What does your retirement plan cost? Are your expenses too high? How do you even know?
The average participant will say that their retirement plan costs nothing. As a plan administrator, you know that’s not right. But do you wonder what the expenses are? And what they are for?
Good news—you have a choice in the amount that you and your participants pay. And the amount you pay impacts your plan’s returns. That is why it is so important to understand the basic components and the cost of your plan.
There are 3 basic plan costs that you should understand.
1. Third Party Administration.
A third party administrator keeps your plan legal and compliant and consults with you about a number of plan issues.
2. Recordkeeping.
The recordkeeper makes sure that your reporting, enrollment, and distributions, are done accurately and done on a timely basis.
3. The Investment Advisor.
The advisor shapes your investment policy statement with you, assists in constructing your investment menu and helps your participants understand investing.
So what percentage of your plan’s assets are you paying each year?
And are there any additional costs? Are you paying too much and what can you do? Unlike the Christmas present that comes from the store with a no return policy, here you can make an change. It can be to renegotiate your costs or even change service providers. If you’re going to make the change, look for providers who understand and service faith-based organizations.