Compliance January 28, 2009

Unions Cannot File Grievance over 403(b) Changes

Whether unions representing Minnesota District 861 teachers and paraprofessionals can legitimately file a grievance over 403(b) plan changes is under debate.
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The Winona Post reports that the teachers union and paraprofessionals union each have asked for arbitration after former school board chair Brian Neil informed them the grievances they filed are not appropriate. The unions’ complaint is over the reduction of 403(b) plan providers from 23 to five, effective January 1.

Neil told the unions in a written response to their grievances that the matter is not open to arbitration or grievance because it is an issue not governed by union contracts, according to the Winona Post. An arbitrator will be asked to determine if the issue is or is not a contractual issue.

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The unions say they do not like the change and are challenging the district’s authority to create a bidding process and narrow the list of providers, regardless of its motives to save employees money. District consultant Aaron Casper explained that by narrowing the list of providers, companies bid competitively for the business resulting in lower fees and more fee transparency for participants, the news report said.

The five top bids came from Merchants Investment Services (Goldleaf Partners), ING, Fidelity Investments, AIG Retirement, and Educators Financial Services. Union officials did not say which vendors they want to use that did not make the cut.

Products January 28, 2009

Web-Based Tool Helps Advisers Perform Roth Conversion Analyses

Convergent Retirement Plan Solutions, LLC, and Archimedes Systems, Inc., released the Roth IRA Conversion Optimizer for financial advisers.
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The product is the first release on a new Roth analytics platform, according to a press release. Convergent, based in Brainerd, Minnesota, and Archimedes Systems, based in Waltham, Massachusetts, said the joint development of the platform is “to support the anticipated upsurge in Roth activity projected to occur throughout 2009 and 2010.”

The Roth IRA Conversion Optimizer is set for release in the first quarter. A release of a consumer-oriented version is scheduled for the second quarter of 2009, the companies said.

“Advisers who are positioned to perform sound Roth IRA conversion analyses will have a distinct advantage in the marketplace,” said Ben Norquist, president of Convergent.

The release said the tool will assist the adviser and the consumer in determining the optimal conversion amount, based on each investor’s unique income needs and financial legacy objectives.

Both the adviser and consumer versions of the Roth IRA Conversion Optimizer will be available in a branded, turnkey format, as well as in a fully customized format. In addition to those decision-support Web tools, Convergent will also offer a suite of Roth-focused business development tools, including adviser and consumer workshops, slide calculators, and educational content, the companies said.

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