TPA Alpha: A New Approach to Evaluating TPAs
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Newsletter Sponsor Participants Benefiting From Falling 401k Fees Just released and updated, the 401k Averages Book is the most recognized source for comparative, non-biased 401k average cost information. Use the 401k Averages Book to better understand the investment, recordkeeping, and revenue sharing expenses for all size 401k plans. It is designed to provide professionals with essential fee information to help their clients determine if their plan costs are above or below average. All data and charts have been updated for the new 17th Edition. Click here for more information. In This Issue
General Items TPA Alpha: A New Approach to Evaluating TPAs Abstract: What if TPAs were evaluated for value and performance in a similar manner as mutual funds? If so, determining a TPA's "Alpha" potential could be a great place to start. The firm that has the highest probability of delivering positive Alpha would be the most obvious and prudent choice. This article reviews how this evaluation could be conducted. Source: 401khelpcenter.com Helping Retirement Plan Participants Prepare for the Future Abstract: Selecting an education and/or advice provider is a fiduciary decision and should be made with all the care that any other fiduciary decision is made. By isolating the education process from the investment process, plan participants are receiving sound retirement education stripped of any sales motivation. It's up to the plan fiduciary to monitor the education program to ensure that it's not sales driven. Turning to an independent provider substantially reduces this risk. Source: Plantemoran.com 403(b) Plans Managing Critical 403(b) Issues Through Proper Allocation of Fiduciary Responsibility Abstract: Service providers are demonstrating their ability to customize their fiduciary services to their customers' needs and -- just as important -- to their own capacity to provide selected services where they feel they can add value. The complex nature of handling 403(b) plans make these plans uniquely suited to customized fiduciary services. Source: Businessofbenefits.com »» Click here for More 403(b) Material Fiduciary and Plan Governance Material Retirement Plan Best Practices: Plan Design Abstract: This 13-page paper helps plan sponsors navigate plan design decisions. It examines the factors that you should consider as a fiduciary when making decisions about plan design, looks at how other plans handle different options, and identifies some best practices. Source: Arnerichmassena.com The Misperception of Fiduciary Risk and Active Management in DC Plans: A Legal Perspective Abstract: Plan sponsors face increasingly complex fiduciary requirements, as well as pressure to provide an optimal plan experience for participants at a reasonable cost. Making investment selection decisions under these conditions can prove challenging. This white paper aims to help fiduciaries navigate the waters of plan investment selection and monitoring processes. Source: Troweprice.com 401k Fees -- Frequently Asked Questions by Plan Fiduciaries Abstract: If you're a 401k fiduciary, you don't want to be in the dark about your plan fees. The potential consequences for paying excessive 401k fees are too great. This FAQ will answer some of the most common 401k fee questions. Source: Employeefiduciary.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers Collective Investment Trusts - A Perfect Storm Abstract: Cost advantages and growing regulatory compliance requirements are making Collective Investment Trusts an important investment vehicle in the DC market. The characteristics that differentiated CITs from mutual funds are becoming competitive advantages, and their place in the retirement market is expanding to include even small players. This 28-page white paper can help you understand the increased opportunities CITs present to asset managers seeking a larger share of retirement assets. Source: ALPS Abstract: CITs are often less expensive to create and maintain. They may also be more flexible than their mutual fund counterparts given that they are subject to a different regulatory framework. While this may be a benefit to their fee structure, it can also be challenging because CITs are not broadly understood and often suffer misconceptions when compared to mutual funds. Source: Manning-Napier.com »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers Ranks of Fee-Based Advisors Expected to Swell Abstract: Despite the uncertain fate of the Department of Labor fiduciary rule, we already see advisors changing their business practices. According to Cogent's "The Future of the Financial Advisor" report, advisors earning at least three-quarters of their total compensation from asset-based fees could comprise half (49%) of all financial advisors by the end of 2017, up from 38% presently. Source: Marketstrategies.com 2017 PLANADVISER Micro Plan Survey Abstract: Micro-sized DC plans are those with less than $5 million in assets. Taken as a whole, the micro-plan market in many ways is large. This report summarizes provider service ratings in the micro-plan market. Source: Planadviser.com Small-Market Retirement Plan Advisers Face Big-Time Challenges Abstract: There are various aspects of a retirement plan that require ongoing review (i.e., plan design, participant communication and education efforts, recordkeeping tools, and services), but investments and fees continue to make headlines. While many of the cases featured in the news involve large plans, smaller retirement plans with less purchasing power face similar challenges. Source: Investmentnews.com (registration may be required) Court and Other Legal Issues Safeway Workers Advance Two Challenges to JPMorgan Funds Abstract: Grocery giant Safeway can't escape two proposed class actions challenging the fees and investments in its 401k plan, including its decision to offer JPMorgan target-date funds. Source: Bna.com (registration may be required) Eighth Circuit Sends Fund-Mapping Case Back to Trial Court to Redetermine Damages Abstract: The Eighth Circuit has weighed in again on the fund-mapping portion of this long-running case. Its latest decision affirms the trial court's determination that a fiduciary breach occurred, but reopens the question of damages because the trial court failed to consider any method for measuring the plans' losses other than the method suggested by the Eighth Circuit's previous decision. Source: Thomsonreuters.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC Abstract: A new tax reform proposal has surfaced that would impose a 15% tax on retirement accounts. More specifically, the proposal includes a new 15% tax on interest paid to tax-exempt institutions and retirement plans. Source: Asppa.org »» Click here for more on Legislative Actions Compliance and Regulatory Retirement Plan Examinations and Enforcement Programs on the Rise: Guidance for Plan Sponsors Abstract: It's no surprise that DOL and IRS investigations and audits are on the rise. In 2016, the DOL alone closed 2,002 civil and 333 criminal investigations. This article reviews some steps a plan sponsor can take to avoid or mitigate compliance issues before an audit is initiated. Source: Bsllp.com Avoid Overpaying User Fees for Your VCP Submission Abstract: The Employee Plans Voluntary Compliance function has noticed an increase in submissions with incorrect user fees. Many of these submissions include user fees higher than what is required. This announcement reviews some ways to avoid the overpayment of user fees. Source: Irs.gov »» Click here for more Compliance and Regulatory Material Marketplace News New Book on 403(b) Essentials Published Unified Trust Expands Plan Administration Services DST Launches Analytics-Based Web Dashboard for Plan Sponsors and Advisors PlanSource Product Release Features Mobile-Friendly Benefits Enrollment Voya Offers New Suite of Financial Planning and Education Resources »» Click here for More Marketplace News
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