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Case 3:06-cv-00703-DRH-CJP Document 2 Filed 09/11/2006 Page 28 of 52111. Revenue sharing is not confined to mutual funds. Common collective trusts,providers of guaranteed insurance contracts, and private investment pools may enter intoRevenue Sharing arrangements in connection with the services they provide to 401(k) plans.112. Revenue Sharing also occurs between and among brokerage firms, investmentmanagers, Fund families and other service providers.113. When 401(k) plan service providers receive compensation in the form of bothHard Dollar fees and Revenue Sharing payments, determining the total amount of fees andexpenses that the plan incurs for any category of services (i.e. recordkeeping and administration,investment management, trustee, auditing, accounting, etc.) requires that both the Hard Dollarfees and Revenue Sharing payments be taken into account.114. Ascertaining whether the Plan Administrator has fulfilled its fiduciary obligationto ensure that the fees and expenses assessed against the 401(k) plan are reasonable and incurredsolely in the interest of plan participants requires consideration of the total of both the HardDollar and Revenue Sharing payments paid for any category of services.115. Although Revenue Sharing monies arise only as a result of, and in connectionwith, transactions involving the plan, plan assets and plan service providers,Revenue Sharingis not always captured and used for the benefit of the plan and the participants.116. When Revenue Sharing is foregone, the plan will not only pay additional harddollar fees to the plan service providers (since no Revenue Sharing payments are available tooffset those Hard Dollar costs), but the Plan will also pay additional money to the Fund, beyondwhat the Fund would normally keep (because the Fund’s expense ratio includes both the actualprice of the Fund’s services and Revenue Sharing amounts).28