Are plan investments paying for everything?(INVESTMENT CORNER)

All too often, we hear plan sponsors referring to their retirement plan as costing them nothing. The assumption is, if there are no invoices, no per head charges, and no one is writing a check, then it must be free. This is a common misconception among plan sponsors, and regulators are beginning to intensify their scrutiny as an onset of new lawsuits regarding plan fees begins to hit the courts. ERISA clearly states it is the responsibility and duty of the plan sponsor to understand and disclose plan fees to participants. The recent litigation highlights the lack of disclosure of fees and revenue sharing agreements prevalent in the industry today.

It is common practice for plans with assets greater than $5 million to experience this apparent "free ride." It usually consists of no out-of-pocket expenses to the plan sponsor for recordkeeping, administration, investment advice, or participant services. In many cases there are no per head fees charged …