• Micheal Timperio

Are you getting the best value? A guide to reviewing your retirement plan

Updated: Nov 18, 2020

As an employer, you have a responsibility to your employees to conduct an annual review of your group retirement plan. Yet many employers are unsure when a plan needs reviewing, and what exactly needs auditing to ensure that their employees are getting the best value.

Reviewing your retirement program should start with an assessment of your current service provider. Ask yourself the following questions:

  1. Are the investment management fees all inclusive & competitive?

  2. Do investment performance returns meet expectations?

  3. Are service level standards being upheld?

  4. Is the program aligned with your goals?

Although many believe that the Management Expense Ratio (MER) is the only fee that is charged, there are many more layers of fees such as trailer fees, deferred sales charges, low loads and front-end loads that can eat away at the overall value of the portfolio. Hence, being made aware of hidden charges or commissions can save your employees money.

In addition to fees, performance results should be analyzed for overall and risk-adjusted returns. This means that the returns should meet or exceed the benchmark (standard against which the performance of the fund is measured), without taking on too much risk.

Moreover, maintaining a relationship with your retirement plan provider’s account manager also plays an important role in the success of your plan. Is your account manager in touch with you and your members on a regular basis? Are they meeting your service level standards? While semi-annual or quarterly meetings provide some structure, static timeframes become meaningless in relation to goals or changing circumstances.

Working with a provider who accommodates your schedule and desire to meet, ensures that your goals are in line with what your group plan offers your employees. Ask yourself if the retirement program is aligned with your overall vision. If engagement in the plan is low, or employees feel dissatisfied with the current offering, it may be time for a review.

Furthermore, a provider who is compliant with CAP guidelines and takes into account records maintenance and reporting requirements will take away the administrative burden, so you can focus on saving.

If you are looking to review your group retirement plan we offer complimentary assessments. The health check can help you improve your group retirement plan by:

  • Analyzing ways to lower or eliminate unnecessary fees

  • Offering ways to improve service levels for you and your employees

  • Assessing investment fund performance

  • Providing recommendations to ensure your plan adheres to the Capital Accumulation Plan (CAP) Guidelines

  • Assessing whether the best group retirement plan option is in place

Employers that regularly review their plans will ensure they are getting the best fees, performance and service. When you and your employee’s retirement future depend on the plan, shouldn’t you ensure you are getting the best value?

#RSP #PlanReview #RetirementPlan #Value #Fees #TrailerFees #Benchmark #MER #ServiceLevelStandards #PerformanceReturns #CAPReturns #CAPPlan #CAPGuidelines #CapitalAccumulationPlan #HealthCheck

8 views0 comments

Recent Posts

See All

More about Open Access

Tips & Resources

Follow Us

© 1997-2020 Open Access Ltd. All rights reserved.
Use of the Open Access Ltd. website constitutes acceptance of our Terms of Use & Privacy Policy.