PLANSPONSOR - June/July 2019 - 4

Issue Intro
Fee Importance
T
here has been continued industry emphasis
on plan and investment fees, with many insiders
attributing this to the start of 408(b)2 and
404(a)(5) disclosures and then the subsequent waves
of litigation: Participants continue to sue plan sponsors
for excessive fees and self-dealing-court cases
we often write about in Rules & Regulations (page 8).
These cases, and disclosure requirements, have
influenced the way plan sponsors handle fees across
all areas: plan administration, adviser services and
investment. As plan sponsors know, their fees must
be reasonable, which doesn't always mean " lowest " -
despite the insinuations of many plaintiffs' lawyers.
Plan sponsors do have to make conscious decisions about their fees and fee policies.
Should they charge participants a certain dollar amount per person or a certain
percentage of the fee/s? Should they pay certain fees with no charge to participants?
These are just a few tactics plan sponsors can employ that are discussed in our cover
story " Fee Variations " (page 16). Also see Industry Analysis (page 7), where, this issue,
we use proprietary data to examine whether revenue sharing is really on the decline.
This focus on fees has also led to lower recordkeeping fees for sponsors-and
lower revenue for plan sponsors' requisite partner, the recordkeeper. As recordkeepers
develop alternative means to generate income-including services for
participants-plan committees should be aware of what this means for their fiduciary
duties. Summer Conley and Michael Rosenbaum fill us in on yet one more
concern that plan committees, their legal counsel and advisers need to add to their
watchlists in " Recordkeeper Add-Ons " (page 50).
Benchmarking your plans fees is often part of the decision to go with one fee
structure over another. " Consider This " (page 20), which precedes PLANSPONSOR's
much anticipated 2019 Recordkeeping Survey (page 24), indicates five hot-button
issues plan sponsors should address when writing a request for proposals (RFP).
Sources agree that, at this juncture, fiduciaries should apply the same level of care
to plan data as they do to fees and plan assets. In choosing a recordkeeper, the
plan sponsor and adviser should focus on the data security measures prospective
recordkeepers have, or should have, in place. Detailed questioning on data security
is now a must.
In addition, this issue covers several investment strategies for sponsors to
consider. In Investment Focus, John Keefe delves into the subject of hiring and
firing fund managers (page 42), and he addresses the topic of environmental,
social and governance (ESG) in DB Focus (page 44). John Manganaro, in his piece
for PS Coach, discusses choosing an NQDC investment menu (page 48).
And Rebecca Moore focuses on how, in the decade since the 403(b) regulations
became final, providers have changed service models and expanded product offerings
to modernize 403(b) retirement plans. This has, experts say, resulted in the
better plan governance the IRS intended. See " Adapting to the 403(b) " (page 46).
Which articles hit home for you? We want your feedback. Write to me, or any
of our edit staff, at editors@strategic-i.com. -Judy Faust Hartnett, Managing Editor
4 PLANSPONSOR.com June - July 2019
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