Callan 2022 Report Forecasts a Continued Focus on Fees

Posted by PlanFees on Apr 13, 2022 1:53:59 PM

For more than 15 years, institutional investment consulting firm Callan has released an annual survey designed to uncover industry trends and help sponsors gauge their retirement plan offering relative to others. And while the organization offers numerous insights in its 2022 Defined Contribution Trends Survey, responses from more than 100 sponsors revealed that maintaining a sharp focus on fees will be the top priority for plans in the coming year.

The data suggests that nearly three in four sponsors are somewhat or very likely to conduct a fee study, and more than half reported a likelihood of seeking out lower cost investment vehicles. Approximately 40% said they were somewhat or very likely to renegotiate investment manager fees as well as recordkeeper fees and service agreements. Additionally, more than 9 in 10 defined contribution plans used a blend of active and passive investment funds, with the percentage of solely active strategies (19%) representing the lowest reported figure in the report’s history.

Almost every sponsor acknowledged having a QDIA and TDF in its lineup, with 81% of those being at least partially indexed. More than 90% used a TDF as the QDIA — the highest level since Callan began tracking this data point. Among investments offered, mutual funds (85%) and CITs (78%) remained the most popular.

Among other fee initiatives planned for this year, Callan reports that almost 30% of sponsors intend to reduce or eliminate the use of revenue sharing to pay for plan expenses and more than 60% plan to evaluate indirect compensation shared with recordkeepers. Moreover, 75% were very unlikely to change the way fees are paid (e.g., move from asset-based to hard-dollar-per-participant fee).

Scrutiny of fees continues to be top of mind for plan sponsors as the tidal surge of excessive 401(k) fee lawsuits shows no signs of receding. Retirement plan advisors need a comprehensive toolkit to help ensure fees are reasonable, even between the customary three- to five-year live-bid benchmark.

PlanFees offers an easy and affordable arrow for retirement plan advisors to add to their quiver. In just two minutes — and from a desktop or mobile device — advisors can easily and conveniently benchmark investment, recordkeeping, administrative and advisory fees relative to similarly sized plans and provide a quick, annual fee checkup to sponsors.

PlanFees leverages the power of a robust 60,000-plan database derived from direct data feeds from top recordkeepers and TPAs across the U.S. The intuitive, easy-to-use benchmarking platform enables retirement plan advisors to support greater fee transparency within their fiduciary role. With subscriptions starting at less than $50/month, PlanFees, can save you time and help your clients save money. 

Contact us here for a one-on-one demo and see for yourself what PlanFees can do for your professional practice.



Topics: Fees, Litigation