Are You Paying Too Much for Your 401(k), Defined Benefit, or Pension Plan? 5 Questions Every CFO Should Ask
For CFOs, retirement plan costs are often buried under layers of complexity: provider fees, investment expenses, actuarial assumptions, and administrative charges that are difficult to benchmark. Most organizations only know what their broker or recordkeeper tells them. Few know if their 401(k), defined benefit, or pension costs are truly competitive.
At PolicySmart, we help finance leaders uncover hidden retirement plan costs and identify opportunities for meaningful savings. Through independent benchmarking, fee transparency, and plan design analysis, we empower CFOs to take back control of their retirement plan spend. No broker change is required.
Here are five critical questions every CFO should be asking about their retirement plan.
1. How do I know if our retirement plan fees are competitive?
Many companies assume their plan is priced fairly, but without peer benchmarking there is no way to know. Industry data shows that fees vary widely depending on provider contracts and plan size.
Action step: Request full fee disclosures from all vendors and compare them to organizations of similar size and complexity. Independent benchmarking can quickly reveal if you are overpaying.
2. Are we paying for services we do not use?
Bundled 401(k), DB, and pension arrangements often include standard services that are not actively used by employees or administrators. These unused services add unnecessary cost.
Action step: Conduct a line-item review of actuarial, administrative, and investment services. Remove redundancies and renegotiate fees that do not align with your plan’s actual needs.
3. When is the right time to de-risk or restructure a defined benefit plan?
Waiting until a DB plan is nearly fully funded to de-risk can expose the organization to significant volatility. Risk management works best when implemented early.
Action step: Evaluate strategies such as liability-driven investing (LDI) or glide paths that align with your funded status. Proactive de-risking helps reduce exposure and preserve gains over time.
4. Are we overpaying for asset management in our pension plan?
Investment management fees are often the largest hidden expense in retirement plans. Even a small percentage difference can result in millions of dollars over time.
Action step: Benchmark your asset management fees against industry standards. Independent reviews often uncover savings that directly improve plan performance and bottom-line costs.
5. Could consolidating providers reduce costs and risks?
Using multiple providers creates administrative complexity, data inconsistencies, and added expenses. Consolidation often improves efficiency and strengthens oversight.
Action step: Assess whether consolidating services could reduce redundancies, streamline compliance, and unlock stronger negotiating leverage across providers.
The Bottom Line for CFOs
If your 401(k), defined benefit, or pension plan has not been independently reviewed in the last three years, you are likely overpaying.
PolicySmart helps CFOs:
- Benchmark 401(k), defined benefits, and pension costs against peer organizations
- Identify hidden vendor fees and inflated charges
- Optimize plan structures and savings opportunities without requiring a broker change
We do not sell retirement products. We provide objective insights that deliver measurable results.Ready to find out if you are paying too much for your retirement plan?
Contact PolicySmart today to schedule a confidential 401(k) and pension plan review.