Members incur certain fees depending upon their choices. A fee that applies to every member is a recordkeeping fee of $30 annually. This fee is charged quarterly. This covers the administration of the plan including tracking contributions, earnings, making distributions, filing all necessary forms with the SEC/DOL, maintaining data on the website, etc.
A second fee is an expense ratio or investment management fee. This is the cost to be invested in each fund. This fee is deducted from your account daily. This type of fee is measured in basis points. For example, let’s say you have an account balance of $100,000 and are invested in a fund that charges 10 basis points (bps). The annual cost is $100 (100,000 x .10%).
The final fee some members may incur involves those who choose to utilize the guaranteed income option under the LIS. The additional fee to secure and ensure this income is at most 95 basis points (.95%). This fee is calculated based on the amount invested in the Secure Income Portfolio.
Members are gradually moved into this portfolio over the 15 years prior to their retirement date. Therefore, the full fee does not apply until a member is completely invested in that portfolio imme-diately prior to retirement. If a member does not choose to secure 100% of their account, the full fee does not apply. In exchange for the fee, members will receive guaranteed income for life that can increase with market gains but will not decrease with market declines. They will also maintain con-trol over their account balance giving them the flexibility to convert all or only a portion to income and to take ad-hoc distributions at any time. Additionally, any balance remaining at death is passed to beneficiaries.
SURS reviews the plan and its fees on a regular basis to ensure only cost-effective, high quality options are provided. For more information on fees, members may consult the DCP materials, the Voya website or contact the SURS Defined Contribution Contact Center at 800-613-9543.