Monday, March 25, 2013

Retirement Plan Advisor - Reason #7

7. Conduct Ongoing Due Diligence on Service Providers and Investment Managers

The Plan Advisor stays well informed on meaningful developments across a broad spectrum of topics that have the potential to affect the service providers’ ability to deliver quality services (e.g., financial strength, change in ownership/management, and adverse litigation). Due diligence on investment managers entails:

Friday, March 22, 2013

Retirement Plan Advisor - Reason #6

6. Performance Reporting

A comprehensive investment performance report is essential for fiduciaries’ prudent investment decisions. The Plan Advisor generally produces performance reports and makes a presentation to the fiduciaries on a quarterly basis. Performance reports normally include information such as that listed in the table below.

Tuesday, March 19, 2013

Retirement Plan Advisor - Reason #5

5. Investment Manager Replacement

The Plan Advisor’s due diligence on investment managers may reveal a manager that no longer meets the selection criteria in the IPS. The Plan Advisor should notify the institution on a timely basis and the specific criteria under which the manager is deficient. Depending on the number of selection criteria deficiencies and severity of the problem, the Plan Advisor will recommend that the manager be placed “under review” or be immediately replaced.

Monday, March 18, 2013

Retirement Plan Advisor - Reason #4

4. Investment Manager Search and Selection

The Plan Advisor conducts a search for a best-in-class investment manager for each of the asset classes identified in the asset allocation policy section of the IPS. Applying the qualitative and quantitative selection criteria as a filter, the Plan Advisor produces a list of potential managers.

Friday, March 15, 2013

Retirement Plan Advisor - Reason #3

3. Managing a Request-for-Proposals for Service Providers

The Plan Advisor’s knowledge of the investment industry makes it the logical choice to manage a request for proposals (RFP) for other service providers, such as custodian or directed trustee. The Plan Advisor’s role in the RFP includes:

Thursday, March 14, 2013

In-plan Roth Conversions:

A Low-cost Enhancement with Significant Tax Advantages

In-plan Roth 401(k), 403(b), and governmental 457(b) conversions were originally established by the Small Business Jobs Act of 2010. However, under this law, employees have been unable to convert account balances to a Roth inside the retirement plan without a distributable event (i.e., age 59½, termination, death or disability).

Now, they can.

Tuesday, March 12, 2013

Retirement Plan Advisor - Reason #2

2. Establishing Investment Policies and Procedures

A well written investment policy statement (IPS) provides the framework for consistent investment decisions. Early in the relationship, the Plan Advisor will review the existing policies. In the absence of existing policies, the Plan Advisor will provide an IPS to the institution. Standard IPS language encompasses the topics shown in the table below:

Monday, March 11, 2013

7 Reasons for Hiring a Dedicated Retirement Plan Advisor

Fiduciaries of employer-sponsored retirement plans hire a Retirement Plan Advisor to meet their responsibilities under the Employee Retirement Income Security Act (ERISA) and to improve the probability that their employees’ retirement investment goals will be achieved. A Plan Advisor that is dedicated to retirement keeps abreast of changes in the industry and in the regulatory environment and interprets all relevant developments for its clients.

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