Every plan sponsor has unique goals and objectives. As your consultant, we will tailor a service plan specifically to your needs. We will begin by thoroughly scrutinizing your plan to ensure total plan costs are relevant to the services you receive. In addition, we will monitor your plan design on an ongoing basis and suggest ways to improve participation and increase operational efficiency.
Services provided in this step:
- Vendor Benchmarking & Analysis
- Provider Contract Review
- Provider Pricing Renegotiation
- Plan Conversion Guidance
- Plan Design Analysis & Fiduciary Plan Review
- Compliance Checklist
Investment Due Diligence
Without a sound investment due diligence process, companies/plan sponsors may be held personally liable for poor investment performance in a participant-directed retirement plan. Many advisors use Morningstar Principia to evaluate the funds in the plan. We prefer to use fi360 Fiduciary Score® methodology because of its more rigorous screening process. We also rely on Dorsey Wright & Associates to determine the top-performing asset classes and the strongest funds in each asset class. Our goal is to help you choose the best investments, reduce fees, and reduce your liability as a fiduciary.
Fee Analysis & Benchmarking
How much are you and your participants currently paying for your retirement plan?
Most plan sponsors cannot answer that question. The impact of excessive fees is significant. Mutual funds offer many different share classes that range from very low expenses to high expenses. This share class decision alone could potentially impact performance by over 20%.
401(k) Fee Analysis
Because most plan sponsors are not familiar with the different aspects of 401(k) provider pricing, we developed a Fee Analysis Report. This report compares your total current fees, both administrative and investment related, to up to ten other providers that offer plans with similar demographics.
During the 401(k) Fee Analysis, we:
1. Educate plan sponsors on the types of fees plan providers charge, both disclosed and undisclosed.
2. Disclose the amount of fees being paid by the plan sponsor and participants.
3. Discuss alternative fee arrangements.
4. Compare your current plan/provider to other providers that service similar size plans.
5. Review the asset allocation and investment quality of current investment offerings.
This analysis provides numerous benefits to plan sponsors.
- Potentially improved terms with your current provider. We may find areas in your current plan that may not be as competitively priced as other plan providers. This information gives us leverage to improve the terms of your current plan and save you money.
- Provides an understanding of how mutual fund share classes affect pricing.
- If this analysis shows that your plan’s fees are above average in comparison to similar plans, then you will know that you need to start the formal request for proposal (RFP) process. This process is important because under ERISA section404(a)(1)(A) and (B) fiduciaries must act prudently and solelyin the interest of the plan’s participantsand beneficiaries. Conducting formal RFPs to plan providers is an excellent way to document your process of ensuring that your company’s retirement plan is competitively priced and in the interest of the participantsand beneficiaries.
Plan Design – Open Architecture
We understand that your employees will have different degrees of knowledge and interest in investment management. That is why we encourage you to consider offering options for both “hands off” and “hands on” investors — with no additional expenses to you as the plan sponsor.