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The Denver, Colorado-based provider of open architecture 401(k), profit sharing and self-directed IRA solutions, this week introduces the Personalized Expense Ratio (PER), which it described as “one of the retirement industry’s most precise all-in 401(k) plan cost calculations”. Available exclusively on the Lincoln Trust 401(k) platform, PER is intended for participants, plan sponsors, and advisors to see the actual cost of their plans without having to perform calculations themselves. According to the announcement, PER was designed to go beyond the Department of Labor’s (DOL’s) recent revisions to 408(b)(2) and 404(a)(5) reporting requirements, noting that neither regulation calls for the calculation and display of a plan’s or a participant’s total plan cost. “We didn’t think that the DOL regulations went far enough to provide a clear understanding of the true cost of a 401(k) plan,” says Tom Gonnella, senior vice president of Corporate Development for Lincoln Trust Company. “Our ‘Personalized Expense Ratio’ was designed to provide a more precise calculation by including investment expenses and aggregating fees from multiple service providers.” Lincoln Trust’s is one of the first platforms to combine actual fees paid with investment expenses in a single calculation, both for the individual participant and for the entire plan. Fee categories include: recordkeeping, advisor, TPA, and investment expense fees, as well as revenue sharing offsets. According to the announcement, PER also calculates and displays investment costs using a participant’s average daily balance rather than just period-end balance.
The Denver, Colorado-based provider of open architecture 401(k), profit sharing and self-directed IRA solutions, this week introduces the Personalized Expense Ratio (PER), which it described as “one of the retirement industry’s most precise all-in 401(k) plan cost calculations”.
Available exclusively on the Lincoln Trust 401(k) platform, PER is intended for participants, plan sponsors, and advisors to see the actual cost of their plans without having to perform calculations themselves. According to the announcement, PER was designed to go beyond the Department of Labor’s (DOL’s) recent revisions to 408(b)(2) and 404(a)(5) reporting requirements, noting that neither regulation calls for the calculation and display of a plan’s or a participant’s total plan cost.
“We didn’t think that the DOL regulations went far enough to provide a clear understanding of the true cost of a 401(k) plan,” says Tom Gonnella, senior vice president of Corporate Development for Lincoln Trust Company. “Our ‘Personalized Expense Ratio’ was designed to provide a more precise calculation by including investment expenses and aggregating fees from multiple service providers.”
Lincoln Trust’s is one of the first platforms to combine actual fees paid with investment expenses in a single calculation, both for the individual participant and for the entire plan. Fee categories include:
According to the announcement, PER also calculates and displays investment costs using a participant’s average daily balance rather than just period-end balance.