Vendor Fee Analysis
Plan sponsors who are confused, concerned or uncertain about plan charges contract with us to evaluate current costs. All retirement plan fiduciaries have a duty to monitor provider performance. Simply issuing an RFP and selecting a vendor isn’t sufficient. Ensuring that actual payments are limited to what was promised and that actual services provided are what was promised is necessary. Participants expect this and regulators demand it. In today’s environment, organizations of all sizes need to continually scrutinize plan costs. We help you determine how much you actually pay for plan administration and investments by analyzing original vendor contracts, then compare actual charges to those indicated in the contract.
ERISA fiduciaries have a duty to monitor plan providers. An objective fee analysis can uncover undisclosed revenue sharing arrangements or contractual violations. Armed with this information, a plan fiduciary can demand a reconciliation and, in some cases, a refund of overpayments. Your plan is primarily designed to provide participants the opportunity to build replacement income for retirement. Ensuring that actual plan costs are reasonable can be a pivotal component in achieving this goal.
We evaluate provider contract terms for reasonableness and then analyze all aspects of actual expenses to ensure they comply with contractual terms and compare client plan expenses to established public benchmarks.
Essential Components of Vendor Fee Analysis
Contract Analysis:
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Services covered
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Contract rates
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Specific charges for extra services
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Terms and conditions
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Contract termination charges
Performance vs. Contract:
- Analyze actual direct costs
- Identify vendor revenue sharing agreements (disclosed and undisclosed)
- Compare total costs to contract terms
Benchmarking:
- Compare contracted services to established benchmarks
- Compare client costs to established benchmarks
