Our service process is ongoing and in each area we regularly help the plan sponsor by providing the tools to evaluate the topic so that a prudent plan of action can be initiated and we document and monitor the process. We view it as our responsibility to help you keep your plan running as smoothly as possible and to be there as a guiding partner in the stewarding role you serve to your participants and to assist you as needs and circumstances change.
There are many aspects to consider in assessing the overall health of a plan sponsor’s self directed retirement plan. Measuring the design of the plan against the plan’s objects, assessing how participants are engaging with the plan are just a few of the things to consider. We assist the plan sponsor in benchmarking the various aspects of the plan with plans of sponsors of similar size and makeup; benchmark the various service providers, including ourselves and report the findings to the plan sponsor. We assist the plan sponsor in the education of the investment committee and its duties to the plan. Finally we document the entire process.
The plan’s offering of investment options is often referred to as the core menu of investments from which participants make individual choices. Normally the plan sponsor is responsible for picking appropriate investment options, monitoring those investment options on a regular basis, and making changes to them when it is prudent to do so. Several factors should be considered in this process, including performance, risk and the cost of the various investment options offered to the plan participants. Appropriate benchmarks and measuring tools need to be utilized. Since most plan sponsors have little experience or expertise in this area, we assist in one of two ways. When we serve in a 3(21) investment co-fiduciary fiduciary capacity, we do the heavy lifting in advance of meetings with the plan sponsor by preparing a list of investment options from which the plan sponsor chooses. We monitor those options and report our results quarterly to the plan fiduciaries. If, however, agreed upon by the plan sponsor, we will serve as the 3(38) Investment Manager. In this role we take on complete fiduciary responsibility for the selection and monitoring of the investment options offered and report our results quarterly. This adds an additional layer of fiduciary protection to the plan sponsor and those in the organization that have been appointed to participate in the management of the plan. In either case we also assist in the preparation of an Investment Policy Statement for the plan.
The plan sponsor has a fiduciary duty to provide education to plan participants on the retirement plan. We assist in a number of areas in this regard. We provide education on aspects of retirement planning, explaining the different possible sources for funding retirement including the important role of social security. We discuss the tax advantages of these types of plans, the advantages of starting as early as possible and the importance of sticking with a process over time.* We explain the significance of what it means to be in a “self directed” plan and the importance of finding a comfortable way of having a properly allocated diversified retirement investment portfolio. We attempt to discuss the types of investment classes available to participants in understandable terms and the need to take time horizon and risk tolerance into consideration. Additionally, we educate participants on different aspects of the plan design such as matching or discretionary employer contributions and the meaning of vesting when it applies.
In summary, our service process is ongoing and in each area we regularly help the plan sponsor by providing the tools to evaluate the topic so that a prudent plan of action can be initiated and we document and monitor the process. We view it as our responsibility to help you keep your plan running as smoothly as possible and to be there as a guiding partner in the stewarding role you serve to your participants and to assist you as needs and circumstances change
*Securities America and its representatives do not provide tax advice.
Service process for each of the 3 key areas of plan management that is based on four actions that never change.