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A 401(k) plan is highly complex and by its nature very opaque, like a black box.  Our offering peels back the onion to show the three main service roles within each plan: advisor, administrator, and custodian.  Many offerings combine all three under one roof, which decreases transparency, tends to result in higher fees, and leads to conflicts of interest.  By separating these three roles, our offering results in greater transparency, lower plan costs, independence, and accountability.

Since 1995, we’ve partnered with Charles Schwab as custodian for our clients’ assets because they share our values.  For the same reason, we partner with Standard Retirement Services, a division of The Standard, as our third-party administrator and retirement plan provider.  More information about our partners can be found further down this page.

Here are the primary benefits to utilizing P&A and our partners for your company retirement plan needs:

  1. Transparency of fees – Standard Retirement Services’ pricing is very competitive, given the service and value they provide.  All plan fees will be listed individually on one page, fulfilling on P&A’s promise of complete transparency.  Our plan advisory fee will be a percentage of plan assets, while Standard’s administration fee can be either a percentage of plan assets, a billable, or a combination of the two.  In addition, we will spell out the costs associated with the investments in your plan to arrive at an “all-in” expense number.
  2. Reduced administrative & fiduciary burden – Standard Retirement Services simplifies annual reporting and disclosure requirements, compliance testing, and monitors participant eligibility. They can manage the distribution of notices and enrollment materials as well.  Standard Retirement Services can assume ERISA 3(16) Delegated Administrative Fiduciary Services to support the plan’s administrative responsibilities, which should be attractive to you. Both P&A and Standard Retirement Services will be held to a fiduciary standard, either 3(21) or 3(38), for the investment advisory services provided.
  3. Cost savings – Many mutual fund companies pay 401(k) plan providers for using their funds in the core lineup. This is known as revenue sharing, which unnecessarily increases your plan costs and creates conflicts of interest.  Neither P&A nor Standard are paid by the investments we use in your plan.  Any and all revenue sharing will be returned to your plan.  In addition, P&A employs low-cost index funds for roughly half of the core fund lineup, which also helps to deliver cost savings to the plan and participants.  Here’s more about the importance of controlling your plan costs.
  4. Multiple investment options – Besides the core fund lineup (typically between 15 and 25 funds), our offering provides participants several other ways to invest their contributions.  One method is Guided Portfolios, five different risk-based investment mixes–a one stop shop.  Another option allows participants to hire a professional like P&A to manage their 401k account for them while utilizing investments that aren’t on the core fund lineup.  A fourth option is a more customized approach based on a participant’s current financial situation and where they’d like to get to.  This option considers risk tolerance, personal savings goals, time until retirement, projected income needs during retirement, as well as any outside assets they may have.
  5. Increased participation rates – From automatic enrollment and on-site education for participants to RetireReady Tracker reports for plan sponsors, Standard provides many tools that can help lift the participation rate of a plan.

Even if you have a long-standing relationship with your current 401(k) plan provider, the Department of Labor wants to see you have a prudent process for monitoring plan costs and conflicts of interest.  With the following four pieces of information, we can provide you with a simple cost/benefit comparison at no cost or obligation to you. 

  • Your plan’s current fund lineup/fund options
  • How the total assets in your plan are divvied up between these investments
  • 408(b)(2) fee disclosure notice for your plan
  • Plan adoption agreement or summary plan description (SPD)

Whether you’re a participant, plan sponsor, or on your company’s retirement plan committee, here are ways you can Control Your 401k Fate.

 

More details about our offering:

As we mentioned above, a company retirement plan has three distinct roles.  By separating these and making each transparent in terms of fees and responsibilities, it’s our hope retirement plan administrators and committees will see the value we bring to the table.  Here are the aforementioned three pieces to the P&A retirement plan offering:

Pittenger & Anderson – your plan’s investment advisor

P&A will select the mutual funds for your retirement plan, monitor them on an ongoing basis, recommend any fund changes, and meet with the business owner(s) and/or your retirement plan committee on a regular basis.

As an employer, you minimize fiduciary responsibility for investment choices when you appoint an investment advisor who meets ERISA’s definition of a “prudent expert” to select investment options.  By making such an appointment, you effectively transfer the responsibility for documenting the selection of investment options and for defending those decisions to the advisor.  P&A and Standard Retirement Services will fulfill the role of the fiduciary as it relates to investment selection and monitoring and can serve in either a 3(21) or 3(38) fiduciary capacity.

Standard Retirement Services – your plan’s administrator

Standard services over 3,000 retirement plan clients with $18 billion in assets and 350,000 participants.  They design, install and administer the following types of retirement plans: 401(k), 457, Money Purchase, Cash Balance, and Defined Benefit.

Standard reduces your administrative burden by:

  • Serving as ERISA 3(16) Delegated Administrative Fiduciary Services when the plan’s full-service administrator
  • Simplifying payroll submission
  • Doing year-end compliance and safe harbor testing
  • Determining eligibility
  • Distributing required participant notices including enrollment booklets, eligibility alerts, summary plan description (SPD), quarterly participant statements, automatic enrollment notices, safe harbor notices, summary annual reports, annual disclosure of plan fees
  • Approving loans, distributions, and hardship withdrawals
  • Measuring an employer’s workforce readiness for retirement
  • Offering plan participants interactive online planning tools and in-person investment education

In addition, Standard will be your primary point of contact for administrative matters, as well as ongoing education and enrollment support.

Charles Schwab – your plan’s custodian

Pittenger & Anderson has been working with Charles Schwab since our firm’s founding in 1995.  As an independent custodian, Schwab holds your plan assets, provides us with a daily download of account activity, and executes nearly all of our client trades.  Schwab’s platform offers us access to a wide range of non-proprietary stock and bond mutual funds, as well as a self-directed brokerage account option for participants who wish to self-direct or hire P&A to manage their 401k account for them.

If this discussion resonates with you, let’s continue the conversation…

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