Deals & People August 8, 2017

Vanguard Partners With Newport Group on 403(b) Recordkeeping

For plan sponsors, benefits include improved recordkeeping and reporting, online plan management capabilities and enhanced client support, Vanguard says.

Reported by

Rebecca Moore

Vanguard has decided to outsource recordkeeping for certain 403(b) plans to The Newport Group.

According to Vanguard, the partnership with Newport Group involves small-market 403(b) Employee Retirement Income Security Act (ERISA) plans as well as non-ERISA plans.

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“Vanguard has a history of working to provide 403(b) participants and plan sponsors with the tools and resources necessary to help them achieve success. By working with Newport Group on recordkeeping services, Vanguard is able to provide plan sponsors and participants with a variety of new and improved services/features,” the firm told PLANADVISER.

By working with Newport Group on recordkeeping services, Vanguard is able to provide plan sponsors and participants with Roth contributions, loans and an enhanced web experience. Participants will also gain access to Vanguard’s ultra-low-cost Admiral Shares. The Admiral Shares of Vanguard Total Stock Market Index Fund feature an expense ratio of 0.04% compared to the 0.15% of Investor Shares.

Vanguard adds that plan participants will continue to see transparent fees and low costs, including no loads, commissions, surrender fees, and no asset-based administrative fees. Clients will now pay a flat $5 monthly fee, which eliminates a per fund fee that was charged previously, as well as peace of mind knowing they aren’t charged when they take a distribution from their account.

For plan sponsors, benefits include improved recordkeeping and reporting, online plan management capabilities and enhanced client support.

In the partnership, Vanguard will primarily provide investment-management services, but continue to work closely with Newport Group to ensure a positive client experience for both participants and plan sponsors.

Current participants began receiving communications regarding the partnership with Newport Group, as well as information about new and enhanced plan benefits, last month, Vanguard says. It expects to transition all clients throughout the remainder of this year.