Fee Changes – Savings Plus is committed to fee transparency
In keeping with our fiduciary responsibility to ensure the best interest of our plan participants, Savings Plus analyzed several alternatives to determine an administrative fee structure that creates an equitable fee allocation across participant accounts. This new structure provides a greater level of fee transparency while generating sufficient revenue to administer the plans and to maintain a prudent fund reserve.
Savings Plus administrative fees cover the costs associated with services – like our website, Solutions Center, investment education, internal operating expenses, and service provider costs. Refer to our Fee Policy Statement for more information.
Our previous administrative fee structure consisted of a monthly administrative charge of $1.50 per plan and an annualized asset-based fee of 0.05%, which was embedded in the fund expense ratio. While we disclosed these fees, you did not see the asset-based fee on your account statement because it was deducted from investment earnings and disclosed on our Fund Fact Sheets and our Investment Performance Report.
Beginning April 1, 2022, the administrative charge changed from a monthly fee of $1.50 to a quarterly fee of $6.00 for each plan and the annualized asset-based fee changed from 0.05% to 0.04%. The asset-based fee will no longer be embedded in the fund expense ratio. Instead, it will be assessed quarterly at 0.01% against the first $600,000 of your account balance1, capped at $60 per quarter. The fee will be found on your account statement and will no longer be netted against fund performance. This change makes our administrative fees more transparent while strengthening our investment fund performance.
In addition, new accounts may qualify for a four-quarter fee waiver which begins after the first contribution date.
These changes do not apply to other fee types, such as investment management, participant-directed, or enhanced services fees. Our Annual Fee Disclosure provides more information about these fees.
1Including your core account balance, active loan balance, and Schwab Personal Choice Retirement Account (PCRA) balance
Example fee calculations
Administrative Fee Structure through March 31, 2022 | Administrative Fee Structure as of April 1, 2022 | |||||||||
Participant Account Balance* | Annualized Asset-Based 0.05% | Admin Charge $18/year | Total Annual Fees | Assessed Quarterly | Annualized Asset-Based 0.04% | Admin Charge $24/year | Total Annual Fees | Assessed Quarterly | Annual Change
|
|
$2,000 | $1 | $18 | $19 | $4.75 | $0** | $0** | $0** | $0** | ||
$10,000 | $5 | $18 | $23 | $5.75 | $4 | $24 | $28 | $7 | ||
$60,000 | $30 | $18 | $48 | $12.00 | $24 | $24 | $48 | $12 | $0 | |
$100,000 | $50 | $18 | $68 | $17.00 | $40 | $24 | $64 | $16 | ||
$600,000 | $300 | $18 | $318 | $79.50 | $240*** | $24 | $264 | $66 | ||
$800,000 | $400 | $18 | $418 | $104.50 | $240*** | $24 | $264 | $66 | |
* Assumes full account balance is invested in the core account under the fee structure through 3/31/2022
** Hypothetical account qualifying for the new account fee waiver after first contribution date under the fee structure as of 4/1/2022
*** Asset-based fee assessed against first $600,000 account balance under the fee structure as of 4/1/2022 (maximum fee cap)
1) When and how is Savings Plus changing its administrative fees?
Prior to April 1, 2022, our administrative fee structure consisted of a monthly administrative charge of $1.50 per plan and an annualized asset-based fee of 0.05%, which is embedded in the fund expense ratio. While we disclose these fees, you currently do not see the asset-based fee on your account statement because it is deducted from investment earnings and disclosed on our Fund Fact Sheets and our Investment Performance Report.
Beginning April 1, 2022, the administrative charge will change from a monthly fee of $1.50 to a quarterly fee of $6.00 for each plan and the annualized asset-based fee will change from 0.05% to 0.04%. The asset-based fee will no longer be embedded in the fund expense ratio. Instead, it will be assessed quarterly at 0.01% against the first $600,000 of your total account balance, including your core account balance, active loan balance, and Schwab Personal Choice Retirement Account (PCRA) balance. The asset-based fee is capped at $60 per quarter per plan. This fee will no longer be netted out of fund performance. The fee will now be included on your account statement beginning with your second quarter statement as of June 30, 2022 (published in July).
2) Why is Savings Plus changing its administrative fees?
Our new administrative fee structure is designed to provide a greater level of fee transparency, to simplify plan communication and participant education, for participants to pay an equitable share of plan expenses, and to strengthen investment fund performance.
3) How does the change to administrative fees strengthen investment fund performance?
Our investment fund expense ratios consist of operating expenses, including management fees and nominal trustee services fees. Prior to April 1, 2022, the expense ratios also included an asset-based administrative expense reimbursement fee paid to Savings Plus to help offset the cost of plan administration. Beginning April 1, 2022, the expense ratio will no longer include the expense reimbursement fee, thus strengthening investment fund performance. You will continue to pay investment management fees, which are expressed as an expense ratio in the Fund Fact Sheets and Investment Performance Report.
4) How does the change to administrative fees affect participants with PCRA and loan balances?
Prior to April 1, 2022, the asset-based expense reimbursement fee was included within our investment fund expense ratios. Because PCRA and active loan assets are outside of the core accounts, these assets did not include the expense reimbursement fee, meaning that participants with these assets did not pay a comparable amount of the Plan’s overall administration costs. PCRA and active loan balances are considered plan assets and are subject to the same administrative fees as core plan assets under the fee structure beginning April 1, 2022. Refer to question 9 for an example of how the administrative fee is calculated against PCRA and active loan balances.
5) Why does Savings Plus charge two administrative fees?
The dual administrative fee structure (per capita administrative charge and an asset-based fee) is common within the industry because it provides incentive for both high and low balance participants in the program and creates an equitable fee allocation across participant accounts.
6) When will the administrative fees be assessed each quarter?
Administrative fees will be assessed against your account balance per plan on the 20th calendar day of the 3rd month of each quarter. If the 20th falls on a weekend or a stock market holiday, the fees will be deducted the following business day. The first quarterly fees will be deducted on June 21, 2022, as the stock markets are closed on Monday, June 20 in observance of Juneteenth.
7) Which assets will be included in the calculation of the quarterly asset-based fee?
The asset-based fee calculation includes your entire account balance, consisting of your core account, active loans, and PCRA balances.
8) How will the administrative fees be deducted from my account?
The administrative fees will be pro-rated against the assets in each of your core accounts and applied to all money types (e.g., pre-tax, Roth, rollover, employer contributions). For example, if you have a 457(b) Plan account balance of $100,000 with $75,000 in Fund A and $25,000 in Fund B, then the quarterly 0.01% asset-based fee will be $10.00, deducted as $7.50 from Fund A and $2.50 from Fund B. The quarterly $6.00 administrative charge will be deducted as $4.50 and $1.50, respectively.
9) How will the administrative fees be calculated if I have a PCRA and/or an active loan?
The quarterly 0.01% asset-based fee will be calculated against your full account balance, including your PCRA and active loan balances, but will be deducted proportionately only from the funds in your core account. For example, if you have a 401(k) Plan account balance of $100,000 with $30,000 in Fund A, $20,000 in Fund B, $25,000 in the PCRA, and a $25,000 active loan balance, then Fund A represents 60% and Fund B represents 40% of your core account balance. Therefore, the $10.00 asset-based fee would be deducted as $6.00 from Fund A and $4.00 from Fund B. The quarterly $6.00 administrative charge will be $3.60 and $2.40, respectively.
10) What is the maximum asset-based fee and administrative charge that I will pay each quarter?
An asset-based fee will be assessed quarterly at 0.01% against the first $600,000 of your account balance, which caps the fee at $60 per quarter per plan. Separately, you will pay a $6.00 quarterly administrative charge per plan.
11) How will the administrative fees be assessed if I have both a 401(k) and 457(b) Plan account?
The asset-based fee and administrative charge will be assessed on the balance of each plan, separately.
12) How does the administrative fee waiver apply when I open a new account?
When you make your first voluntary contribution to your account, you will automatically receive the administrative fee waiver for up to four consecutive quarters. For example, if your first voluntary contribution posts to your account in April 2022, your administrative fee waiver begins in 2nd quarter (Q) 2022 since April falls within 2nd Q reporting. The waiver continues through 3rd Q 2022, 4th Q 2022, and 1st Q 2023. The administrative fees will be deducted from your account beginning in 2nd Q 2023.
13) Can I still receive the benefit of the fee waiver if I opened and contributed to my account before the implementation of the administrative fee changes?
You will receive a partial administrative fee waiver if your first voluntary contribution deposited to your account between July 2021 and April 2022. For example, if your first contribution posted July 1, 2021, the current $1.50 monthly account fee will be deducted from your account from July 2021 through March 2022. Then you receive the benefit of the administrative fee waiver in 2nd Q 2022. The administrative fees will resume being deducted from your account in 3rd Q 2023. Refer to the following table for additional partial administrative fee waiver scenarios.
First voluntary contribution posted | $1.50 account fee deducted monthly through | Account qualifies for quarterly administrative fee waiver during | Quarterly administrative fees begin/resume starting |
---|---|---|---|
July – Sept 2021 | March 2022 | 2nd Q 2022
(waived June 2022) |
3rd Q 2022
(assessed Sept 2022) |
Oct – Dec 2021 | March 2022 | 2nd Q and 3rd Q 2022
(waived June and Sept 2022) |
4th Q 2022
(assessed Dec 2022) |
Jan – March 2022 | March 2022 | 2nd Q, 3rd Q, and 4th Q 2022
(waived June, Sept, and Dec 2022) |
1st Q 2023
(assessed March 2023) |
On or after April 2022 | N/A | 2nd Q, 3rd Q, 4th Q, 2022, and 1st Q 2023
(waived June, Sept, Dec 2022, and March 2023) |
2nd Q 2023
(assessed June 2023) |
14) If I open a 401(k) or 457(b) Plan account for the purpose of transferring my Lump Sum Separation Pay, when will I begin paying the administrative fees on my account?
Lump Sum Separation Pay is considered a voluntary contribution. If your Lump Sum contribution is your first voluntary contribution, you may qualify for the administrative fee waiver for up to four consecutive quarters as described in questions 12 and 13.
15) If I transfer my Lump Sum Separation Pay to my existing 401(k) or 457(b) Plan account in which I have previous voluntary contributions, will I receive the benefit of the administrative fee waiver?
The administrative fee waiver only applies to accounts with no prior voluntary contributions. As such, the administrative fees will continue to be assessed on your accounts in this scenario.
16) When does the administrative fee waiver begin if my Part-time, Seasonal, and Temporary Employees Retirement Program (PST) account was transferred into a 457(b) Plan?
PST transfers to a 457(b) Plan account are not considered voluntary contributions. As such, the administrative fees will be assessed on your 457(b) Plan account until you make your first voluntary contribution to your 457(b) Plan account. The administrative fee waiver will begin for up to four consecutive quarters thereafter.
17) When does the administrative fee waiver begin if I rollover IRA, 401(k), 457(b), or 403(b) assets from an outside investment company into my Savings Plus 401(k) or 457(b) Plan account?
Rollover-in assets are not considered a voluntary contribution. As such, the administrative fees will be assessed on your account until you make your first voluntary contribution. The administrative fee waiver will begin for up to four consecutive quarters thereafter.