Fiduciary Challenges for Evaluating Plan Fees: Investment Expenses and Revenue Sharing

The allocation of revenue sharing in 401(k) plans is a fiduciary decision. We explored that issue in detail in a recent white paper. We also looked at the concept of lowest “net” expense ratios. We concluded that there were fiduciary risk management benefits to “equalizing” revenue sharing (that is, returning it to the participants whose investments generated it) and for using the lowest net expense ratio for investments (i.e., the lowest net expense ratio after offsetting revenue sharing). A copy of that white paper is here.

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The views expressed in this article are the views of Fred Reish, and do not necessarily reflect the views of Faegre Drinker.