Why am I seeing fees on my Nationwide Deferred Compensation Plan Statement?
As you look at your quarterly Deferred Compensation Plan statement from Nationwide you will now see a monthly transaction labeled “Explicit Asset Fee” on the last business day of each month. It is important for you to know how much you pay for the Deferred Compensation Plan. Participants have always paid fees in the past, Voya just chose to deduct them before showing your quarterly account value. This was common practice in the past, but more plans are moving to transparency in the fees assessed. Investment fees for the management of the mutual funds and the fixed return option are still taken before valuation each day, but for the Nationwide and administrative expense fees, those will now show on your statement.
Nationwide charges an annual fee of 0.03% on plan assets to serve as the custodian and record keeper for the KCPD Deferred Compensation Plan. That works out to $0.30 per year for each $1,000 invested. On average, Voya charged 0.44% or $4.40 per year for each $1,000 invested for the same service.
The administrative expense fee for this year will be 0.04% ($0.40 per year for each $1,000 invested). As the account balances grow, the Deferred Compensation Committee expects to be able to lower the administrative expense fee. You will receive notice when that happens. The administrative expenses incurred include the cost of the Deferred Compensation Committee’s consultant who helps monitor the plan, participation in the National Association of Governmental Defined Contribution Administrators, and training and education for Committee members to keep up to date on best practices for Deferred Compensation Plans.
The combined fee of 0.07% annually on plan assets (or $0.70 per year for each $1,000 invested) is what you will see reflected on your statement.