Understanding Fees and Plan Costs: A Trustee’s Spring Review Checklist

Spring is an ideal time for retirement plan trustees to revisit key responsibilities, including reviewing plan fees and costs. A thoughtful spring review helps support fiduciary obligations, promotes transparency, and ensures the retirement plan continues to serve participants effectively.

Understanding how fees are structured and what services they support is a core part of prudent oversight and long-term 401(k) plan management. Regular reviews can help trustees remain informed, confident, and aligned with their responsibilities throughout the year.

Why Fee Reviews Matter

Plan fees directly impact participant outcomes over time. Even small differences in costs can affect long-term retirement savings. Fiduciary services and financial planning firms consistently emphasize that regular fee reviews are not a one-time task, but an ongoing part of responsible plan governance.

Trustees who engage in periodic reviews demonstrate a continued commitment to acting in the best interest of participants while supporting the sustainability and effectiveness of the plan.

Key Fees Trustees Should Review

A comprehensive spring review often includes several cost categories tied to plan operation and oversight:

• Investment-related fees associated with retirement plan investments and investment management

• Recordkeeping and administrative fees connected to day-to-day plan operations and reporting

• Advisory or consulting fees for financial advisor or investment advisor services

• Additional service fees related to compliance, education, or participant support

Understanding how these fees are paid, whether directly by participants, covered by the employer, or paid through plan assets, helps support informed decision making.

Evaluating Value, Not Just Cost

A trustee review should focus on value as well as price. Lower fees do not automatically mean better outcomes. Trustees are encouraged to consider whether services provided align with plan needs, participant demographics, and long-term objectives.

This evaluation often includes reviewing the level of fiduciary support, investment oversight, and administrative assistance provided by plan partners such as the record keeper, third party administrator, and advisor team. Financial risk assessment and risk management considerations may also play a role, particularly when evaluating investment oversight and provider support.

Benchmarking and Documentation

Benchmarking plan fees against similar plans is a common fiduciary practice. Comparing costs can help trustees assess reasonableness while recognizing that services, plan design, and complexity may vary from one plan to another.

It is equally important to document the review process. Clear records help support fiduciary accountability and provide evidence of a consistent, thoughtful approach to oversight. Documentation supports continuity, especially as trustee roles or committee membership evolve over time.

Coordination With Broader Planning

Fee reviews often connect with broader financial planning services, including retirement planning service discussions, investment advisory firm evaluations, and financial planning for businesses. For some plans, this may also involve reviewing the role of a 3(38)-investment manager or other delegated fiduciary relationships.

In plans supported by 3(16) fiduciary services, spring reviews may also align with administrative oversight and participant communication initiatives. Coordinating these efforts helps trustees streamline responsibilities and maintain a clear governance structure.

A Seasonal Reset That Supports Long Term Success

A trustee’s spring review of fees and plan costs is not about immediate changes. It is about maintaining clarity, accountability, and alignment with fiduciary responsibilities.

By understanding fees, evaluating value, and documenting decisions, trustees can help support plan sustainability and participant confidence throughout the year.

The Alliance Team

(860) 777-4015

(860) RPS-401K

info@alliancerps.com

Material is for informational purposes only and does not constitute an offer to sell or a solicitation to purchase any products or services. We do not guarantee any minimum level of investment performance or the success of any portfolio or investment strategy. All investments involve risk (the amount of which may vary significantly), and investment recommendations will not always be profitable. Keep in mind that current and historical facts may not be indicative of future results.  Additional information, including management fees and expenses, is provided on our Form ADV Part 2, available upon request or at the SEC’s Investment Advisor Public Disclosure website, https://adviserinfo.sec.gov/firm/summary/123807.