If you are a plan sponsor of a 401(k) or 403(b) plan, do you want to:
- Improve outcomes for plan participants?
Sabino Investment Management, LLC provides investment funds which are frequently reviewed for performance, asset allocation, expense ratios, and other considerations.
We also provide advisor-allocated models for different risk profiles, along with a qualified default investment alternative. Many plan participants are not comfortable making asset allocation decisions. A common mistake of plan participants is to put all their funds into a single fund or cash equivalents rather than a diversified portfolio designed to meet long-term financial goals.
- Hire an independent investment advisor who is not limited to using funds from a single provider (and reduce your litigation risk)?
WARNING: If you are not currently doing this now, you are creating a potential liability. This article provides a good summary of some of the issues: https://401kspecialistmag.com/how-to-address-the-major-risks-of-proprietary-funds-in-401ks/
- Benchmark your investment funds properly for both performance and operating expenses?
Here is a good article written by R.L. (Dick) Billings, RF, CPC, CEBS, ERPA of FiduciaryWise, LLC – “Are You Benchmarking Your 401(k) Funds Correctly?”: https://www.linkedin.com/pulse/you-benchmarking-your-401k-funds-correctly-dick/
- Reduce your potential liability by delegating the investment responsibility to an investment advisory fiduciary as described in ERISA Section 3(38)?
WARNING: Some financial advisors claim to do this but will not acknowledge a fiduciary responsibility in writing. If you have a written agreement with an advisor, please read it carefully.
- Improve the quality of financial education for plan participants?
We are committed to financial literacy and can provide a free PDF version of the book, Investment Strategies for Tortoises.
Third Party Administration and Recordkeeping
Our working partner for third party administration and recordkeeping is PCS Retirement, one of the nation’s largest comprehensive and conflict-free retirement recordkeepers. PCS has an affiliate, AdvisorTrust, Inc., that can serve as an ERISA 3(16) fiduciary to reduce your litigation risk. Their website: https://advisortrust.com
PCS has approximately 300 employees that provides recordkeeping services to 16,000 plans and 750,000 eligible participants representing more than $23 billion in assets under administration. PCS Retirement has the following achievements and certifications:
- Certified for Best Practices by the Centre for Fiduciary Excellence (CEFEX).
- “AAA” rating from Roland/Criss for Superior Quality Plan Management.
- Recognized as “Best in Class” by Plan Adviser Magazine for 1) Participant Call Center, 2) Service Responsiveness, and 3) Staff Consistency.
- SSAE 16 Type 2 Certified
- Recognized by Inc. 5000, an exclusive ranking of the nation’s fastest growing private companies, as one of the fastest-growing companies in the nation every year since 2007.
Charles Schwab is the preferred custodian for PCS. There are no transaction fees at Schwab for 401(k) plans. There is an annual platform fee of 0.05% of plan assets, subject to a $400 minimum.
We encourage you to visit the PCS website at www.pcs401k.com.
ERISA 401(k) or 403(b) “CEO,” aka Section 402(a) Named Fiduciary
ERISA allows plan sponsors to delegate many responsibilities to a “named fiduciary” who also takes on much of the fiduciary risk. If you do not have the expertise or time to manage all of the tasks involved for the proper control and management of a 401(k) or 403(b) plan, we encourage you to consider an ERISA 402(a) fidcuciary. R.L. (Dick) Billings, RF, CPC, CEBS, ERPA of FiduciaryWise, LLC explains why in this article – “The Case for Hiring an ERISA 401k Plan ‘CEO’ “: https://401kspecialistmag.com/the-case-for-hiring-a-erisa-401k-plan-ceo/
FiduciaryWise, LLC is an independent Section 402(a) named fiduciary and can also serve as a Section 3(16) plan administrator. Their website is at https://fiduciarywise.com/
FREE Plan Evaluation for Plan Sponsors
If you are a plan sponsor and would like a free benchmarking comparison and efficiency analysis, please contact us to begin the process. We will need the following information:
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- 408(b)(2) plan level fee disclosure;
- List of investments that are offered to your participants;
- Allocation of funds among your plan’s investment options.
E-mail to Robert G. Kahl: RGKahl@SabinoIM.com or call (520) 233-7613 if you have any questions.
What to Expect if Your Plan is Audited
Federal oversight of 401(k) plans is essentially divided between the Internal Revenue Service (IRS) and the Department of Labor (DOL). The IRS oversees the qualified status of 401(k) plans and issues determination letters. The DOL oversees fiduciary standards, reporting and disclosure requirements, and all other rules that do not affect the qualified status of 401(k) plans. Audits are generally random but can also result from information submitted on the Form 5500 or employee complaints. So, what should you expect if your plan is selected for an audit? Generally, you will be sent an initial letter by the IRS or DOL looking at the following items: https://tra401k.com/checklist-dol-plan-audit/