ERISA requires that fiduciaries carry out their responsibilities prudently and for the exclusive benefit of plan participants and their beneficiaries. Included in this mandate is the duty to ensure that all plan costs are accounted for and reasonable in light of services rendered. Over the years, retirement plans' pricing and service structure have varied greatly. Direct fees have often been replaced by an embedded, asset-based fee structure. When allocated in this manner, fees often climb proportionally as plan assets grow and can rapidly surpass the reasonable cost for the services provided. Today, many plan participants unknowingly shoulder the escalating expenses of recordkeeping and other plan expenses in the form of 12(b)(1) fees and other soft-dollar revenue.
Indirect fees can obscure the retirement plan's true cost and make it difficult for many sponsors to accurately identify their plan's expenses. Without full comprehension of plan costs, it is difficult for fiduciaries to meet their obligation to monitor their provider relationships and ensure fair value.
To quickly and efficiently meet the needs of fiduciaries, North Pier has designed our Reasonableness of Fees Appraisal. This service begins with an assessment of the principal details of your retirement plan. We then craft a 'Request for Bid' document, which is an abridged version of an RFP, only reflecting key criteria relevant to pricing. North Pier will then disseminate the 'Request for Bid' to providers with similar service models and organizational structures to ensure accurate comparisons.
This process allows us to efficiently assess your plan's costs relative to the services provided amongst comparable providers. Our clients of this service take comfort in knowing that they are receiving unbiased advice due to our offer to recuse ourselves from consideration for competing advisory services for a period of three years.