Why Plan Sponsors Should Hire a Retirement Plan Consultant

Why Plan Sponsors Should Hire a Retirement Plan Consultant

Posted on by Editorial TeamLeave a comment

Many plan sponsors lack the expertise to effectively manage their retirement plan and fulfill their fiduciary obligations to plan participants without some outside assistance. This is where a retirement plan consultant can be invaluable. Plan sponsors rely on consultants to provide knowledge and expertise. No two plans are alike—and the same can be said of retirement plan consultants. Learn more about why plan sponsors choose to hire a retirement plan consultant, as well as a few of the questions you’ll want to ask if you’ve determined that you need one.

Read More
Creating an Effective Investment Policy Statement

Creating an Effective Investment Policy Statement

Posted on by Editorial TeamLeave a comment

Retirement plan sponsors aren’t required to have an Investment Policy Statement (IPS) for their plan. However, having a written statement in place can facilitate your organization’s plan meeting federal and state regulations and fulfilling the fiduciary duties of a plan sponsor and/or their committee. However, not all policy statements are created equal, and there are a few topics every IPS should cover. Learn about what should be included in an effective Investment Policy Statement and how a well-crafted IPS can lighten the load of a committee that’s tasked with difficult plan decisions.

Read More
A Closer Look at Funds and Fees

A Closer Look at Funds and Fees

Posted on by Chris GarrisonLeave a comment

Meeting Your Fiduciary Responsibilities

Managing a 403(b) plan isn’t easy. Since 2006, the Department of Labor’s regulation of 403(b) plans has become increasingly complex and time consuming. Recent regulations, in effect since 2012, are the fee disclosure regulations, which require schools to determine if the fees paid to investment managers and retirement plan service providers are “reasonable.” Unfortunately, the Department of Labor did not create a template or checklist for plan sponsors, so this interpretation is sometimes challenging.

Read More
Why Add ESG Funds to Your Investment Menu?

Why Add ESG Funds to Your Investment Menu?

Posted on by Editorial TeamLeave a comment

An increasing number of investors want impact-driven investment vehicles. They want to avoid investing in companies that avoid diversity and inclusion, abuse labor, produce products or provide services that cause health or safety problems, or pollute the environment. However, trying to bypass such companies can make investing in many mutual and index funds a challenge. Because of this, environmental, social, and governance (ESG) funds are increasing in popularity, especially among younger investors. According to a survey conducted by Callan Institute, incorporation of ESG factors into the investment decision-making process increased to 42% in 2019 compared to 22% in 2013. But is it cost-effective and a good fit to include ESG funds in your plan’s investment menu? Learn more about ESG and how you should proceed if you’re interested in adding ESG funds to your investment line up.

Read More
Considerations for Selecting an Index Fund Manager

Considerations for Selecting an Index Fund Manager

Posted on by Editorial TeamLeave a comment

Index funds are passive investments that are designed to mimic the makeup and performance of an underlying market index, such as the S&P 500, at a reduced fee level. According to the Investment Company Institute (ICI), a Washington, D.C.-based mutual fund industry research group, 36% of households in 2018 who owned mutual funds owned at least one equity (stock) index fund. A total of 497 index funds in 2018 had in aggregate assets more than $3.3 trillion. $156 billion in new assets flowed into index funds in 2018 (according to the ICI factbook), distributed as follows:

  • 40% invested in world stock indexes (i.e. FTSE 100–London, Nikkei 225–Tokyo, etc.)
  • 37% invested in domestic stock funds (i.e. NYSE Composite, Russell 2000, etc.)
  • 23% invested in bond or funds made of hybrid indexes (i.e. world and domestic stock funds)

As index funds remain popular among all mutual fund investors, and have grown in usage within retirement plans, it is important to understand the motivation for investors to make these investments. It is equally important to understand what decision-making framework must exist to select an index fund manager to manage investor’s expectations, balancing returns and risks.

Read More