News

As the confetti settles and the calendar flips to 2025, it’s the perfect time to set resolutions that truly make an impact — both in your personal life and your retirement plan practice. One resolution that should be on every advisor’s list is to benchmark better. Benchmarking is — or should be — more than just a compliance checkbox; it can be a powerful tool for attracting new prospects, retaining clients and delivering greater value for plan sponsors and participants. 

In an era where innovation drives every facet of business operations, even the most forward-thinking companies can face challenges when it comes to retirement plan fee diligence. NVIDIA, renowned for its groundbreaking advancements in artificial intelligence, recently settled a lawsuit alleging excessive fees in its 401(k) plan. The case underscores a crucial takeaway for plan sponsors: Actionable fee intelligence is an essential part of the fiduciary prudence necessary in today’s retirement plan landscape.

Whether it’s a streaming subscription you forgot to cancel or a coupon you let expire before you could use it, nobody likes to find out they could’ve paid less than they did. And while a forgotten Netflix account might rack up a few extra dollars each month, excessive retirement plan fees can put participants — and the plan sponsor — in jeopardy. One recent study shows that a staggering 80% of plans are paying higher fees than they should. 

According to an ERISA lawsuit recently filed against Nordstrom, it’s not just the handbags that come with a hefty price tag — the suit alleges their retirement plan fees were excessive too. Plaintiffs say the luxury retailer overcharged employees for administrative services and misused the forfeiture funds of former workers as well. While the suit is still pending, some of the details have already hit the runway. 

Plaintiffs in a recent ERISA lawsuit against health insurance giant Humana didn’t get the diagnosis they hoped for. Initially filed in 2021, the suit went through multiple attempts at prior dismissal that, early on, looked promising for the plaintiffs. But in May of 2024, a district court judge dismissed the case, citing a lack of sufficient evidence, and declared Humana’s plan fit. Key to the company’s clean bill of health was its frequent benchmarking and solicitation of an RFP, underscoring the importance of robust documentation and proactive measures when it comes to maintaining reasonable fees.

After several bumps in the road, a class action ERISA suit against the auto parts supplier Magna International has finally reached a settlement. The suit, which alleges that approximately 20,000 workers were adversely affected by underperforming funds and high fees, took the long road in reaching its destination. While details of the settlement are still pending, the plan in question had more than $1.6 billion in assets under management at the time of filing. 

Broaching the topic of fees with plan sponsors is a data-fueled art. Transparent fee conversations can help build trust and contribute to a plan’s long-term success. As an advisor, your ability to broach fee discussions effectively — and with finesse — can elevate your practice and help you win new business. 

In yet another ERISA-related case, aerospace and defense technology firm L3Harris found itself in the crosshairs of an excessive fee lawsuit. Plaintiffs alleged that the retirement plan’s massive size should have given them the leverage to negotiate more competitive recordkeeping and administrative options, as well as lower fees. The company recently arrived at a settlement, though not before enduring a two-year legal battle. 

On Valentine’s Day, it’s customary to express caring with a gift of chocolate and roses. But you may get some funny looks if you try that with plan sponsors. When demonstrating your commitment to clients, what you really want to offer them isn’t flowers or foil-wrapped bon bons — it’s fee transparency. That’s because trust is the cornerstone of most lasting relationships, even those steeped in fiduciary responsibility.

Ensuring that PlanFees are reasonable is one of the most important responsibilities as a retirement plan advisor. Excessive fees can negatively impact retirement savings, impacting plan performance and possibly resulting in legal issues. Having reliable tools at your fingertips is essential for executing your fiduciary duty in an efficient and effective manner. We will go over how advisors can be supported by Prism Total Fees and RFP Express to perform fast fee audits, identify the underlying causes of excessive fees, and implement practical measures to control and openly discuss fees.