Real Time Fee Monitoring

BrightScope was recently at a conference held by Charlie Epstein, the 401k Coach, in Tabernash Colorado.  One of our fellow speakers at the conference was ERISA attorney Marcia Wagner. Marcia is a well-respected ERISA attorney who has a great understanding of where the 401k marketplace is going and what prudent fiduciaries need to do to protect themselves. In her presentation Marcia reviewed the current status of indirect fee litigation, the Department of Labor’s initiatives on fee disclosure as well as a list of “Best Practices Evolving from Fee Litigation.”  One of the bullet points on her list really caught our attention: “Continuously monitor whether fees are reasonable.”

For many in the defined contribution world the concept of continuous monitoring might be a revolutionary idea, but unbeknownst to many the technology and tools to accomplish real-time, independent monitoring of plan fees and plan performance already exist. One example is BrightScope’s Plan Management Dashboard product combined with full recordkeeper integration.

  • The Dashboard gives a plan sponsor and their advisors the ability to track the total fees of the plan based on the plan’s current investment menu and administrative costs.  The Dashboard places the fees in the same buckets used in the HR2989 legislation:

total-plan-cost-in-hr2989-categories

  • The Dashboard shows a plan sponsor and their advisors how the plan’s fees stack up to other plans.  The plan can be compared against all plans in the BrightScope database, same size peers in assets and same size peers in participants by clicking the radio buttons:

total-plan-cost-criteria

  • The Dashboard also allows a plan sponsor to compare their plan to a custom list of competitor plans that they select:

total-plan-cost-peer-comparison

When this data is fed directly from the recordkeeping system, it is truly a continuous monitoring and benchmarking solution for plan fees.

When browsing the BrightScope website be sure to keep an eye out for the Real Time Data badge which indicates that a plan’s BrightScope Rating page and Plan Management Dashboard is being fed with data directly from a plan’s recordkeeping system:

Real Time Data Icon

In addition, recordkeepers and TPA’s that are committed to transparency and have provided full data compatability with BrightScope will have the following badge next to their name in the service provider section of a plan page:

Real Time Data Badge Small

If you are a recordkeeper interested in integration with BrightScope please contact us at data@brightscope.com.  If you are an advisor or plan sponsor looking to get access to the dashboard please contact us at dashboard@brightscope.com.  You can read more about the Dashboard here.

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