Products March 20, 2017

Pentegra Introduces Report About Fiduciary Responsibilities

Pentegra Fiduciary SmartPath details each fiduciary role in a retirement plan and focuses on helping plan sponsors and advisers clarify the many nuances associated with fulfilling their obligations.
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Pentegra has introduced the Pentegra Fiduciary SmartPath, a report detailing best practices and strategies for business owners, plan sponsors and advisers to use to help navigate the shifting fiduciary landscape.

The report is designed to help understand fiduciary responsibilities and corresponding liabilities, and offers recommendations and guidance for managing these duties.

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Pentegra Fiduciary SmartPath details each fiduciary role in a retirement plan and focuses on helping plan sponsors and advisers clarify the many nuances associated with fulfilling their obligations, addressing some of the most important concerns of plan sponsors today. The report also tackles why outsourcing these responsibilities may be the trend of the future.

Pentegra notes that retirement plan administration and the oversight of plan assets involve complex processes laden with compliance burdens. For many plan sponsors, the level of self-education and the commitment of time and energy required to effectively fulfill their fiduciary duties is an unwelcome concern that too often distracts from the more critical responsibility of running a business.

“Today, business owners, plan sponsors and advisers are extremely concerned with the changing regulatory landscape and overall plan administrative burdens. There is a strong desire to reduce workloads, fiduciary liability and risk. They want retirement plans to deliver successful outcomes for the sponsor as well as the participant. Our new tool, the Fiduciary SmartPath, is an invaluable resource at a very important time in the industry,” says Rich Rausser, senior vice president at Pentegra,

As part of the launch of the Fiduciary SmartPath, Pentegra will present a free PENTalk webinar on this topic Tuesday, March 21, 2017, at 11:00 am EST. Click here to register. To view the Fiduciary SmartPath click here.

Data & Research March 20, 2017

Plan Quality Varies Significantly By Industry

The generosity and functionality of a retirement plan tends to vary quite a lot according to the type of employer and industry. 
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The second annual 401(k) Plan Benchmarking Report from ALM Intelligence/Judy Diamond Associates finds a clear “disparity between the quality of 401(k) plans in white-collar and blue-collar industries.”

Similar to conclusions drawn by the latest PLANSPONSOR DC Survey, the benchmarking report suggests “there are meaningful differences in the amount of retirement income a worker can expect to earn based on their industry and the size of their employer.”

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“Micro-sized companies with between two and 10 employees tend to have higher account balances and more generous employer contributions than any other size cohort we looked at,” researchers report. “This holds true across industries, though there is also a correlation between white collar industries and average account balance. People who make more are, simply put, capable of saving more.”

The analysis shows, after ranking industries using a variety of criteria, Certified Public Accountants, as an industry, had the highest median plan score, while the legal and insurance industries had the second- and third-highest scores, respectively.

“The educational services industry was ranked last, followed by accommodation and food services,” the report says.

Looking broadly at the 401(k) landscape, median participation rates among 401(k) plans “in a broad spectrum of industries are fairly good.”

“None of the 26 examined industries has a median participation rate of less than 86%,” the report suggests, “indicating that the majority of employers understand the necessity of encouraging employee participation in their 401(k) plans.”

The report is based on 2015 plan-year data, and “as in 2014, the average 401(k) plan rate of return did not vary significantly based on employer size or industry.” Researchers say this finding is “encouraging, because it suggests that most employers offer good-quality investment options.”

Interestingly, the analysis shows 401(k) plans in the financial advice/investment activities industry have the second-lowest median rate of return. At the same time, plans offered by consultants have the lowest median employee longevity among the 26 surveyed industries.

“This suggests that many consultants are moving between firms, or starting their own companies and then returning to larger firms after a few years,” the report says.

Information about obtaining ALM Intelligence/Judy Diamond Associates research is available here. 

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