OneAmerica Service Helps Ensure Fee Equity

OneAmerica company McCready and Keene, Inc. announced its new Strategic and Targeted Allocation of Revenue (STAR) service.

STAR helps ensure participants are paying an equitable portion of the plan expenses, regardless of their investment allocation choices.

With STAR, a plan’s revenue account is allocated back to participants in proportion to the amount generated by their individual balances and fund selection. When plan administration expenses are deducted from participant accounts, STAR ensures the expenses are allocated proportionately among all participants.

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“Sponsors will love this service because it assesses fees across their plan based on the funds in which participants are invested,” said Pete Welsh, vice president of product and business strategy for retirement business at the OneAmerica companies.

Based in Indianapolis, Indiana, McCready and Keene provides actuarial services to defined benefit plans and provides recordkeeping services to employee stock ownership plans and other defined contribution plans, including a trust program that uses an open architecture investment platform available to 401(k), 403(b), 457, money purchase pension and profit-sharing plans. More information about McCready and Keene is available at www.mcak.com.

Fee Disclosures Barely Ripple Participants

Fee disclosure regulations implemented last year have had a negligible effect on workers participating in employee-sponsored retirement plans, a survey found.

According to a client survey of 416 plan sponsors conducted by BMO Retirement Services, 80% of employers reported that the new rules mandating full disclosure of retirement plan fees and expenses have had little or no impact on their plan participants.

Plan sponsors believe the added regulations did not change participant behavior or their perception of their retirement savings benefit. Only 1% of plan sponsors participating in the survey reported seeing positive or negative changes in participant behavior. Similarly, just 1% of respondents felt an increase in ill will by participants toward either themselves or the plan’s recordkeeper.

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In addition, most plan sponsors believe the increased disclosure has not added to participant confusion. According to the survey, only 15% of plan sponsors see this disclosure as confusing to their participants. In contrast, 46% expressed this concern shortly after last year’s regulatory changes took effect.

When asked when they expect older plan participants to retire, more than one-third (36%) of the plan sponsors surveyed believe Baby Boomers enrolled in their company retirement plans will work past the age of 65. Forty-one percent expect this will have a positive impact on their companies, compared to only 4% who felt the impact would be negative.

The survey also identified key attributes plan sponsors look for when considering adding a retirement solution to their company’s defined contribution plan. Three-quarters (74%) of plan sponsors want solutions that are easy for their plan participants to understand, and more than one-quarter (26%) want solutions that are not too complex to manage as a plan sponsor.

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