Products January 7, 2021

Franklin Templeton Partners With Vestwell on Adviser Managed Account Platform

The solution allows plan sponsors to rethink their default option by choosing an investment model for each employee, rather than a single target-date series.

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Franklin Templeton has partnered with digital recordkeeping platform Vestwell to build an adviser managed account experience.

The new offering combines Franklin Templeton’s proprietary Goals Optimization Engine (GOE) methodology with Vestwell’s recordkeeping infrastructure. The offering will live natively in Vestwell’s platform, with the ability to automatically enroll participants into a personalized investment strategy.

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“We believe every U.S. worker and household has the right to experience financial well-being during each life phase. Enabling plan advisers to deliver goals-based, personalized, cost-effective advice to Americans in the workplace is our focus. We want to equip advisers and investors with innovative tools and technology to achieve that goal at scale,” says Yaqub Ahmed, head of U.S. retirement and insurance at Franklin Templeton. “We’re thrilled to be working with Vestwell to deliver a managed account offering that helps advisers more effectively engage during all stages of a participant’s savings journey.”

The managed account solution allows plan sponsors to rethink their default option by choosing an investment model for each employee, rather than a traditional single target-date series. Participants can be defaulted into a target-date series early in their savings journey before being moved into a more active model as they approach, or reach, retirement.

The offering is currently in late-stage development, with an expected rollout in the first half of this year.

Products January 6, 2021

401(k) Plan Co. Launches PEP as Alternative to CalSavers

The firm says the new PEP features higher contribution limits relative to CalSavers.

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The California 401(k) Plan, a pooled employer plan (PEP) sponsored by the 401(k) Plan Co., launched this week.

The announcement of the launch notes that the PEP allows for higher contributions from employees, allows employer contributions, has a higher returning default investment and is a better option for highly compensated employees than the automatic-enrollment, state-run retirement plan CalSavers. “The employer controls age, term of service and entry requirements, and exempts themselves from work associated with the state plan and enabling Roth [contributions] for highly compensated and owners,” the 401(k) Co. says in its announcement.

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“It’s a complete solution, instead of the expensive half measure of a state plan so that employers can opt out of CalSavers like many of their employees do,” said a spokesperson for The 401(k) Plan Co. in the announcement. The spokesperson stated that, “The opt-out rate by employees from CalSavers is about three times what it is for a 401(k).”

The California 401(k) Plan comes in two separate options:

  • A solution for employers with five to 100 employees that wish to gain size and scale; and
  • Enterprise, for employers with more than 100 employees that want to outsource administrative services such as audits, Form 5500 and notice filings.

More information is here.

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