Thank you for choosing Vestwell as your plan provider. As a company, we aim to be completely transparent about the fees that we charge and endeavor to present those fees in a clear, explainable way. This guide is designed to help Plan Sponsors navigate those fees (participants in the plan should go here instead) and answer frequently asked questions.
What are Vestwell's Fees?
Vestwell & our service providers may charge setup & recurring fees to your Plan according to a fee schedule. The fee schedule covers specific services to your plan, and those services are detailed in Appendix B of the Plan Service Agreement that you signed with Vestwell. Vestwell’s fee schedule can include up to four components, all of which are calculated and billed to your Plan on a quarterly basis:
- Setup Fee: The initial setup fee (if one is due) is billed at the end of the first quarter after your plan goes live on Vestwell's platform.
- Administration Fee: These fees are charged quarterly and are pro-rated to the month in which your plan became effective. For example, a plan going live in February would be charged for two months at the end of March, followed by a full three months at the end of June, and so on.
- Per Participant Fee: These fees are based on the number of participants with a balance in the Plan at the end of each quarter. Similar to the Plan’s administration fee, these fees are pro-rated, with charges starting the month in which your plan became effective.
- Assets Under Management (AUM) Fee: Any AUM charges are calculated based on the assets in the plan at the end of each quarter. Similar to the other fees listed, these fees are pro-rated, with charges starting the month in which your plan became effective.
In addition to the components above, Vestwell may charge fees for specific services associated with the plan. Our service team always strives to let you know if there will be additional charges incurred, and what those charges will be, for any services that you request.
Certain fees charged by Vestwell must be covered by you as the Plan Sponsor. However, many fees can also be paid directly from the assets of the plan. See below for more information (“Do I pay Vestwell’s fees, or do you charge my Plan directly?”).
What about other service providers to my Plan, such as my Financial Advisor?
Your Plan may also be associated with other service providers, such as a Financial Advisor or Investment Manager. These providers charge fees according to their own agreements with you as the Plan Sponsor, and Vestwell is not responsible for setting these fees. However, fees from these third-party providers may be collected by Vestwell on the same schedule as Vestwell’s own fees, for your convenience. Fees owed to these third-party providers are listed separately on quarterly participant statements (if paid by Plan participants) or on the sponsor invoice (if paid by you, the Plan Sponsor). Once collected, Vestwell then passes these fees directly to the relevant service provider.
How do I find the fees that my Plan is being charged?
For a comprehensive list of all the fees that you may be charged by Vestwell, log into the Vestwell portal to find your Plan’s fee disclosure (known as the Plan’s 408(b)(2) document). This can be found by navigating to “My Plan”, then “Notices & Forms”. From there you can download your fee disclosure document called 408(b)(2).
Your Plan’s fee disclosure includes a detailed description of Vestwell and our service providers that are associated with your Plan. The fee disclosure also includes Vestwell’s custom fee schedule for your specific Plan, as well as any additional fees that may be charged for specific services.
If available, Vestwell will also update this fee disclosure with the estimated fee schedule from any other service provider to your plan (such as an investment manager or financial advisor). However, in certain cases, you may still need to refer directly to the agreement in place with those providers as Vestwell may not be able to include an accurate estimate of fees due to other service providers associated with your Plan.
In your portal, you may see a second fee disclosure document labeled 404(a)(5). This document describes the fees paid by participants in your Plan and is available to all participants. Generally, the 404(a)(5) document will look very similar to your Plan’s 408(b)(2) but excludes certain information that is relevant to you as a Plan sponsor but less relevant to participants in the Plan.
How do I know if your fees are reasonable?
As a company, Vestwell is committed to leveraging technology to create a better, cost-effective experience for retirement plans. As part of that commitment, we regularly benchmark our fee schedules against the industry to ensure that our fees are competitive and that our clients are receiving strong value for money. As an example, see below for details of a typical Vestwell plan vs. the industry average:
Notes: Industry Average is defined as the overall cost per participant in a plan with $5MM in assets & 50 participants in 2020, as calculated by the 401k Averages Book. We have assumed that 0.50% of AUM is ultimately paid to the Financial Advisor on the plan, and is typically collected through investment costs or revenue sharing.
This is compared to pricing for a comparable Vestwell Workplace plan, with $5MM in assets & 50 participants, including a 0.50% AUM charge for Financial Advisory services, a 0.10% AUM charge for Investment Management services, and a 0.07% average fund expense.
Note that pricing may vary depending on a Plan’s chosen features, services & investment options.
Do I pay Vestwell's fees, or do you charge my Plan directly?
Vestwell’s initial setup and any recurring administration fees must be paid by you, the Plan Sponsor. However, other fees (per participant fees, AUM fees, and any financial advisory fees) are, by default, paid by the Plan. This means that, on a quarterly basis, Vestwell will allocate these fees to the accounts of individual Plan participants.
In certain cases, you may have the option to cover these fees on behalf of Plan participants in your role as the Plan Sponsor. If this applies to your Plan, Vestwell will request your choices for the source of payment for these fees during your onboarding process. If you do not explicitly choose, we deduct all participant, AUM, and advisory fees from the Plan (the default choice) at the end of each quarter.
For any fees paid by the Plan, Vestwell allocates AUM fees pro-rata across all participants with a balance and allocates per-participant fees per capita across all participants with a balance. Vestwell automatically deducts these fees from the Plan at the end of each quarter. These charges are displayed in the participants’ quarterly benefit statements.
How do I pay my portion of the fees?
Vestwell will send you, the Plan Sponsor (or your billing contact) an invoice shortly after the end of each quarter detailing the quarterly charges that have been allocated to you as the Plan Sponsor.
Vestwell automatically deducts fees owed by the Plan Sponsor from the Sponsor’s primary bank account within 15-30 days of the quarter’s end. Our recordkeeping partners facilitate this, utilizing the same ACH process that is used for employer contributions, so you may see these charges listed on your bank statement as Vestwell, LT Trust or MG Trust. Most of our Plan Sponsors find this process to be the most convenient way to pay fees, but if requested, alternative arrangements (check or credit card) can be made.
Are there any other regular fees charged to my Plan?
No. Vestwell’s fees cover all fiduciary and non-fiduciary services necessary to support the Plan. From time to time, participants may be charged for individual activities that require additional time for handling, such as loans, hardship distributions, and processing of a domestic relations order. Likewise, your Plan may need special services, such as re-running annual compliance testing if your Plan failed or preparing amendments that you request us to make. We use our best efforts to notify Plan Sponsors and participants when a service request may result in additional charges.
Are there additional expenses for the investment options available in the Plan?
Yes, every mutual fund or other security has an expense that is established by the issuer of the mutual fund or security. Vestwell has no control over what those providers charge.
For Plans that utilize Vestwell as the Investment Manager, we select a diverse line-up of low-fee index funds or similar holdings. The expense for each investment option, along with a helpful guide to understanding mutual fund expenses, is provided in the Investment Comparison Chart that accompanies every fee disclosure notice and those notices are stored in the Plan Sponsor portal. All investment-related expenses are deducted from participants’ account balances and shown in their quarterly benefit statements.
Does Vestwell engage in "revenue sharing"?
Revenue sharing is a practice in which retirement plan service providers receive compensation from the mutual fund providers of participant investments. Vestwell does not typically engage in that practice as a way of charging plans on our platform. However, as an open architecture platform, assets are occasionally allocated to certain revenue-sharing funds by other service providers to the Plan (such as the Plan’s Investment Manager). In these cases, any revenue-sharing compensation received by Vestwell will be allocated first as a credit toward any sponsor-paid fees owed by the Plan, and then as a credit toward any fees charged to Plan assets.
What should I do if I have a billing or other fee-related question?
Reach out to your Financial Advisor or email email@example.com anytime.