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    Are you liable for retirement plan malpractice?


    These fees can start out at a reasonable level, but over time, as the plan assets grow, the fees may become excessive, thus increasing liability exposure. Fixed per-participant fees help to ensure that costs do not become exorbitant as the plan’s assets grow and the plan sponsor’s liability exposure is reduced. 


     Get a second opinion from a fee-only registered investment adviser (RIA) who specializes in retirement plans. An RIA is a fiduciary and must put his or her client’s best interests before their own. Because they cannot participate in revenue sharing, they should tend to recommend investments and funds that have lower expense ratios. 

    Benchmarking your plan with what is currently available and possible is the best way to determine if your plan is paying excessive fees. Fees are relative and you can only know if you are overpaying if you shop around. 


     Maintain the required ERISA Fidelity Bond of no less than 10% of the plan’s assets as of the beginning of the year. ERISA’s minimum required bond is $1,000 and the maximum is set at $500,000. A fidelity bond will help to insure the plan’s assets against fraud or dishonesty on the part of anyone handling the plan’s assets. By not having this fidelity bond, it could signal to the Department of Labor (DOL) and others that fiduciary duties are not being met. 


     Obtain fiduciary liability insurance. Insurance goes beyond the fidelity bond and covers plan sponsors and their legal expenses  if a breach of fiduciary duty occurs.


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