GUST Fees

[Guest Frank Jackson]

I am seeing a wide variety of charges for the GUST Restatement.

Does 1000.00 for a standard document and $2000.00 for a non standard document sound right?

[Guest James Osterhaus]

$1000-2000 is a little high. Were charging, depending on the plan from $500.00 to 850.00

[Guest JimJ]

I agree...

$1k should be about the max. $2k seems like gouging!

[Guest Dan Simonds]

Why does there need to be a separate fee to restate a plan for GUST amendments? Shouldn't keeping a plan up-to-date be part of the normal services of a TPA? Laws are always changing so amendments will be required every so often - why can't TPA's offer this as part of their regular fee? Once a TPA figures out how to amend his plan, shouldn't that amendment be the same for all clients using the same plan document, which can't be worth $1,000 or so per client, can it?

[Guest JimJ]

I would not consider this a "normal service" for many reasons. Typically, this service is disclosed in a TPA's fee quote upfront, therefore the plan sponsor should be aware of the fee well in advance. Although various sponsors may be on the same document, each plans is different and a thourough review is required by plan. I would ask why it seems that TPA's should now be doing more for less? Why is it wrong to charge a fair price for work preformed?

[Guest Dan Simonds]

Ok, I thought TPAs generally charged a one-time fee upfront to put a plan in place and then annual ongoing fees plus per head fees to perform testings, prepare 5500s, and keep plan documents up-to-date. It sounds like the GUST thing is a complete overhaul that almost requires a whole new plan and it falls out of the scope of keeping a plan compliant with the laws. I may not understand what's involved for the GUST updates.

So if there is a lot of new work involved then an extra fee on top of the normal TPA fees is probably justified depending upon the original agreement.

It is my understanding that Principal is not charging extra to make their plans GUST compliant - they include it as part of their normal services. But I think Principal typically charges more so maybe going with Principal vs. a local TPA is about the same price in the long run if the local TPA charges extra for updates for new laws.

[Guest Dan Simonds]

Scudder-Kemper is also not charging to update their prototype document. They will just simply create an update, mail it to the plans, and ask the plans to staple it to their document. The Scudder rep I spoke with says it's part of their normal prototype document service and not that complicated.

[Guest JimJ]

Dan,

You hit the nail on the head with Principal. With the wrap fee they charge everything should be at no additional cost. I would find it hard to believe that a local TPA would cost as much if a true apples to apples comparison was done. But if so, nice selling by the TPA.

I have no clue on the Scudder-Kemper concept, nor am I educated on their fee structure. They may also be well paid for their services. I am a little suspect to the simply stapling concept for GUST.

I have always supported the concept of full disclsure to include, fund expense ratios, sub-ta rebates, 12b1's, etc.. If it is all laid out at the time of the proposal and included in the service agreement, I see no problems. I would however agree that above $1k for any document other than an idividually drafted doc, could be a little high. Anyway, good luck to you.