Mutual Fund Savings

The Maryland Supplemental Retirement Plans (MSRP) Board of Trustees (the Board) has developed a Mutual Fund Savings Program for participants. The savings program was designed to refund participants portions of the annual operating fees charged by mutual funds, and is part of an on-going effort by the Board to potentially make MSRP more affordable for State of Maryland employees.

At the Board’s direction, mutual fund savings are used to buy additional shares in the applicable funds. These shares are then distributed to participants’ accounts quarterly. Since the savings program began in 1995, nearly $16 million in shares have been returned to MSRP participants. Savings appear on participants’ account statements under the heading Mutual Fund Savings.

The story behind the savings

Mutual fund savings are paid to MSRP by the sponsors and distributors of the mutual funds used by MSRP – for example, T. Rowe Price and Fidelity Investments. The savings are paid when an investor like MSRP performs an administrative duty that would have otherwise been the responsibility of the mutual fund sponsor.

The Board determined that the savings are passed on to you, the participant, instead of MSRP so there will be no incentive to favor one mutual fund over another.

Mutual fund savings are a good example of how small amounts can add up to big dollars. Sixteen million dollars in shares returned to participants since 1995, remember? The amount of savings varies from fund to fund, so there is no standard savings amount. The Board negotiates the refund amount individually with each mutual fund, but not all funds offer savings.

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