PODCAST | Responsibilities of Fiduciaries and Service Providers for Creating a Successful Retirement Plan [Part 2]

Published on: 04/09/2019 By: Gorfine, Schiller & Gardyn

In part two of the GSG and Greenspring Advisors podcast series, Scott Rodgville and Matt Cellini discuss the value that various service providers offer for making a successful retirement plan.

As the landscape of retirement planning evolves, so does the role of a service provider. Developing a successful retirement plan requires assembling a great committee. Generally, this includes the following:

  • Recordkeeper and/or Third Party Administrator (TPA) – Ideally, your recordkeeper will offer one solution and also handle administrative work (website, participant statement, plan testing, 5500 preparation, audit support).
  • Auditor – With intensifying scrutiny on the auditing function, you’ll want to find a firm that specializes in benefit plan audits. This function is particularly important because it detects any errors or mistakes that are occurring in the plan.
  • Legal Counsel – Choose an ERISA attorney that focuses solely on plans that are generally governed by ERISA.

How do you get started building an engaged committee? A fiduciary advisor can help provide clarity in the selection process.

To start, vendors should be “open architecture” meaning that they don’t have any proprietary fund requirements. A fiduciary will also prefer recordkeepers who provide fixed fees.

Technology has also contributed to the service provider selection process. With the transformation of technology, most successful recordkeepers are able to engage participants at a level outside of simply sending a statement. Technology allows recordkeepers to explain how a statement translates to monthly income and retirement.

A fiduciary will look for recordkeepers using a mobile application to deliver investment information. With the use of a mobile application, participants have the ability to access real-time information. This is especially important for participant engagement.

Lastly, there needs to be strong governance. The retirement plan provider must have the ability to interface well with the fiduciary advisor.

A great retirement plan is executed by a highly enthusiastic committee focused on its participants retiring with dignity.

If you have any questions about the service provider selection process, please contact us today!

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