This is one of the reasons we benchmark fees and monitor quarterly.
“The suit claims that, for every year between 2013 and 2017 (the same time period in the Adidas case), the administrative fees charged to plan participants was “greater than 90 percent of its comparator fees when fees are calculated as cost per participant or when fees are calculated as a percent of total assets,” and that “the total difference from 2013 to 2017 between TriHealth’s fees and the average of its comparators based on total number of participants is $7,001,443.” Moreover, they claim that the total difference from 2013 to 2017 between TriHealth’s fees and the average of its comparators based on plan asset size is $7,210,002, and that the TriHealth plan charged 401(k) fees of $328 per person in 2017, when similarly sized plans – those with between $250 million and $500 million in assets – charged an average of only $166 per person that year.
At least part of that differential was attributed to the choice of actively managed funds. The plaintiffs note that, “by selecting and retaining the Plan’s excessive cost investments while failing to adequately investigate the use of superior, lower-cost mutual funds from other fund companies that were readily available to the Plan or foregoing those alternatives without any prudent reason for doing so, TriHealth caused Plan participants to lose millions of dollars of their retirement savings through excessive fees.”
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