Benchmarking Work Retirement Plans is Key

Daniel V. Estenson CFP®, AIF® | Posted: July 28, 2018

In addition to offering wealth management services to individual investors, Bernicke Wealth Management also offers work retirement plan services to businesses.

DOL Fiduciary Rule

In the spring of 2016, the Department of Labor (DOL) issued new regulations for work retirement plans. The government agency wanted to ensure that plan sponsors were choosing retirement plans that are in their participants’ best interest.

For example, if your company or the company you work for isn’t benchmarking the plan fees and investment costs inside your work retirement plan periodically, or they aren’t comparing and shopping around to make sure the fees are reasonable, the plan may not meet the new “fiduciary standard” set with the DOL rule change. The basic definition of the fiduciary standard is simply doing what a prudent investor would do, and to work in the best interest of the plan’s participants.

How does this affect participants?

In our research, we’ve seen a number of companies paying what we believe to be higher-than-necessary fees for their work retirement plan administration, or the plan may not be using the lowest cost class of funds in the fund lineup. Higher fees means more of the participant contributions may be going to fees than are necessary.

We have seen plans that haven’t been reviewed in quite a while, and there may be an opportunity to lower the plan costs or provide additional employee education.

What can employers do?

We believe it’s important for employers to benchmark their existing plan to see how they stack up to their peers. At a minimum, the benchmarking process can help fulfill some of the fiduciary responsibilities for the plan sponsor. We can provide a no obligation second opinion for employers who are interested.

If you or someone you know may benefit from benchmarking their work retirement plan, please let us know and we can reach out to them or their employer.

About the author

Daniel V. Estenson CFP®, AIF®

Dan is a Wealth Manager who aims to help clients reach their lifelong goals through retirement income planning, tax minimization strategies, and wealth planning. Dan also helps develop college education funding strategies for our clients, in an effort to reduce the increasing costs of post-secondary education. He lives in Chippewa Falls with his wife, Nicole, and three children. In his free time, Dan enjoys traveling, the outdoors, and spending time with his family.

Certifications, Licenses, and Registrations

  • Registered Representative with Triad Advisors, LLC
  • CERTIFIED FINANCIAL PLANNER™ professional
  • Accident, Life, Health, and Variable Life/Variable Annuity Insurance Licenses
  • Accredited Investment Fiduciary®

Education and Training

  • Series 7, 66
  • Bachelor's Degree - Accounting; University of Wisconsin - Eau Claire
  • College for Financial Planning graduate

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