Plan Design

We design customized plans that work for you.

In my experience, establishing an effective defined contribution plan that matches your organization’s goals cannot be done by simply completing a few pre-filled, signature ready forms. Employer goals for a retirement benefit can vary greatly, from wanting to maximize owner contributions at the lowest overall cost, to wanting to incentivize employees to save a portion of their paycheck for retirement.

At Strategic Retirement Partners, we take the time to develop a unique profile for each client – including the organization’s goals and objectives, key employees, tax status and corporate budget – in order to get the plan design right the first time. Once we have developed a comprehensive profile, we focus our efforts on the 6 major design features that must be defined up front:

• Eligibility
• Compensation
• Contributions
• Vesting
• Distributions
• Participant Loans

The consequences of “15 Minute Plan Design” solutions can be devastating to both plan sponsors and participants. They include poor administrative solutions, expensive investment choices, unnecessary employer contributions and blurred fiduciary liabilities to business owners and plan trustees.

To simplify the process of plan design, Strategic Retirement Partners has created a Plan Design Checklist to ensure that your finished plan design aligns with your organization’s goals. We also use this tool to evaluate your existing plan to determine whether your current plan documents need to be amended or changed.

Investment Selection & Monitoring

An experienced investment adviser can add significant value to your plan!

The initial investment lineup chosen by a plan and the ongoing due diligence and monitoring of those investments are critical components in satisfying the fiduciary responsibilities of the employer and determining the long-term retirement outcomes of plan participants. Plan sponsors should clearly understand what is expected in the prudent exercise of their investment responsibilities. And perhaps more importantly, they should have the documentation in place to prove it. Many fiduciaries are unaware or confused as to their responsibilities, and, as a result, are personally exposed to significant legal liability. Being unaware of these responsibilities is not a valid legal defense.

At SRP, we believe that hiring an experienced, registered investment advisor as a co-fiduciary is not only a prudent strategy for most plan sponsors, but has been proven to enhance the investment performance and retirement outcome for participants. An experienced adviser can assist you with creating a written Investment Policy Statement (IPS), which will define eligible investment classes, policies and processes that should be implemented in regard to your plan. Careful research and analysis should not only identify the specific asset classes to be included, but also document minimum performance and estimated risk parameters. Only after the Investment Policy Statement is completed is a specific plan lineup selected. Finally, plan investments are regularly monitored against agreed performance and fee benchmarks appropriate to that asset class.

Unfortunately, this disciplined process is often the exception rather than the rule for many small to mid-size retirement plans where plan lineup decisions are limited to those selected by the record-keeper or TPA. In many of these cases, plan investments contain hidden 12b-1 fees and other revenue sharing arrangements favorable to a vendor or associated vendor partners. Use of more expensive share classes is a common issue that we often identify with these plans and is a common factor in many legal actions against employers.

Regardless of whether you hire SRP or an experienced financial advisor to assist you with your investment responsibilities, we will provide you with a complimentary evaluation of your current plan investments based on performance, fees and estimated risk and recommend the documentation you need to reduce your fiduciary risk.

Cost Analysis & Fees

We make sure that your fees are reasonable based on the services provided.

The issue of fees is an important consideration in the design and implementation of a healthy and successful plan. While acknowledging that there are certain plan services that are worth paying for, plan sponsors have an ongoing obligation to make sure that fees which are charged to participants of a 401(k) plan are reasonable. Recent guidelines issued by the Department of Labor require annual disclosure of all plan fees and expenses, both to plan sponsors and participants. In theory, these developments should have made fees much more transparent than in the past and also created compression by providers whose fees were excessive. In reality, many of these mandatory fee disclosure reports issued by providers (insurance-based providers in particular) remain complicated and confusing. This results in hidden fees as well as plan sponsors and participants who still do not have a clear understanding of their overall fees, much less an understanding as to whether these fees are reasonable.

Strategic Retirement Partners will provide a complimentary analysis and summary of all of your current plan’s fees and expenses. We include in this analysis fees charged by providers for administrative services and investment management and advice. Except for asset custody, the level services provided by administrative providers scale with employee headcount – not assets. As a result, it can be easy to overpay providers who provide administrative services where fees are based on plan assets. As for providers who provide investment management and advice, we examine closely whether those fees are for active management or based on an indexed strategy and benchmark them based on their relative performance.

The result of our analysis is the calculation of an “all-in-one” fee ratio that can be compared to plans of a similar asset size and participation rate. This ratio makes it much easier to benchmark objective fee comparisons and to document whether the overall fees of your plan appear to be reasonable. We believe that the ongoing monitoring and documentation of your plan providers and investments is of significant importance in the prudent execution required in your fiduciary role. Perhaps more important, even a small reduction in fees can result in increased returns and perhaps hundreds of thousands of dollars in increased retirement balances for participants over the longer term.

Fiduciary Guidance

We help you understand and implement your critical role as a fiduciary.

Strategic Retirement Partners, LLC is licensed in the State of Washington as a Registered Investment Adviser and is held to the highest, legally enforced standard of care in regard to our services. The rules and regulations for qualified defined contribution plans such as 401(k) are specific and comprehensive. We work with plan sponsors and trustees to help them understand what is expected in their role as a fiduciary. This would include prudent investment processes and documentation as well as disclosure of business relationships or other potential conflicts of interest that may compromise plan decisions. We also monitor annual fee disclosures and benchmark plan investments based on performance, risk and fees. Finally, we provide guidance in regard to plan communications and required disclosures with participants to insure ERISA compliance.

Provider Search

We save you time and money when comparing provider options for your plan!

The reality is that there are hundreds, if not thousands, of provider options available to sponsors of small retirement plans. For most plans, this would include choosing record-keepers, third party administrators (TPA), plan custodians and investment advisors. The costs to terminate and replace these providers can be significant and often an inconvenience. SRP will provide essential information regarding services, fees, quality standards and fiduciary status to assist you in selecting the best providers for your plan based on your specific needs.

When you work with SRP, we will assist you with these sometimes challenging and time- consuming decisions to ensure that you have not only highly qualified providers, but that their fees are reasonable based on similar services and fees offered by others. The fact that we make our recommendations based on multiple factors, not just pricing or fees, assists you in your fiduciary role of making sure that the plan is being administered in the best interests of all participants. And it is a significant savings of time and value added for our clients.

Participant Communication & Education

How is the plan actually working for your key employees?

Employee participation and average deferral rates among participants are the ultimate test of a successful retirement plan. In my experience, these measures are largely determined by three factors: proper plan design, the quality of plan investments and the ability of the advisor to communicate and educate participants with critical investment concepts such as the power of compounding returns, proper diversification and quantifying market risk. Based on your needs, we can provide various tiers of service based on allowing participants frequent access to investment education and helping them make informed, intelligent decisions based on their unique personal circumstances.

Helping employees to develop a personalized investment strategy that aligns with their risk profile and long-term goals not only increases the probability of successful retirement outcomes for participants, it can pay huge dividends to employers with increased productivity, employee retention and corporate profitability. It is also an important competitive advantage in attracting high quality future employees as your firm continues to grow.