Most people tend to agree that the increased fee disclosure for defined benefit and defined contribution plans required under Employee Retirement Income Security Act (ERISA) 408(b)(2) is a good thing for plan participants. With retirement plan providers required to disclose the fees associated with operating retirement plans, participants can now see how much in fees they are truly paying.
One concern has arisen regarding some providers lowering their fees and adjusting their services accordingly. This potential trend leads to an interesting dilemma: as plans and service providers compete for lower costs, will the level of service provided also be lower? With plan features and investment options being more complex, a potential move towards lower-cost plans could be the result, and just when more service, not less service is needed.
Now that fees associated with retirement plans are being disclosed, fiduciaries might feel more pressure than ever to ensure that plans are getting the best possible service for the best or most reasonable price.
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