As an employer and sponsor of a 401(k) plan, your company has a fiduciary duty to its participants. This means you must select the appropriate service provider(s) at a reasonable cost, determine the optimal plan design provisions, choose and monitor investments, keep up with the new legislative changes, ensure your plan is administered properly, and educate and inform plan participants. The goal is to administer a retirement plan that inspires employees to reach their retirement dreams, while helping you recruit and retain valuable team members.
How do you know if your company is meeting these challenges? How do you select service providers or investments – what are the criteria? How do you know if your plan is working? Does your company have the resources to handle these responsibilities alone? How do you know that you are in compliance with the new fee disclosure rules?
Unless your company has dedicated employees with 401(k) expertise who focus solely on managing your employee retirement plan, you should consider hiring a fiduciary retirement plan advisor who specializes in 401(k) plans and is dedicated to helping you and your employees get the most out of their retirement plan.
Spectrum Financial Inc. is an Independent financial advisory service firm which means we work exclusively for you – not any company selling investment products. We provide full disclosure of all fees received and do not “sell” any products or receive any commissions. We are fully independent in making our recommendations to you and your employees. We accept full fiduciary status under ERISA Section 3(38) as advisor to your plan.
Maintaining an appropriate retirement plan for your company often seems like a daunting task, especially when you consider everything else that goes into running a successful business. In general, our value-added retirement plan services can be segmented into the following components:
1) Benchmarking your current 401(k) plan. We benchmark the fees, services and participation metrics of your plan against similar plans using industry leading research. This service satisfies the fiduciary obligations under both ERISA and the new 408(b)(2) fee disclosure rules. We then can make recommendations for any changes to your plan to reduce costs and improve service for your participants.
2) Performing plan design consulting. A review of the plan design is very important because plan design provisions can make a big difference in whether your plan maximizes the benefits available. These provisions address matching contribution formulas, cross-tested profit-sharing allocations, qualification and eligibility issues, and merger and acquisition situations. Spectrum Financial will work closely with the provider’s administration experts to ensure that all available aspects of plan design are considered.
3) Assisting in the design an Investment Policy Statement (IPS). As a plan sponsor, you can minimize your fiduciary liability by implementing an IPS. An IPS outlines a detailed, prudent plan of action for the plan’s investment managers and advisors to follow. It describes the plan’s investment philosophy, risk tolerance and long-term goals to help guide all decisions made regarding the plan. Because the IPS is in writing, it helps prevent misunderstandings between you and the plan’s advisors.
4) Providing ongoing plan reviews. We review your plan operational metrics such as participation levels, deferral percentages, loans, non-discrimination testing, enrollment and communication services. We also prepare performance analysis of investments utilized by the plan versus benchmarks and/or peer groups; monitor funds selected by the plan sponsor for style drift and correlation with fund investment objectives stated in the IPS; and provide regulatory and compliance updates.
5) Managing employee communication and investment education. We believe that coordinating enrollment meetings and providing ongoing investment education for participants regarding plan options is a valuable part of our service. That’s why Spectrum Financial will be available to your employees by phone and in person for individual consultation. If enrollment and/or education teams from the provider are necessary due to multiple company locations, we will coordinate those efforts. We also provide supplemental educational materials if desired.
6) Personal customized financial and estate planning for Employees. Finally, we can educate plan participants about plan distribution alternatives, provide retirement cash flow analysis, and, whenever necessary, consult with retirees regarding investment asset allocation.
We are paid exclusively on a fee only basis. Our 401(k) advisory fee is an asset-based management fee. These fees are normally paid from fees charged directly to the plan participants. Other types of compensation agreements that allow for payment from investment management or revenue sharing fees that are built into the pricing structure of a packaged product may lead to a conflict of interest. We do not accept any compensation from any third party or service provider, our only compensation is what is disclosed to the plan sponsor and participants in the form of our asset-based management fee.
When you work with Spectrum Financial Inc you gain a valuable advisory team and time-saving resource that will help you develop and maintain a solid strategy for your retirement plan. We are committed to providing you with the personalized attention and involvement that you want and need. Our goal is to help you manage your 401(k) plan properly and ultimately improve your employees “Retirement Readiness”.
For additional information about 401(k) plans, please call Peter Nelson at 828-328-9551 or email him directly at Peter@Spectrum-Financial-Inc.com
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