants are being left behind.  

 

As of late, The U.S. Labor Department has ramped up its oversight in this area. That said, the DOL and SEC have done little or no enforcement in the past, thus there hasn’t been enough initiative to audit the retirement plans and to benchmark cost and investment research to industry standards.  

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Most HR departments don’t even realize it’s an ethical obligation to perform an audit. Considering the charges are coming out of the plan participant’s investment balances, the more you save in your cost to the plan is a direct correlation to the better potential yield for retirement savings by your employees. 

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To begin the process of performing an audit and to create a proposal for you to view:

• I simply need the ‘408(b)(2) Disclosure’ document. You can easily access this document by reaching out to your relationship manager within your record keeper and ask for the 408(b)(2) disclosure document.

• Forward it to me and I will get to work – ari@spartanwealth.com

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If you are an employee of a plan that you feel isn’t properly being managed, know that it is your money paying the fees, and that you have the right to request a prudentially managed plan! 

• Reach out to me and we can discuss further: (313)549–5000

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Example – International Paper employees sued and won a settled against their employer over the high fees in their 401(k) plan.