Retirement Plan Advisors (RPA) is a federally registered investment advisor specializing in providing plan design and investment advice to employer-sponsored defined contribution retirement plans. Taking a comprehensive approach to plan design issues, we do more than simply analyze the individual components of your defined contribution retirement plan: We evaluate how all aspects of the plan fit together, in order to help you maximize benefits and value to plan participants.
RPA principals have over sixty-five combined years of direct experience designing, implementing and managing the day-to-day operations of defined contribution plans. Our practical experience provides unique benefits for our clients that often are not available from other consulting firms. In addition to the traditional contract compliance reviews and quantitative analysis of your investment options, we provide a “real world” participant-focused perspective based on experience we’ve gained actually running the day-to-day operation of defined contribution plans. This experience helps us answer the key question: How will these changes impact individual participants?
Our consulting approach is interactive. We strongly recommend the client be involved throughout the process. Your involvement ensures that the project remains focused on improving your investment menu, plan pricing, and service levels for the direct benefit of your employees. Our consulting services include:
An investment policy statement (IPS) serves several key functions, including reducing the employer’s risk and liability as a fiduciary by incorporating prudent investor rules. It clearly defines the investment objectives and constraints of your defined contribution plan. Moreover, the IPS will provide a structured and verifiable process to be applied to current and future investment menu decisions.
Additionally, the process of developing an IPS helps clarify the vision for the plan’s investment menu by addressing key questions such as “How many funds should we offer?”, “Which asset classes should be represented?”, “Should we offer actively managed funds, passively managed funds or both?”
Together with the plan sponsor, Retirement Plan Advisors, LLC (RPA), will develop an IPS for your plan. Overall, the goal of your IPS is to assure the Plan is administered in the best interest of the plan participants and is compatible with the overall mission and philosophy of the employer. Key components of a defined contribution plan investment policy statement include:
- Clarification of the Plan’s investment-related goals and objectives including the number and types of investment options to be offered
- A basis for making disciplined investment menu decisions over time
- Documentation of the investment selection process
- A framework for evaluating investment performance, including:
– Establish performance standards and benchmarking for the investment options
– Action plans in the event performance standards are not met over the specified time periods
– Establish timelines, including probationary periods, for selecting and deselecting funds
- Help the sponsor react to questions or requests for change generated by participants, vendors or the media
- Continuity in decision-making as staffing plan trustees change
The Investment Policy Statement should be reviewed at least annually and revised if needed. Revisions should be considered when:
- A Plan’s investment objectives or funding policies change
- New investment options are introduced in the marketplace
- There is a change in service providers or Plan administrators
- New investment managers or replacement managers are selected
- Performance evaluation guidelines have changed
- A Plan’s acceptable level of risk has changed
The process of identifying which funds to include as part of a plan’s investment menu involves multiple quantitative screens combined with qualitative judgments which allow us to narrow the field from thousands of publicly traded funds to the specific funds we ultimately recommend.
Our quantitative analysis of individual fund performance begins with measuring total return, risk-adjusted return and peer group ranking over 1, 3, 5, and 10-year time frames. Statistical measures include, but are not limited to, alpha, beta, Sharpe and Traynor ratios, drawdown, and standard deviation. Investment options are also reviewed for style drift, manager tenure, fund family history and fee structure.
Additionally, we review the overall investment menu from a broad market perspective to ensure reasonable representation across equity and fixed income asset classes as well as a broad range of investment objectives. Duplication among security holdings, styles, and strategies among money managers and mutual funds is also considered.
This process is repeated on a regular basis based on the criteria in the investment policy statement to ensure your plan investment menu remains competitive.
In the past, only large pension plans, endowments and other institutional investors were able to access professional money management services. With minimum investment requirements of $1 million or more, these services have historically been out of reach of the average investor. Not anymore.
The Retirement Plan Advisors PortfolioPlusSM program is a professional money management service specifically designed for employer sponsored defined contribution plans. With PortfolioPlusSM, participants can rest easy knowing that they have delegated the fund manager selection and ongoing monitoring of their account to investment professionals.
Additionally, as an optional service available at the participant level, PortfolioPlusSM provides plan sponsors with an elegant way to provide plan participants access to investment advice without incurring plan level fees.
In addition to our investment advisory services, RPA provides comprehensive plan oversight services. We offer our plan sponsor clients access to expert advice with a bias toward providing maximum participant benefits while limiting your fiduciary liability. Services include:
Contract Compliance
RPA will perform a “watchdog” function for plan sponsors that includes monitoring TPA and product provider(s) compliance with all contract deliverables including:
- Fixed account and/or stable value interest rate calculation and crediting
- Implementation of proposed transition plan
- Policy and Procedures Guide
- Recommendation for annual plan audits
- Depository/custodian bank procedures
- Participant account reporting
- Act as a liaison between the plan sponsor and the product/service providers
- Evaluate new offerings (funds, investment products and services) available in the defined contribution marketplace to meet the evolving needs and objectives of the plan sponsor
Plan Service Delivery
Plan utilization is a key determinate of the success of a defined contribution retirement benefit offering. RPA provides plan service delivery oversight including:
- Vendor staffing – level and qualifications
- Access points - Telephone, web-based, on-site
- Participant communications - statements, newsletters, web content, etc.
- Monitor/review participant complaints
- Monitor/evaluate effectiveness of employee education and investment advice delivery
Pricing
RPA will monitor the competitiveness of your plan’s fee structure within the marketplace. Special attention is directed toward the negotiation of reimbursement rates with mutual funds and subsequent revenue sharing arrangements. This is a critical element of plan pricing since all reimbursement fees received from the mutual fund companies directly offset recordkeeping expenses. Additional services include:
- Accuracy of fee formula and its application to participant accounts to provide true cost analysis at both plan and participant levels
- Product and TPA/recordkeeping fees
- Asset-based vs. per participant fees
- MVA or surrender charge negotiation/recovery
Request for Proposals (RFP)
RPA will provide consulting services to assist plan sponsors in retaining all needed plan products and services including a third-party administrator, a fixed and/or stable value provider(s), a self-directed brokerage account and managed account services. RFP services include:
- Write RFP/RFQ documents incorporating the client’s goals as well as regulatory, participant service, administrative and pricing objectives.
- Review and evaluate proposals submitted by service and/or product providers and provide the plan sponsor with information and/or recommendations with a bias toward providing maximum participant benefits while limiting your fiduciary liability.