Products February 8, 2016

Money Intel Jumps into Small-Plan Market

Money Intel announced the launch of a 401(k) platform specifically designed for small- and medium-sized businesses and their employees.
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A new 401(k) platform launched by Money Intel seeks to provide an “easy and inexpensive” solution for small-businesses looking to offer retirement benefits.

Financial advising for the plan sponsoring company’s employees comes standard on the platform, according to Money Intel. Further, the platform “takes the responsibilities associated with implementing a 401(k) plan off the company’s shoulders by automating the entire process.”

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According to Money Intel, the platform delivers pricing that is “less than one-fourth the cost of traditional insurance and payroll companies.”

Key features of the platform include payroll Integration; full-service plan administration, including signing and submitting all retirement-related government forms such as the Form 5500; full scope 3(21) fiduciary protection; and employee financial advising across the board.

The firm suggests its “innovative software-based approach” allows it to offer clients “a flat fee of $1,500 regardless of headcount, over 80% lower cost than traditional providers.”

“The average fees charged for employees at small companies are 1.3% of assets per year while those at the largest companies are just 0.60% of plan assets per year,” explains Monte Malhotra, co-founder and CEO of Money Intel. “We hope to help every small business offer a Fortune 500 quality 401(k) plan at pricing that is only offered to the largest companies in the world.”

More information about Money Intel’s 401(k) platform is here. 

Data & Research February 8, 2016

Segal Charts the Multiemployer DC Plan Market

The firm says multiemployer DC plan trustees can benchmark their plans against Segal’s client database.
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The predominant plan design for multiemployer defined contribution (DC) plans is a profit sharing plan, according to Segal Consulting’s Study of Multiemployer Defined Contribution Plans.

Less than one-quarter (24%) of multiemployer DC plans offer a 401(k) feature, and 23% use a money purchase plan design.

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When looking at administration, which excludes contributions because those are always handle by the fund office, 57% of plans are self-administered by the fund office. Nearly one-third (32%) of plans use a service provider such as a recordkeeper or third-party administrator (TPA), and for 11% administration is shared by the fund office and service providers.

For 52% of multiemployer DC plans, investments are trustee-directed, while the remainder (48%) are participant-directed.

Hardship-withdrawal provisions, which Segal says can only be offered by profit-sharing plans, are more common than loan provisions. Fifty-eight percent of plans permit hardship withdrawals, and 35% permit loans.

“Given the increasing importance of defined contribution plans as a supplement to defined benefit plans, trustees have an opportunity to examine the several different DC approaches that can further ensure participants’ retirement readiness,” says Rick Reed, director of defined contribution at Segal Consulting.

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