Let’s go TPA and Recordkeeper shopping. Sounds fun, right!?
No plan sponsor (that’s you!) thinks building a 401k is fun. Because there are so many choices to fit the opportunity, it’s important to rely on an experienced financial advisor who is highly engaged in the plan design. For diverse employee groups, it’s more likely that you build an imperfect plan, so it’s important that your advisor also stays engaged to help you fine-tune the plan and keep expenses under control.
What does Memphis Planning and Wealth offer?
Our 401(k) consulting service is fee-based and implies no obligation to utilize us as the advisor of record. We thoroughly evaluate your current plan OR help you build one from scratch that fits your needs. After a complimentary discovery call our terms of engagement and fees are agreed upon up-front. Our process ensures your plan has a modern design and that your fiduciary duty is being met for the lowest cost structure possible.
As part of this service, we will deliver:
- Our proprietary analysis showing the cost of your current plan versus other competing, best-fit recordkeepers.
- If this is a new plan, we will present a comparison of plans that we believe are the most attractive options for your employee group.
- The analysis will illustrate for the next ten years the itemized costs of each option using a given growth rate of the total plan assets.
In the event you will be replacing your advisor we may choose to waive or decrease the fee. Of course, if your plan is in a good spot you will not pay any fees as our discovery process is complimentary.
Should you decide to utilize us as your new advisor on the plan, we proudly utilize Standard of (K)are in an effort to help you remain compliant with auditors and regulators.
Frequently Asked Questions
I have a 401k already, how do I know if I have a problem?
Plan sponsors and advisors should have at least annual meetings to discuss the plan design, investment options, and fees. If your participation rates are low, you may have an unhealthy plan that you’re paying too much for. Conversely, if your plan is growing rapidly and you haven’t seen your advisor in years, you could be paying an increasing amount of money for no value. In this case it may be important to revisit the plan fees and structure with an alternate advisor, and we do that.
In the case of an orphaned plan, you have the opportunity change your fee structure AND advisor with a very short form, even if it makes sense to retain your TPA, recordkeeper, and payroll provider. All the relationships can usually be replaced individually without sacrificing the components of the plan you still value.
We can serve as the investment fiduciary and help you bundle or unbundle TPA and recordkeeping services by Nationwide, PenServ, Fidelity, T. Rowe Price, American Funds, and Empower, just to name a few.
My 401(k) is bundled with payroll. What can I do?
Separating duties is one of the ways to give yourself pricing leverage and an upgrade in your plan advisor. If you’re bundling your 401k services with your payroll provider, you can unbundle and choose us to serve as point-person for the selection of separate TPA and recordkeeping functions.
If this puts you at odds with your payroll provider, we can provide referrals for local and national payroll vendors who integrate well with separate recordkeepers. The good news is the competition for your business usually results in significant discounts and a higher-touch experience. Doing away with call centers and remote advisors is always a win.
Plan Design Changes? What am I missing?
Just a few examples:
- Company match and vesting schedules may not offer the proper incentives or provide safe harbor,
- Life is expensive! You may want to begin offering hardship withdrawals.
- Consider adding a Roth savings vehicle within the plan. Old plans typically don’t have them, and we view that as a sign of neglect.
- We commonly see that highly compensated employees are being throttled on their contributions, and this is where a good TPA may be able to show you a better way to design the plan. If, based upon your employee group, it’s impossible to design a plan that enables contributions up to the limit, it may be time to add a non-qualified incentive plan, which we can help with.
- Investment options may need to be modified. Too many overlapping and redundant choices, not enough income options? Do you have any real estate, dividend-paying stock, or emerging markets options? Is there any indexing in the mix?
- Adding a profit-sharing component to your existing plan. This will enable more tax-deferred savings!