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  • Writer's pictureSam Fiduciary

What Recordkeeper Propriety Date Funds Are and Why You Should Keep Them Out of Your Company’s Emp...


What Recordkeeper Propriety Date Funds Are and Why You Should Keep Them Out of Your Company’s Employee Retirement Plan
What Recordkeeper Propriety Date Funds Are and Why You Should Keep Them Out of Your Company’s Employee Retirement Plan


What Recordkeeper Propriety Date Funds Are and Why You Should Keep Them Out of Your Company’s Employee Retirement Plan


As a fiduciary for your company’s employee retirement plan, you must fulfill your obligation and only pay necessary plan expenses. Plan expenses will vary depending on which investment allocations you choose and the service provider hosting the plan.


Contrary to what you might believe, service providers do not consider your best interest when providing you with a menu of investment allocations. While they could offer you well-performing mutual funds from any sponsor, service providers typically earn higher margins on the backend with recordkeeper propriety date funds. These proprietary date funds are the same mutual funds that you would be able to choose from most generic sponsors, but with the service provider’s name stamped on them.


They will encourage you to invest in these specific funds over generic funds as if it were convenient. But your service provider won’t tell you that your plan return gets hosed when you allocate to these proprietary date funds due to excessive fund expenses.


Alternative mutual funds from generic sponsors often perform similarly to these proprietary date funds without excessive fees. There is no need to choose these funds for your plan allocations when you could get a similar return in other less expensive funds.


If you work with a Certified Plan Fiduciary Advisor, they can evaluate the investment allocations offered by your plan service provider and help you avoid being hosed by excessive fees.


If you are a fiduciary for your employee retirement plan and you are concerned about whether you could be paying unnecessary expenses, I can help. I specialize in reviewing existing retirement plans and cutting the fat where necessary. I can also change your investment allocations to avoid unnecessary fund expenses and add 99% value to existing retirement plans. Contact me today if you’re ready to get the most value from your company’s retirement plan and fulfill your fiduciary obligation of only paying necessary expenses.

 

If you are a fiduciary for your company’s employee retirement plan and are concerned about your current investment options, I can help. My specialty is reviewing and adding 99% value to employee retirement plans. Contact me today if you’re ready to get the most value from your company’s retirement plan and protect yourself from personal liability as a fiduciary.


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