Are Lower Fees the Best Way to Support Retirement Readiness?

October 1, 2018
Business discussion

Here’s How to Keep the Services and Value You Receive in Perspective

Retirement plan fees continue to be a hot topic within the industry. Further, there is some debate about price versus quality. Which actually drives better retirement outcomes for employees?

While retirement plans must be managed for the exclusive benefit of employees, looking at fees alone only shows part of the picture. Best practices for plan design and education can actually boost employee retirement income, which can lead to much greater appreciation of the plan and its benefits.

The 20 Percent Difference

The chart below1 shows the potential difference that thoughtful plan design and targeted education, in partnership with a plan advisor, could make in an employee’s annual retirement income — versus solely focusing on reducing fees. It also includes additional educational opportunities that can make a difference.

The Difference in Annual Retirement Income

To learn more, contact your local service representative at The Standard.


1 Assumptions: The employee 40 years old, unmarried and has an account balance of $632,521 at retirement age. Contributions start at age 30 with a savings rate of 6 percent. The employer matches 3 percent (50 percent of pay up to 6 percent). Asset-based fees are 70 basis points. Returns are 7.25 percent before retirement and 4.25 percent after. Salary is $50,000 with projected annual increases of 2 percent. Inflation is 2.5 percent. Source: StanCorp Investment Advisers, Inc. Figures rounded to nearest whole number.