Retirement Plan Provider Shopping Questions

  1. What is the “Management Fee” also called “Wrap Fee”? ______________
  2. Is their “Management Fee” or “Wrap Fee” a gradual scale? If so clarify the tiers at which it is reduced ______________
  3. Initial set up costs? ______________
  4. Average Mutual Fund “Investment Costs” also called Average Mutual Fund Expense Ratio’s (i.e. 1.25)? Don't let them be vague here... an answer of "They Vary from 1.05 - 1.25" usually means they dont know. The last proposal we reviewed that said that, the average was 1.60. ______________
  5. Ask for a list of the funds that will be in your plan with the ticker symbols (i.e. RERAX) so you can verify the above average cost ______________
  6. Are there any per participant charges? (i.e. $5.00 per participant) ______________
  7. Ask what the base administration fee is (i.e. $1000) and the per person fee (i.e $35)? If there is no per participant fee than the TPA is being paid by assets, the question in how much? Ticker symbols help here ______________
  8. Ask if you are billed for administration on the amount of “Eligible participants”, “Active participants” or “Accounts w/ Balances”? BIG difference here sometimes. ______________ 
  9. Ask the Rep what he/she is compensated, both upfront & ongoing? (i.e. ask if there is an upfront “Finders fee” and how much i.e. 1% of plan assets, ongoing compensation is often called a "trail" and ranges from 25-100 basis points).
  10. Ask if they will be paid a referral fee from the plan they are recommending.  This should be disclosed and discussed openly and mutually agreed to. ______________  
  11. Basis points are equal to 1/100th of a percentage point so 50 basis points is equal to one half of 1% often denoted as bp or bps in proposals. Compensation is also almost always negotiable. If the rep is independent they can waive the upfront “finders fee”. ______________
  12. Ask the Rep if he/she will be handling the plan once it is moved or if you will get a “Whole team of dedicated professionals with a direct 800#" This just means your plan will be just another small fish in a big pond. ______________

 

We hope you find this list of questions helpful. Our Firm Specializes in comparing retirement plan providers based on fee's, performance, participation & services. We would be happy to help you compare your options and locate a long term solution to your Retirement Plan needs. Michelle Ogden & Company is a Fee-Only Advisory Firm. We do not accept any referral fees or commissions in an effort to eliminate any potential conflict of interest.  We do not offer any "Private Label" Retirement Plans because we feel there is no perfect fit for every plan we come across. Our firm is very cost conscience and we show all cost in dollar form as well as a percentage of plan assets. These costs include the hidden cost which include 12b-1 fees and Sub TA fees, also called revenue sharing (which is a hot topic right now) so plan sponsors can see an apples to apples comparison. We will even include information from our competitors proposals at the plan sponsors request. Our goal it to help plan sponsors reduce the stress and confusion that retirement plans can cause.  Please contact our office if you have any questions or would like us to email this list of questions (407) 349-9828.