Full Transparency

This policy was created to help our clients and business associates understand how we are compensated for our services.

Direct Invoicing

If you are a client of Pension Consultants, Inc., you are invoiced periodically. Some of our clients pay our fees annually, following the completion of our administration for a plan year. Most of our clients are on a quarterly billing schedule. Either way, our fees are broken down on an invoice that is sent to our clients, and we always welcome questions about how our fees are calculated. Since our clients receive a detailed invoice, it serves as direct disclosure of our fees to the plan sponsor. Most of our clients pay our fees by company check. Some of our clients choose to pay these fees through plan forfeitures, or by deducting them from the assets of the plan participants.

Transaction based fees

We have a fee for distribution and loan processing that varies depending on the level of complexity in the transaction. When a plan utilizes an investment platform that handles tax reporting and check writing, we charge $60 for each plan distribution. This includes our time for processing paperwork and working with the investment provider and participant to complete the distribution transaction. For clients needing a distribution process for pooled and brokerage accounts, Pension Consultants will facilitate the entire distribution process through PenChecks Trust Company, a state-chartered, non-depository trust company. We charge $110 for each transaction. The fee includes correspondence with the participant, funds remittance, preparation of forms, and distribution instructions and fees to PenChecks. For loans, we charge an initiation fee of $75, plus a $40 annual maintenance fee for each year the loan is active. Our distribution and loan fees are usually deducted directly from participant accounts at the time of the transaction. In these cases, the transaction fees are disclosed to the participant on the distribution or loan paperwork. Some of our clients choose to pay these transaction fees for the participant, and in these situations the transactions would be disclosed on the fee invoice to the plan sponsor.

Revenue Sharing with Insurance Company and Mutual Fund Products

As a large TPA, we have strong relationships with many of the significant investment providers. All of our clients benefit from these relationships in one important way. Years ago, many of the investment providers began sharing some of their revenue with the TPAs with whom they shared the most clients. Many of the insurance companies and mutual fund products base revenue sharing on the number of plans that a TPA has with them, so in some years we may not get revenue sharing from certain providers. We have received revenue sharing from the following investment providers:

It is important to note that the investment fees a client pays are not affected by whether or not the provider shares revenue with the TPA. These revenue sharing arrangements represent a significant part of our total annual revenue, depending on the year. At PCI, we utilize this additional source of revenue to keep the fees we bill all of our clients down. The result is that our charges generally do not vary from year to year, depending on the investment platform you choose or the fluctuations of the market. We have not increased our fees since these revenue sharing payments started several years ago. Some of the insurance company products require us to list the revenue sharing payments to the plan sponsor via Schedule A of the annual Form 5500. Some of the mutual fund company products do not have the same requirement.

If you have any questions about any of our fee and revenue sharing arrangements, we encourage you to contact Mike Roach, Bill Anastasiades or Frank Rossi at (860) 676-8000.