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1) Large plan sponsors will reduce and/or eliminate revenue sharing as much as possible
The practice of revenue sharing has received increasing scrutiny over the past few years, with organizations looking for a more equitable approach to paying for their retirement plan’s recordkeeping services. With rising popularity and shrinking recordkeeping margins, moving to an all-institutional fund lineup with zero revenue sharing does not require as large a per-head charge to participants as it would have even a few years ago. The major barrier for plan sponsors is that the majority of participants still believe their retirement plan is free; and moving to a zero revenue-sharing lineup dissolves this myth, potentially causing participant fallout.