401(k) plan rules are changing

The Department of Labor’s impending fiduciary rule increases the responsibilities for overseers of 401(k) plans, and as a result is creating a tidal wave of changes in the industry.  In fact, it’s forcing some plan providers out of the business because they don’t want to be held to a fiduciary standard.  We’ve had clients ask if we offer 401(k) plans, and the answer is, yes, we do.  If you’re a business owner, partner, or company plan administrator, this may be of interest to you.

P&A’s core values are collaboration, transparency, independence, and communication.  Since 1995, we’ve partnered with Charles Schwab as custodian for our clients’ assets because they share our values.  For the same reasons, we have developed a relationship with Standard Retirement Services, a third-party administrator and retirement plan provider with over 80 years of experience.

Combining the strengths of P&A, Standard Retirement Services, and Schwab, we are separating the roles of advisor, administrator, and custodian.  Doing so results in a fully transparent relationship in which all fees are clearly understood and your best interests are being served.  We’ve found our retirement plan offering is ideal for plans with $2 million to $25 million in assets, although these aren’t hard numbers.

Here are the primary benefits to utilizing P&A’s offering for your company retirement plan needs:

  1. Transparency of fees – Standard Retirement Services’ pricing is very competitive, given the high level of service and value they provide. All plan fees will be listed individually on one page, fulfilling on P&A’s promise of complete transparency.
  2. Reduced administrative 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.
  3. Greater fiduciary protection – 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. P&A is also held to, and embraces, the fiduciary standard.
  4. Cost savings – Many mutual fund companies pay 401(k) plan providers to use their funds in a plan. This is known as revenue sharing and the result is that it increases your plan cost and creates conflicts of interest.  Standard Retirement Services returns any revenue sharing to your plan, which reduces your cost and alleviates conflicts of interest.
  5. Self-directed account capability – Our offering allows plan participants the option to invest on their own or they can hire P&A to custom manage their monies.

Even if you have a long-standing relationship with your current 401(k) or 403(b) plan provider, there is power in validating that relationship and assessing whether a change is appropriate.  With the following four pieces of information, we can provide you with a simple cost/benefit comparison and proposal:

  • 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)

Most importantly to you, having P&A put together a proposal for your plan fulfills your fiduciary responsibility and documents you are doing your due diligence.  In the end, whether you go with our offering or use it to validate your current provider, we have added value, and that’s always our goal.  For information about pricing and further details, please call and talk to Trey, Jon, or Blake.

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Since 1995, Pittenger & Anderson has guided individuals and families going through money-in-motion events. We are a fee-only Registered Investment Advisor and a full-time fiduciary providing investment management, financial planning, and complimentary services to 700+ clients in over 30 U.S. states.

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