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Retirement Plan Investment Fees Need Oversight

Retirement Plan Investment Fees Need Oversight

Retirement plan investment fees continue to be a hot topic for plan sponsors, retirement committees and the Department of Labor (DOL). Retirement plan investment fees can fall within a broad range depending on the style and structure of the investment lineup.  However, retirement plan investment fees must be managed in the interest of the plan participants.  At the conclusion of a Fiduciary Education Program in Nashville, Tennessee, Fred Barstein, Founder and CEO of The Plan Sponsor University (TPSU), visited with Human Resources Advisor and Plan Administrator, Stacy Henderson.  Ms. Henderson describes her company’s decision to have the retirement plan investment fees be paid by the company through the use of R-6 shares in their plan’s mutual funds.

Full Transcript Here

Fred Barstein with 401k TV in Nashville, where we just completed one of our largest TPSU programs ever. Happen to be here with Stacy, welcome Stacy.

Hello, thank you.

Okay, if we ask you a few questions?


Very good, thank you. Before we do, I’ll tell our audience a little bit about yourself and your role.

My name is Stacy Henderson, I’m a human resources advisor at Pinnacle Financial Partners, and I also administer the 401K plan.

Very good. I was very impressed, Stacy, because in the program you talked about you moved to an R6 share, so can you tell our audience what R6 is?

Well, to my knowledge, our plan benefit committee had been desk kissing this for many years, and so R6 is more so a share class where it becomes fee-based, and the company has the option to pay for the fees, or it can be distributed among all the participants equally.

There’s no revenue sharing, and it’s what we call a clean share, very transparent. Why did your company move to that?

Well, based on just the discussions that I was in on from claim benefit, they just felt like it was more fair and equitable to all the participants to either share in the fees equally or not. That they decided that the company would take on that responsibility.

Right. Now, does the company pay for the benefits, or is it then the fees are equally distributed to all the employees?

The company pays.

The company pays for that. That’s great to do that, it’s very nice of your company. I’m sure we’re going to get a lot of people applying for a job there after this video. We think that going through transparency and that kind of equalization, fee equalization is a great benefit to do it. Final question, a couple of things that you picked up, that you wanted to try to implement when you go back to the office?

I’m very interested in seeing how auto-enrollment might work for our company. We have a very high participation rate, so I don’t know that-

What’s your participation rate?

It hovers between 91 and 93 percent, and we have about 2,400 participants.

Yeah, so that’s pretty good. You might want to right auto escalation.

That’s … Yes. I would love to see us go to a six percent match.


That’s always beneficial when you’re bringing on new talent.


To have that as a negotiating-

Especially in these low unemployment rates.

Yes. Yes. Of course, education. Always finding creative ways to educate and share information about diversity, and your investments, so that everyone has a stronger sense of what their goals would be for their plan.

Making it a little bit more fun, not so stoic, right? So great. Well, thank you for your time, Stacy.

You’re welcome, thank you.

Thank you for watching 401k TV, stay tuned.


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