Fee Benchmarking Analysis

Our fee analysis provides a summary of both investment management and plan service fees for 401(k) and 403(b) plans, which typically include recordkeeping, administration, employee education, communication, and compliance services.

Why is fee benchmarking important?

The Employee Retirement Income Security Act of 1974 (ERISA) requires plan fiduciaries to ensure that all fees paid out of the retirement plan are reasonable in light of the services being rendered. Plan sponsors are not required to purchase services from the lowest bidder, but they must be able to demonstrate a deliberative process by which the reasonableness of applicable fees is regularly considered. Fee reasonableness is also a focus of the Department of Labor. Whether you are a small business or a large corporation, if you sponsor a retirement plan (401(k), 403(b), 457, the list goes on) it's important for you to understand the fees you are paying.

How does it work?

With a few inputs from your organization and your current provider, we will provide a benchmarking analysis of how the provider compares to the broader marketplace.

Our benchmarking report will compare the current fees for recordkeeping/administration to a relevant peer group and market data to determine whether there are opportunities to improve the fee structure of the plan. It is our estimation, the best opportunity to improve the cost profile of the plan is by benchmarking and negotiating the costs for recordkeeping/administration services.

During the fee benchmarking process, Multnomah Group will compare the fees you are currently paying for the same services used by a relevant peer group.

Our goals in providing the fee benchmarking analysis include:

• Assisting you in meeting the fee reasonableness best practice;
• Assisting you in understanding applicable plan service fees and how they are structured;
• Providing a discussion springboard for related topics such as the duty to prudently monitor the plan’s vendors; and
• Recommending potential next steps (e.g. re-negotiate service provider fees and service levels, launch a formal vendor search, etc.) depending on whether the current analysis indicates an opportunity for improvement.

Our process for helping determine the reasonableness of fees promotes the likelihood of the best possible outcomes for plan participants.

What is the result of the analysis?

At the conclusion of the process, Multnomah Group will provide an executive summary of the project that was completed, and specific recommendations for your consideration. The documentation is an important step in the governance process. We provide this summary so that you may document your diligence in meeting your fiduciary obligations.

There is no cost for this service.