Assessing Retirement Plan Value - 7

1.68%
0.67%
1.27%
27%
2%
7%
%
0.36%
1.68%
1.61%
7%
1.23%
0.21%
1.17%
27%
1.2 %1.61%
1.68%
0.58%
0.87%
1.2 %27%
NUMBER
>MORE THAN A
2.27%0.83% 0.78%
1.27%
0.21%
1.68%
1.27%
0.21%
0.47%
1.68%
1.68% 0.68%
0.87%
1.68%
1.27%
0.58%
1.68%
0.27%
2.27%
07
0.230%8%.58%
0.58%
2.27%
0.27%
0.78%
0.78%
1.68%
0.58%
0.72%
0.78%
0.58%
1.27%
1.68%
1.27%
1.68%
1.27%
1.68%
1.68% 0.83%
1.68%
2.27%
2.13%
1.68%
0.32%
2.27%
2.13%
2.13%
Passive vs. Active Investment Management(Indexing)
NAVIGATING COST CONSIDERATIONS
WHAT DOES IT MEAN?
UNDERSTANDING
RETIREMENT PLAN COSTS
Another factor that may impact the costs associated with a
retirement plan is the use of actively versus passively managed
investment options. Investment options that are actively
managed generally have a higher expense ratio because the
investment managers actively research, monitor and trade the
holdings of those investment options as they seek a higher
investment return.
REVIEWING PLAN SERVICES
NAVIGATING
COST CONSIDERATIONS
EVALUATING
REASONABLENESS
Actively Managed
ADDRESSING
PARTICIPANT QUESTIONS
GLOSSARY OF TERMS
Service Provider Fee
Revenue Sharing Paid to Service Provider
Fees Paid by Plan Sponsor, Plan or Participants
Total Investment Expense
Total Cost (Fees paid by Plan Sponsor, Plan or Participants
plus Total Investment Expense)
This example is for illustrative purposes only.
MAIN
TOOLS & RESOURCES
> BACK TO HOME
TOTAL COST
COLLECTION
METHOD
PASSIVE VS.ACTIVE
FIXED RATE FEES
ERISA BUDGET
MORE THAN A NUMBER • NAVIGATING COST CONSIDERATIONS | 7
0.65%
0.50%
0.15%
0.90%
1.05%
Passively Managed
0.65%
0.15%
0.50%
0.35%
0.85%
Passively managed, or index, investment options, generally have
a lower total investment expense as they typically require less
research, monitoring and trading activity. The management of
index investment options is more “passive” than the management
of non-index investment options, because an index manager is
tracking a relatively fixed index of securities. This usually translates
into less trading within the investment option’s portfolio and
lower fees than more actively managed investment options.
For example, a retirement plan that offers some or all index
investment options as shown below has the potential for lower
total investment expense. This may translate into a lower total cost
to the plan, but may impact a participant’s ability to earn a higher
return than with actively managed investment options.
Another consideration is that index investment options
generally have less revenue sharing available to help
reduce administrative and recordkeeping costs associated
with the service provider therefore resulting in more fees
collected from the plan sponsor, plan, or participants.
0.27%
RETIREMENT PLAN VALUE
Assessing Retirement Plan Value

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