Maintaining Your Recordkeeper Relationship

As we previously discussed, a key element in Defining a Retirement Plan Standard of Excellence is plan governance. Plan fiduciaries should have a good understanding of the services being provided by all the service providers of the plan. As this article outlines, there are some important areas to consider in regard to the recordkeeper providing services to the plan as listed below:

1. How is the recordkeeper being compensated?

Compensation can be derived directly or indirectly.  Direct compensation means fees are charged and disclosed to the plan fiduciaries and participants. Indirect compensation involves sharing revenue from the mutual funds being utilized in the plan or revenue retained by proprietary investments being utilized in the plan. It is imperative that plan fiduciaries have documentation to show all compensation received by the recordkeeper and that such compensation is reasonable for the services being provided.

2. What are your recordkeeper fees?

In recent years, due to regulatory changes and competition, recordkeeping fees have been reduced for almost all plan sizes. As a result, plan sponsors and advisors should document and evaluate that the current fees are reasonable based on the plan size and contribution flows. As plan assets grow and participant demographics change, recordkeeping fees can be renegotiated to reflect these changes. In many cases, substantial reductions can be derived from the incumbent recordkeeper.

3. Do your goals and objectives meet your needs?

Periodically evaluate the plan sponsor’s goals and objectives to document that the services being provided by the current recordkeeper and other service providers meet the needs of the plan sponsor. Areas such as technology, education and enrollment support, and reporting capabilities should be considered. They are always there to answer any question that an associate may have and their website is very informative and easy to use.


Most recordkeepers have made significant enhancements to their platforms and services; however, many have not voluntarily moved their plans to the enhanced platforms. In many cases, it is up the advisor and plan sponsor to proactively contact the recordkeeper to obtain the most recent recordkeeping platform.