401k Plan Fee Benchmarking services can pay for themselves in future cost savings. After a recent Fiduciary Training Program at Rice University, The Plan Sponsor University Founder and CEO, Fred Barstein interviewed Mr. Phil Hopper, Plan Administrator of the company 401k retirement plan. The company recently conducted a 401k plan fee benchmarking to determine the value of the services being delivered by plan service providers. Conducting a 401k plan fee benchmarking should be important to every Plan Fiduciary and Retirement Committee Member. The findings and the resulting savings can be substantial.
Full Transcript Here
This is Fred Barstein with 401k TV here at Rice University on Campus where we just completed a TPSCU program here with Phil. Welcome Phil.
Phil has been nice enough to volunteer. Okay if we ask you a few questions today?
One of the things you talked about today is you went through a whole fee analysis.
Right? Why did you do that?
Well we were not really satisfied with maybe the performance of the funds and started looking at how much the management fees were for each fund in different categories. We just kind of got interested in that and then we found out about revenue sharing and all those issues and so we just really kind of wanted to find out down to the bottom line who made what and what we’re being charged.
And how was that a difficult process? Did you have help to do that?
We had to hire an outside firm to do that?
An advisory firm?
An advisory firm, correct.
And so what did you find out?
Well, we were really surprised how much we were paying, how much that we could save by doing different things.
Right. And so did you go through that?
And change it?
We probably cut our fees over 50%.
Wow. And you maintained the value and everything?
Yeah. I think I had better choices.
So knowledge is power? Is that?
To do it. So, well that’s great, it’s a good lesson and it’s simple, right?
So, final question a couple of things that you picked up today that you want to take back?
Probably just look at some of our plan documents and make sure we have things in order, maybe look at more educational things for our employees, things like that.
So the plan documents sometimes we set it and forget it.
Like our employees do with the investments.
It’s always good to review it and maybe update it.
Exactly right, yeah.
Very good, well thanks for your time today.
Okay, well thank you.
And thank you for watching 401k TV. Stay tuned.