PLANSPONSOR - August/September 2021 - 11

Also, as they are used in part to pay TPA
fees, people might assume a conflict of
interest, she adds.
" There's very little guidance about
where to put the assets, " Wetzel says. " The
DOL [Department of Labor] in 2013 said
assets in the accounts are not plan assets
if they are held by the TPA. However, it
also said it's not going to say the money
can't be plan assets. " And sponsors
might be surprised at how quickly ERISA
accounts can grow, she says.
Procedural Prudence
Wetzel contends that most employers are
unfamiliar with ERISA accounts and,
when they discover they have one, think
they have found free money. " The logic is,
'This is what that fund costs, so anything
we get back in revenue share is extra.'
" Plan sponsors need to drill down on
whether the net of what participants pay
for the funds-and what they [therefore]
don't have to pay for administrative fees-
makes those funds cheaper, or whether
there's a fund or share class that will offer
a lower cost, " Wetzel says. " If revenue
sharing is not reducing participants'
fees or being given back to participants,
then they're paying a higher fee " than for
a non-revenue-sharing fund. Sponsors
should be able to justify why they use a
higher-cost fund if they do, she says.
Keller says he thinks the courts give
revenue sharing claims little traction-
" [They] have been clear: Plan fiduciaries
don't necessarily have to offer the cheapest
fund " -however, plan sponsors must
show procedural prudence. " Committees
should ask if a lower-cost share class of an
investment is available, " he says.
Plus, the prudence of an investment
can change, he notes. A plan committee
could have deemed a share class reasonable,
but if plan assets grow annually, they
may qualify the plan to obtain a cheaper
share class. If so, that is a failure to show
procedural prudence, he adds.
" This is why it's important to have a
competent adviser evaluate fees quarterly
to make sure they're competitive, " Keller
says. He also advises sponsors to, every
few years, issue a request for information
(RFI) or request for proposals (RFP) to see
what different providers offer.
Some plan sponsors have eliminated
revenue-sharing funds entirely, he
observes. Participants invested in such
funds could be paying more toward plan
administration- " why there's an argument
for per-participant pricing, " he says.
Whether assets go into a notional
unfunded account or a suspense account,
according to the IRS, they should be used
by year-end-with excess money forfeited
or allocated to participants, Keller says. " If
a plan isn't doing anything with the excess,
it creates a plan qualification issue. "
TIDBITS
Benefits for a Modern Workforce
Nearly three-quarters (73%) of workers
expect their financial management apps
and programs to use what they know about
them to suggest the most appropriate
resources, while 62% say, " Unless I'm getting
personalized recommendations, I feel like
financial education isn't very helpful " (68%
men vs. 54% women).
Source: Franklin Templeton's Voice of the American Worker Survey
$1,350,000,000,000
There are 24.3 million forgotten 401(k)
accounts in the U.S. with approximately $1.35
trillion of assets in them, representing 20% of
the $6.7 trillion total assets in 401(k) plans.
Source: Capitalize (a company that consolidates 401(k) accounts)
PLANSPONSOR.COM August - September 2021 11
How to allocate excess revenue
sharing fairly is a subject being debated,
says Keller. Should participants not
invested in revenue-sharing funds get the
benefit of either fee reductions or refunds?
He says any employer wrestling with how
to handle the funds should seek counsel.
Wetzel suggests that sponsors seek
ways to reduce revenue sharing. " And
document everything, " she stresses. " The
money often goes into ERISA accounts on
autopilot, but sponsors should document
that they've evaluated the account and
understand it. The DOL has asked [plan
sponsors] about ERISA accounts, and if
they don't know, they haven't done their
fiduciary duty. " -Rebecca Moore
http://www.PLANSPONSOR.COM

PLANSPONSOR - August/September 2021

Table of Contents for the Digital Edition of PLANSPONSOR - August/September 2021

To Ensure All Are Well
2021 PLANSPONSOR National Conference
Equipped for Anything?
The Security of Savings
Take a Load Off
PLANSPONSOR - August/September 2021 - Cover1
PLANSPONSOR - August/September 2021 - Cover2
PLANSPONSOR - August/September 2021 - 1
PLANSPONSOR - August/September 2021 - 2
PLANSPONSOR - August/September 2021 - 3
PLANSPONSOR - August/September 2021 - 4
PLANSPONSOR - August/September 2021 - 5
PLANSPONSOR - August/September 2021 - 6
PLANSPONSOR - August/September 2021 - 7
PLANSPONSOR - August/September 2021 - 8
PLANSPONSOR - August/September 2021 - 9
PLANSPONSOR - August/September 2021 - 10
PLANSPONSOR - August/September 2021 - 11
PLANSPONSOR - August/September 2021 - 12
PLANSPONSOR - August/September 2021 - 13
PLANSPONSOR - August/September 2021 - 14
PLANSPONSOR - August/September 2021 - 15
PLANSPONSOR - August/September 2021 - To Ensure All Are Well
PLANSPONSOR - August/September 2021 - 17
PLANSPONSOR - August/September 2021 - 18
PLANSPONSOR - August/September 2021 - 19
PLANSPONSOR - August/September 2021 - 2021 PLANSPONSOR National Conference
PLANSPONSOR - August/September 2021 - 21
PLANSPONSOR - August/September 2021 - 22
PLANSPONSOR - August/September 2021 - 23
PLANSPONSOR - August/September 2021 - 24
PLANSPONSOR - August/September 2021 - 25
PLANSPONSOR - August/September 2021 - 26
PLANSPONSOR - August/September 2021 - 27
PLANSPONSOR - August/September 2021 - 28
PLANSPONSOR - August/September 2021 - 29
PLANSPONSOR - August/September 2021 - Equipped for Anything?
PLANSPONSOR - August/September 2021 - 31
PLANSPONSOR - August/September 2021 - 32
PLANSPONSOR - August/September 2021 - 33
PLANSPONSOR - August/September 2021 - The Security of Savings
PLANSPONSOR - August/September 2021 - 35
PLANSPONSOR - August/September 2021 - Take a Load Off
PLANSPONSOR - August/September 2021 - 37
PLANSPONSOR - August/September 2021 - 38
PLANSPONSOR - August/September 2021 - 39
PLANSPONSOR - August/September 2021 - 40
PLANSPONSOR - August/September 2021 - Cover3
PLANSPONSOR - August/September 2021 - Cover4
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