Retirement Fees
Understanding your fees can help you monitor and control your costs. This is important as the fees you pay play an important part in how your account may look at retirement. To learn more on how fees can impact your account growth, review the SEC article How Fees and Expenses Affect Your Investment Portfolio.
Record-keeping Fees
The annual record-keeping fee covers numerous services that are necessary for the day-to-day operation of the plans by your provider. This includes provider administrative duties, participant advice, quarterly statements, participant communications and customer service.
The plans’ record-keeping fees vary by plan and provider and will be deducted from your account(s) automatically. The annual fee will be deducted on a quarterly basis.
Things you should know about record-keeping fees
- Record-keeping fees are in addition to investment management fees described in the next section.
- You will be assessed a record-keeping fee for each account where you have a balance. For example, if you have a 403(b) balance with two providers, a record-keeping fee will be deducted by each provider. To avoid multiple fees, consider consolidating your accounts.
| Provider | ARP | 403(b) | 457(b) | RCP | 415(m) |
|---|---|---|---|---|---|
| Corebridge Financial* | $30 | $32 | – | – | – |
| Fidelity | $47 | $49 | $51 | $55 | $57 |
| ODC | – | – | see ODC website |
– | – |
| TIAA | $50 | $55 | $70 | $70 | $70 |
| Voya* | $40 | $50 | – | – | – |
| *Voya and Corebridge Financial participants also have administrative charges for assets on account balances contributed prior to January 2021. See the Corebridge Financial Legacy Fee Analysis and the Voya Legacy Fee Analysis for more information. We recommend you contact your provider to discuss any fees on your legacy account. | |||||
Investment Management Fees
Every investment has a cost. Investment management fees are determined using a “total expense ratio,” which is the percentage of assets an investment manager charges each year to cover the fund’s annual operating expenses.
The total expense ratio covers operational costs such as investment management fees, compliance, distributions, marketing, shareholder services and other expenses associated with the fund management. The total expense ratio is deducted from investment returns before given to investors. Your total return is net of these expenses. The higher the total expense ratio, the more the fund needs to perform in order to overcome these costs.
A total expense ratio is expressed in basis points. One basis point is equal to .01%. Therefore, a total expense ratio of 0.09% means that for every $10,000 you have invested, the fund will collect $9 annually from your account to cover its costs.
Each of the investment options within the plans has an expense ratio. The total expense ratios are different for each investment option.
Total Expense Ratio by Investment Options
The total expense ratios for Tier 1 and Tier 2 investments can be found below. Please contact your provider for the total expense ratios for the investment options available through Tier 3.
Total Expense Ratio measures how much of a fund’s assets are used for operating expenses and consist of Investment Management Fees and Shareholder Servicing Fees. Investment Management Fees are charges levied by an investment manager for managing a fund. Shareholder Servicing Fees are charges levied by an investment manager to offset recordkeeping and administration services. Shareholder Servicing Fees for all Tier 1 funds are 0% because recordkeeping and administration fees are now assessed directly to participant accounts as a separate fixed quarterly fee that varies by plan and provider.
| Fund Name | Vehicle Type | Ticker Symbol | Total Expense Ratio |
|---|---|---|---|
| Vanguard Target Retirement Income Fund – Investor | Mutual Fund | VTINX | 0.08% |
| Vanguard Target Retirement 2020 Fund – Investor | Mutual Fund | VTWNX | 0.08% |
| Vanguard Target Retirement 2025 Fund – Investor | Mutual Fund | VTTVX | 0.08% |
| Vanguard Target Retirement 2030 Fund – Investor | Mutual Fund | VTHRX | 0.08% |
| Vanguard Target Retirement 2035 Fund – Investor | Mutual Fund | VTTHX | 0.08% |
| Vanguard Target Retirement 2040 Fund – Investor | Mutual Fund | VFORX | 0.08% |
| Vanguard Target Retirement 2045 Fund – Investor | Mutual Fund | VTIVX | 0.08% |
| Vanguard Target Retirement 2050 Fund – Investor | Mutual Fund | VFIFX | 0.08% |
| Vanguard Target Retirement 2055 Fund – Investor | Mutual Fund | VFFVX | 0.08% |
| Vanguard Target Retirement 2060 Fund – Investor | Mutual Fund | VTTSX | 0.08% |
| Vanguard Target Retirement 2065 Fund – Investor | Mutual Fund | VLXVX | 0.08% |
| Vanguard Target Retirement 2070 Fund – Investor | Mutual Fund | VSVNX | 0.08% |
Total Expense Ratio measures how much of a fund’s assets are used for operating expenses and consist of Investment Management Fees and Shareholder Servicing Fees. Investment Management Fees are charges levied by an investment manager for managing a fund. Shareholder Servicing Fees are charges levied by an investment manager to offset recordkeeping and administration services. Shareholder Servicing Fees for all Tier 2 funds are 0% because recordkeeping and administration fees are now assessed directly to participant accounts as a separate fixed quarterly fee that varies by plan and provider.
There is no expense ratio associated with the Plan’s Fixed Annuity options. Any Investment Management and Shareholder Servicing Fees are deducted automatically from the gross crediting rate to arrive at the net crediting rate. Net crediting rates are declared in advance and fixed for either a six- or twelve-month period.
| Fund Name | Vehicle Type | Ticker Symbol | Total Expense Ratio |
|---|---|---|---|
| Vanguard Cash Reserves Federal Money Market Fund Admiral | Mutual Fund | VMRXX | 0.100% |
| Vanguard Total Bond Market Index Fund – Institutional | Mutual Fund | VBTIX | 0.035% |
| Vanguard Institutional Index – Institutional Plus | Mutual Fund | VIIIX | 0.020% |
| Vanguard Extended Market Index Fund – Institutional | Mutual Fund | VIEIX | 0.050% |
| Vanguard Total International Stock Index Fund – Institutional | Mutual Fund | VTSNX | 0.090% |
| Corebridge – Fixed Interest Option | Fixed Annuity | N/A | 0.000% |
| Fidelity – New York Life Guaranteed Interest Account | Fixed Annuity | N/A | 0.000% |
| TIAA – TIAA Traditional | Fixed Annuity | N/A | 0.000% |
| Voya – Voya Fixed Plus III | Fixed Annuity | N/A | 0.000% |
Total Expense Ratio Example – Portfolio Value from Investing $100,000 over 20 years
This line graph shows that in 20 years, a 0.5% total expense ratio reduces the portfolio value by $10,000 (dashed gray line) compared to a portfolio with a 0.25% total expense ratio (solid black line).
In 20 years, a 1.0% total expense ratio reduces the portfolio value by nearly $30,000 (dotted red line) compared to a portfolio with a 0.25% total expense ratio (black line).
Investment costs might not seem like a big deal, but they add up, compounding along with your investment returns. In other words, you don’t just lose the tiny amount of fees you pay, you also lose all the growth that money might have had for years into the future.
Note: If you invest in Tier 3 through the self-directed brokerage window there will likely be higher total expense ratios or other additional charges.
Transaction Fees
These fees are charged when a participant engages in a specific action. Transaction fees vary by provider.
The chart below illustrates the transaction fees assessed by the plans’ current providers:
| Provider | Loan Initiation | Loan Maintenance | Brokerage account maintenance fee |
|---|---|---|---|
| Corebridge Financial | $50 | $50 | $50 |
| Fidelity | $50 | $6.25/quarter | – |
| TIAA | $75 for general; $125 for principal residence |
$25 | – |
| Voya | $100 | – | $50 |