Products May 30, 2012

J.P. Morgan Launches Plan Design Guide

J.P. Morgan Asset Management introduced a tool to help retirement plan advisers facilitate conversations with plan sponsors about 401(k) plan design.
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The tool, which is called the J.P. Morgan Plan Design Guide, helps advisers create road maps for plan sponsors regarding plan design. The guide is based on proprietary research—from a sample of 300 plans across a wide range of sizes—into the primary factors that influence plan design decision making.

The guide offers a more objective way to evaluate plan effectiveness relative to a precise group of peers with similar retirement plan preferences and characteristics, allowing plan sponsors to identify opportunities to improve participant outcomes via strategies that match their philosophy.

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“[Advisers] can use it actually as a leaping off point to do that kind of deep-diving analytics that plan sponsors value,” Donn Hess, head of product development at J.P. Morgan Retirement Plan Services, told PLANADVISER.

The tool leads advisers through a simple series of questions that help them understand the client’s strategy, find options around the plan structure and narrow the list of which options look best. The tool can be used both for current and prospective clients, Hess said.

“Retirement plan advisers play a critical role in encouraging plan sponsors to think and act strategically about plan design,” he said. “This tool provides a framework to enhance that conversation.”

The tool is being offered to all advisers, not just those at J.P. Morgan.  It is available online at https://www.jpmorganfunds.com/cm/Satellite?pagename=jpmfVanityWrapper&UserFriendlyURL=topic&topicId=1310480863755.

Data & Research May 29, 2012

Open MEPs Provide Fiduciary and Cost Benefits

Multiple Employer Plans (MEPs) bring expert fiduciary governance and economies of scale to retirement plans of all types and sizes.
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In the past few years, intensifying mid-2011, the pension community’s attention has been drawn to a plan type that has grown rapidly in popularity: open MEPs―those open to any participating employer, Pentegra Retirement Services notes in a white paper. (See “Strength in Numbers.”)

The paper explores a feared compliance risk―the concern that the Department of Labor (DOL) would not consider open MEPs to be single plans under the Employee Retirement Income Security Act (ERISA).    

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According to Pentegra, open MEPs are among the safest and most beneficial retirement plan structures when properly governed. Proper governance includes ensuring that the plan meets ERISA provisions, in particular the Annual Report (i.e., Form 5500) and audit requirements. The additional reporting and audit requirements do not impair a MEP’s status as a multiple employer plan under the Internal Revenue Code, nor its ability to provide fiduciary outsourcing and cost benefits.  

MEPs and other fiduciary outsourcing solutions are poised for sustained growth as part of the intensifying movement toward relieving employers of fiduciary burdens while controlling costs, Pentegra says. Whether an MEP is a single or multiple employer plan for ERISA purposes will have little impact on this trend, the paper concludes.  

The white paper can be viewed here.

 

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