We encourage you to ask about and understand all fees associated with all of your investments.

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Because if you understand the importance of fees to your retirement account value and you compare our fees to any other plans, we are confident you will appreciate the value of our competitive fees.

Ohio DC offers a select group of investment options. We use an expert investment consulting firm that considers fees as part of a comprehensive evaluation process in selecting and monitoring investment options.

Participants in Ohio DC benefit from the size of the Program, which allows us to offer the institutional share class of many mutual funds. This means that because of the size of the Program, you will have access to lower-costing investments than those available to individual investors.

A United States Department of Labor article says a difference of only 1 percent in fees can make a huge difference in your retirement income. While the article talks about fees in a 401(k) plan, the lessons apply equally well to Ohio Deferred Compensation and other 457(b) plans. The article presents the following example, which demonstrates how fees and expenses can affect your account.

“Assume an investor with 30 years until retirement and does not have a retirement account balance. If returns on investments in the account over the next 30 years average 6 percent, and fees and expenses reduce the average returns by 0.5 percent, the account balance will grow to $222,714 at retirement, even if there are no further contributions to the account. If fees and expenses are 1.5 percent, however, the account balance will grow to only $186,643. The 1 percent difference in fees and expenses would reduce the account balance at retirement by 16 percent.” That’s $36,071 that stays in the account!

Effect of Fees chart

This hypothetical example is not intended to predict or project investment results of any specific investment. This calculation illustrates the principle of time and compounding. It assumes neither taxes on contributions or earnings, nor any account withdrawals, which would reduce the results shown.

Ohio DC offers a select group of investment options. We use an expert investment consulting firm that considers fees as part of a comprehensive evaluation process in selecting and monitoring investment options. 

Participants in Ohio DC benefit from the size of the Program, which allows us to offer the institutional share class of many mutual funds. This means that because of the size of the Program, you will have access to lower-costing investments than those available to individual investors.



How do retirement plan fees work?

How are costs charged to participants in Ohio Deferred Compensation?

Ohio IPRInvesting in a retirement plan isn’t free. There are two basic costs: investment management costs and administrative costs. Investment managers typically collect these fees and sometimes reimburse a portion of the fees they collect to the administrator (in this case, Ohio DC) for functions the investment managers would normally perform themselves. These are called administrative fee reimbursements. For years, all of our administrative costs were supported by fee reimbursements from various investment managers or by an administrative fee for Ohio DC branded investments.

Investment management fees, which are a percentage of your invested assets, are disclosed on the quarterly investment performance report included with your quarterly newsletter and on the website as an expense ratio (see investment performance report on the right). The fees reduce your daily investment returns.

Investment manager administrative fee reimbursements have been a standard practice for many years among most retirement plans.

How has Ohio DC worked to make the sharing of plan costs fairer to participants?

IPR Fees & RebatesFees are not new to retirement plans. All plans have them. Ohio DC has always disclosed its fees, but you may not be fully aware of what you are paying. Beginning January 1, 2016, Ohio DC took steps to make sure that administrative costs are fairly shared by participants instead of varying the fees based on how much the investment managers charge and then share.

The Ohio DC Board has negotiated with the investment management firms to reduce expenses as much as possible through the use of institutional share classes, comingled investment pools, and separate account trusts. For an investment that does not offer these reductions in the expense ratio, we have negotiated administrative fee reimbursements for investors in those funds. These rebates are reflected as a credit (deposit) in your quarterly statements based on your investments in a fund with administrative fee reimbursements.

Because Ohio DC began rebating administrative fee reimbursements back to participants in 2016, a separate fee is charged to cover administrative costs. Administrative fees are fairer and easier to understand by charging participants an annual fee of 0.0014 or 0.14% with small balance fee waivers and large balance fee caps. A portion of the 0.14% annual fee is deducted each quarter. In response to feedback from participants, the Board modified the new fee policy to apply the waiver and maximum fees per participant rather than by individual account. The new administrative fees are waived for individuals with less than $5,000 in their accounts to help get their savings started. Fees are also capped at $55 each quarter, per participant, regardless of the total balance across all accounts. This information can be found on the investment performance report.

To summarize, you will continue to pay fees for investment management expenses that are included in the daily fund share price. You are charged for the cost of administration separately. If you invest in a fund with an expense ratio that includes administrative fee reimbursements, that reimbursement will be credited to your account.

Why is Ohio DC making this change?

The Board believes a standard fee for administrative costs is fairer to each participant. It also allows participants to see the actual amount of administrative fees that are charged or rebated. Under the previous system, some participants may have paid more or less than their share of administrative costs, depending on which investments they chose and how much the investment manager reimbursed our Program.

Ohio DC has provided education about the importance of fees and how they can affect your retirement account for many years. Now, we have made it even easier to see exactly what your administrative fees are. If you compare these fees to what you would pay with other retirement plans, we are confident you will see the value of our Program. Since Ohio DC is not operating for a profit, we only collect enough fees to cover our administrative expenses and cash flow needs. Collected fees pay for current or future Program services that benefit you, the participant.

What benefits do I get in return for the fees I pay?

  • Institutional share classes of investment options where the lowest investment expenses have been negotiated with the investment manager
  • Face-to-face help from local Account Executives at your worksite while you are employed
  • One-on-one retirement counseling before and throughout your retirement years from our Retirement Planning Specialists
  • Personal, walk-in assistance at our Columbus Service Center
  • Individual customer service from a fellow Ohioan. Telephone Account Executives are available Monday–Friday, 8 a.m.–5:30 p.m.
  • News and education: Newsletters, quarterly account statements, Investment Performance Reports, and a comprehensive annual statement
  • Webinars and seminars: Financial education, life planning, pre-retirement and investment options sessions. Contact us for details.
  • Online services: Enrollment, fund exchanges, allocation changes, deferral changes, and interactive planning tools and calculators to help you make decisions
  • Automated Telephone Service: 24-hour telephone account access for account balance information

Should I choose investments that rebate money?

You should never make an investment decision based only on fees or reimbursements. Any investment that reimburses fees has already built those fees into the expense ratio, which is deducted in calculating the daily fund price. What you’re getting back is what they charged you in the first place for administrative costs.

Before investing in a fund, carefully consider its investment objectives, risks, and charges and expenses. This information and other important facts can be found in the prospectus or fund profile. Read them carefully before investing.

Where can I find the amount each investment manager reimburses Ohio DC?

This information has always been available on our website by reviewing page two of the Dollar Impact of Fees chart. The column called “Administrative Expenses” details how much each investment manager reimburses to Ohio DC. As of June 2017, only one investment option provides an administrative fee reimbursement. The Dodge & Cox Stock fund has an administrative fee reimbursement of 0.10% included in their expense ratio. Ohio DC rebates the fee reimbursement quarterly to the participant accounts invested in this option.

Can I see these administrative fees and rebates on my quarterly statement?

Absolutely! One of the main reasons the Ohio DC Board decided to change the way administrative costs are shared and disclosed is so participants truly understand these costs. Your statement detail shows any administrative fees deducted from your balance in each fund and rebates of any administrative fee reimbursements.

How do I find out what I am paying for investments and administrative services outside Ohio DC?

All plans have investment management and administrative costs related to their services. Ohio DC is often able to negotiate low investment expenses because of the significant size of the combined participant assets.

You can start by asking other retirement plans about their fees. If you do not get a clear answer from a sales representative, who may be earning a sales commission, do your own investigation and look at the investment expenses list in the fund prospectus. They are required to disclose these expenses to you.

Next, look for other asset-based investment fees or administrative fees charged as a flat dollar amount or a percentage of your account. See if there are transaction fees for specific services like exchanges, loans, investment changes, withdrawals, etc.

Lastly, ask about loads, sales charges, and surrender charges that may penalize you for taking money out of the account or charge you an upfront fee to invest. If other retirement savings plans tell you they have no fees, you should be immediately concerned since they incur investment and administrative costs just like Ohio DC. Ask them who pays the investment and administrative costs and how they are paid.

What if I have more questions or need assistance?

Our Service Center staff will gladly explain our fees and why we believe they are a good value. Talk to an Account Executive or Retirement Planning Specialist at 877-644-6457 if you need help or have questions. Since Ohio Deferred Compensation representatives don’t get paid on commission, we have your best interests in mind.



Ohio Deferred Compensation has a simplified, fully disclosed fee structure.

The following is an overview of some of those fees and expenses, the different ways in which they may be charged, and what fees apply to your Ohio DC account:

Fee Description Ohio Deferred Compensation
Asset and Advisory Based Fees Ongoing charges for asset management and investment advice. These may be  charged to you as a percentage of your account balance or as a flat fee. None.
Account Fees These fees are charged in connection with the maintenance of accounts. For example, an account maintenance fee may be charged on accounts whose value is less than a certain dollar amount. None.
Administrative fees included in expense ratios These fees are collected by the investment manager to cover administrative services such as customer service, recordkeeping, website, statements, etc. Many investment managers collect these fees and then reimburse retirement plan recordkeepers for providing these services. Beginning in 2016, Ohio Deferred Compensation will return these administrative fees to participants invested in these options. A fee, separate from the investment expense ratio, will be collected to pay for Ohio Deferred Compensation expenses.
Investment fees included in expense ratios These fees are collected by the investment manager to cover their costs of portfolio management, custody, legal, accounting, etc. Every investment option will have some management fees associated with it. Ohio Deferred Compensation is  generally able to negotiate lower expense ratios unavailable to smaller plans and individual investors. See our Investment Performance Report for all expense ratios and compare to other providers.
Surrender Charges These fees are charged when you withdraw from the plan's investment before the minimum holding period. These fees commonly decrease over time based on the date of each deposit. None.
Sales Commission and Loads These are transaction costs for selling and buying shares within a participant's account. No commissions. Our Account Executives are salaried professionals.
12b-1 Fees These fees are used to pay commissions to brokers and other sales persons, to pay for advertising costs and other costs of promoting the fund, and are ongoing fees paid from fund assets. None.
Individual Service Fees There may be individual service fees associated with optional features offered under an individual account plan. An example of this would be a fee charged for a loan. None.
Redemption Fees Fees charged by certain mutual funds to investors who engage in excessive trading. For additional information regarding redemption fees, please refer to the Redemption Fee section.



Dollar Impact of Fees

See how Ohio Deferred Compensation investment expenses compared to the average expenses of similar investments.


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