3 Retirement Plan Costs That You Should Understand

Plan Selection

What does your retirement plan cost? Are your expenses too high? How do you even know?

The average participant will say that their retirement plan costs nothing. As a plan administrator, you know that’s not right. But do you wonder what the expenses are? And what they are for?

Good news—you have a choice in the amount that you and your participants pay. And the amount you pay impacts your plan’s returns. That is why it is so important to understand the basic components and the cost of your plan.

There are 3 basic retirement plan costs that you should understand:

1. Third Party Administration
The TPA team works with the plan sponsor to ensure ongoing accuracy of the plan, to minimize the time the plan sponsor spends on plan oversight, to meet service and compliance deadlines, and to coordinate with all parties. The TPA team makes sure that plan and participant records are accurate and compliant and that they follow the legal Plan Document. They also consult with the Plan Sponsor about the plan.

2. Recordkeeping
The Recordkeeping team manages and tracks all participants in a retirement plan, the investments they own, and how their money is coming in or going out. The recordkeeper makes sure that your reporting, enrollment, and distributions, are done accurately and done on a timely basis. Using Recordkeeping service decreases the time plan sponsors spend on administrative work and allows them to focus on their fiduciary responsibilities for the plan.

3. The Investment Advisor
The Advisory team oversees the investment menus of the retirement plans. Advisory works with the plan to develop an investment policy statement, and then, helps create, monitor, and update the investment menu on an ongoing basis.

So what percentage of your plan’s assets are you paying each year?

And are there any additional costs? Are you paying too much and what can you do?

Unlike the Christmas present that comes from the store with a no return policy, here you can make a change. It can be to renegotiate your costs or even change service providers. If you’re going to make the change, look for a well-rounded team who understand and service faith-based organizations.

How can you know if you have a good retirement plan? Take a FREE 2-minute assessment online and discover if your existing plan meets your unique ministry needs.

Are you a Ministry Leader?

We have some great ways to promote Biblical Financial Stewardship to your staff.

To explore this, connect with us.