Deals & People July 18, 2007

BISYS and Pentegra Retirement Services to Bring Open Architecture to Advisers

Recordkeeper and plan administrator BISYS Retirement Services and Pentegra Retirement Services, a retirement plan provider, are collaborating to distribute BISYS’s LinkInsight open architecture investment platform to financial advisers.
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According to a press release about the alliance, the model allows third party administrators (TPAs) and financial advisers to work together to provide retirement plan solutions to plan sponsors and their participants. The model includes plan installation and conversion support, daily valuation and recordkeeping, Web-enabled access to information, and a suite of sponsor-and participant-directed services, communications, education and support.

“Through this mutually beneficial arrangement, financial advisors can leverage BISYS’ LinkInsight platform and Pentegra’s combined defined benefit and defined contribution plan experience to offer an integrated retirement plan solution,” said Charles Wenzel, senior vice president at BISYS Institutional Sales, in the press release.

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Pentegra oversees the retirement programs of more than 600 community banks, credit unions and other small businesses representing over $4.3 billion in assets under administration.

For more information, visit http://www.bisysretirement.com/.

Compliance July 18, 2007

SPARK Weighs In On 12b-1 Fees

Retirement services trade group The SPARK Institute has asked the Securities and Exchange Commission (SEC) to continue allowing mutual funds to pay 12b-1 fees to retirement services providers, but said that the fees should be disclosed to participants.
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SEC Chairman Christopher Cox has made no secret of the fact that he sees the use of 12b-1 fees as defunct and has revealed plans for the regulator to embark on a broad initiative to make the fees more transparent (See Cox Says 12b-1 Fees a “Sales Load in Drag”).

Larry Goldbrum, General Counsel of The SPARK Institute, argues in the letter to the regulator that the fees help make services “feasible and cost effective,” and that a decision to eliminate or limit the payments would result in retirement plan providers having to “make up any shortfalls by accounting for and trading mutual funds on a unitized basis, pushing the 12b-1 payment amounts outside of mutual funds.’

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Goldbrum further contends that the increased expenses would trickle down to affect net returns of the mutual funds, in turn making it more difficult to report and explain investment returns to plan sponsors and participants.

The SPARK Institute’s complete comment letter may be found on its web site at www.sparkinstitute.org.

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