Why fee comparisons are confusing
Group retirement plan providers quote fees in inconsistent ways. Some show only the 'Fund Management Fee,' which excludes operating expenses and HST. Others show the 'MER' but exclude the platform or administration fee. The only number that matters for comparison is the all-in cost: everything paid for the plan and its investments, typically expressed as basis points of AUM annually.
The four parts of an all-in fee
Every group plan fee is built from the same four parts. Knowing what drives each one tells you where a plan's cost comes from, and which questions to ask. Always ask for the all-in number, including HST, for the portfolio most of your members hold.
1. Investment costs
This is the management expense ratio (MER) of the funds members hold, set by each fund manager. It depends mostly on the type of fund: actively managed mutual funds commonly carry MERs of 0.7–1.5%, while index ETFs commonly sit between 0.06% and 0.40%. The ETFs in the portfolios managed by LINK Plan Management Inc. currently have MERs from 0.06% to 0.31%, as shown on our Fund investment information page.
2. Platform and recordkeeping
This covers running the plan: recordkeeping, contributions, statements, the member and employer portals, and support. It is usually charged as a percentage of plan assets, and it depends largely on plan size, because larger plans spread the fixed cost of running a plan across more assets. Smaller plans may be priced differently: a lower asset-based fee combined with a monthly fee per member and a monthly fee for the plan. Because the monthly fees don't depend on account balances, this blended approach can make a group plan practical for companies with fewer employees or smaller balances.
3. Advisor or broker compensation
If your plan has an advisor or broker of record, their compensation is usually built into the fee. It pays for plan design advice, enrolment support and ongoing service. Ask how it is paid, what it covers, and whether it changes if the plan moves to a new provider.
4. Other fees
Transfer-out fees, account maintenance charges, trading fees on self-directed accounts, and GST/HST on fees. These are easy to miss because they rarely appear in the headline number.
Why two plans can pay different fees
Two plans on the same platform can pay different all-in fees, and that is normal. Plan size, the investment lineup and whether an advisor is involved all change the number. That is why the useful comparison is your plan's all-in cost against what a plan of your size and structure could pay, not against a single published rate.
What the group savings industry average is
Across major Canadian group RRSP providers, the all-in cost for a balanced fund portfolio including platform fees and advisor compensation is commonly well above 1% a year, though costs vary widely by provider, plan size and fund lineup. Plans built on proprietary mutual funds tend to sit at the higher end. Your plan's fee disclosure is the best place to find your actual number.
Why ETF-based plans cost less
The investment cost difference between actively managed mutual funds and index ETFs alone, before any platform fee, is often 50–80 basis points a year. The ETF portfolios managed by LINK Plan Management Inc. are built from low-cost index ETFs; the MER for each fund is listed on our Fund investment information page, with a link to its fund facts. Some plans offered through LINK's partners use the partner's own ETF or mutual fund lineup instead, so the investment cost for a given plan depends on which portfolios its members hold.
How to check your own plan
Start with your plan's most recent fee disclosure. Ask your provider for the all-in cost, including HST, for the portfolio most of your members hold. This is typically expressed in basis points; if your plan also has monthly fees, ask for those as well. Check whether that figure includes the platform fee and any advisor compensation, and which fees are paid by members and which by the employer. Then compare it with plans of a similar size and structure, using the same all-in definition.
The compounding math
On a $50,000 account balance, 50 basis points is $250 in additional fees in the first year, and the fee grows as the balance grows. Over 30 years, a $50,000 balance growing at 6% instead of 5.5% ends up approximately $38,000 smaller, money lost from each member's retirement savings. For a 60-person plan with average balances of $50,000, that's about $2.3 million in aggregate retirement savings the difference creates (or costs).