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The following is an excerpt from the publication "Understanding Retirement Plan Fees And Expenses," published by the U.S. Department of Labor Employee Benefits Security Administration:

The Department of Labor is continuing to focus on plan fees and expenses. As a result, if your plan is investigated by the DOL, they will look at the expenses being paid by your plan, both directly and through investments. Since Fiduciaries have a duty to know the fees being paid and to understand both the amount of those fees and the services being received for those fees, ignorance and/or lack of effort are tantamount to breach of Fiduciary Duty.

Although it may seem to to a simple thing to know what your plan fee and expenses are, our experience has shown that upto 85% of plan sponsors routinely do not know the total costs of their plans. This is not entirely their fault. Many providers have made it nearly impossible to determine the true costs of the plans due to complicated fee structures, hidden costs, revenue sharing relationships, sub advisors fees etc. But ignorance is no excuse, and it has its consequences!

Your plan participants can easily cause the DOL to audit your plan. If more than one participant of a plan complains to the DOL about the costs of the plan the DOL automatically categorizes the complaints as a multiple complaint and it goes to the top of the stack! The participant can simply request what the total fees are from your benefit coordinator and if they are not able to disclose the total actual fees to the participant, there is justification for the audit! Audits costs time and a lot of money!

Blue Water Capital Management, L.L.C. can help you avoid this expensive problem because our fees are always well disclosed and documented. You will have no problem disclosing the costs of the plan to your participants.

If you are being audited by the DOL, Blue Water Capital Management, L.L.C. can help document your processes, identify your costs, and if necessary offer plan comparisons that will help you comply with their requests. Call us at (858) 547-1810 to discuss our DOL audit services.
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