Organizations that have achieved advanced levels of governance, risk management, and compliance have realized significant benefits in their costs, employee satisfaction, and regulatory readiness.
Retirement Plan Services Pricing
The asset-based approach used by service providers to compute their fees has been sold to human resources managers by vendors as industry standard pricing. The U.S. Department of Labor enforces fiduciary rules using a market-based standard, not a so-called industry standard.
Asset-based pricing is insidious if left unchecked. It usually generates an ever-increasing amount of compensation for a vendor regardless of whether the vendor’s service level increases to match its fees. While asset-based pricing is not illegal for vendors to employ, it is the fuel that can ignite an adverse legal event for any employer that gives way to industry standard pricing, unwittingly or otherwise.
Asset-based pricing for retirement plan services typically depletes employees’ assets unfairly. The negative impact of which is reflected in the analysis of retirement plan accounts presented in Roland|Criss report Solving the Retirement Plan Fee Crisis (request a free copy below). The depletion of employees’ assets due to excessive fees paid to vendors is a major risk for human resources managers and their committees.
Quantifying Service Quality
To measure the impact of excessive fees on a retirement plan, we created an operations assessment program that consists of four critical attributes. Embedded in the program is our proprietary Vendor Value Index™, which isolates fees from services actually delivered, and scores each component separately.
Fee indexing is an easy solution to the complex challenge of eliminating excessive fees from a retirement plan.
To ensure that your plan’s pricing structure is appropriate, isn’t caught in the grip of inappropriate fees, and that the quality of services your employees receive meet or exceed those fees, an annual operations risk assessment is a must.
Gain fresh insights and learn more from Roland|Criss’ impact study titled
“Solving the Retirement Plan Fee Crisis.” It’s free.
Vendor Value Index is a trademark of Roland|Criss Fiduciary Services
