Transparency In Retirement Plans – Why Not Health Insurance Plans?

Employer thought they were paying their broker $126,000 per year. They were actually paying more than that………………………

By Bill Rusteberg

Retirement plan administrators routinely disclose all fees and expenses associated with their services yet many health plans lack full disclosure.

For example, some time ago I was retained by a 2,500 employee school district in deep South Texas to review their self-funded plan. One of the things the group wanted to know was confirmation their Broker of Record was being paid $126,000 per year and nothing more. Well……….we discovered (and documented) there was not one BOR but two. Their total compensation was $613,000 a year.

Below is an actual email we received this morning referencing one of our clients Annual Retirement Plan Fee Disclosure Notice. Why don’t all health plan administrators do the same?


Enclosed you will find the Annual Retirement Plan Fee Disclosure Notice that pertains to your XXX retirement plan product.

This notice illustrates the quality services that XXX provides, and the fees and expenses associated with those services, as required by the Department of Labor’s service provider fee disclosure requirements under ERISA 408(b)(2).

Please file this notice with your Group Annuity Contract and other important plan documents. It is for your plan records only and is not required to be distributed to participants.

We are constantly looking for opportunities to reduce administrative hassles and simplify your service experience. Thank you for your business as we continue to meet your retirement plan needs. If you have any questions, please contact your XXX representative.

Retirement Plans Division


PS – the group in deep South Texas fired their broker and hired someone else to receive the $614,000. Now that’s a story that needs telling…………………….