Products October 27, 2016

AccountantsWorld 401(k) Solution Targets Small Employers

The platform will perform “virtually all administrative tasks required by a company to offer a 401(k), removing this burden from company employees and executives.”
Reported by

AccountantsWorld announced its latest offering, Payroll Relief Retirement Solution (PRRS), in partnership Transamerica Retirement Solutions and TAG Resources (TAG), who will be the servicers of the PRRS.

The PRRS will fully integrate with AccountantsWorld’s payroll offering, Payroll Relief, and offer the following benefits to employers:

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

  • Ease of Administration: PRRS will perform virtually all administrative tasks required by a company to offer a 401(k), removing this burden from company employees and executives.
  • Consistent Compliance: By working with TAG, PRRS 401(k) plans are consistently in compliance with Department of Labor (DOL) and Internal Revenue Service (IRS) regulations. Plans audited by the DOL typically experience a 75% fail rate, but no TAG-administered plan that has followed TAGs directives has ever failed a DOL audit, the announcement contends.
  • Fiduciary Liability Protection: The PRRS plan provides employers with the comfort of knowing that their 401(k) is protected to the highest level allowed by law.
  • Low Cost: Because the PRRS is an “aggregated” model—meaning a large number of plans are aggregated together—pricing of the plan is on par or lower than other offerings that provide only some or none of the same benefits.

“The compliance requirements for offering 401(k) are complex, and that burden prevents many small businesses from offering 401(k) to their employees. We were looking for a way to mitigate that responsibility for the small business clients our Payroll Relief users serve,” says Chandra Bhansali, co-founder and CEO of AccountantsWorld. “After a lengthy and extensive due diligence process, we chose to partner with TAG and Transamerica because of their exemplary service and commitment to offering best-in-class retirement solutions.”

The Markets October 27, 2016

Prime Money Market Fund Exodus Slowing

Prime money market fund managers have been making changes in an attempt to win back assets.
Reported by

Prime money fund managers have begun to revert back to more normal portfolio management strategies following money fund reform implementation, as outflows from prime funds have stabilized, according to the latest Fitch Ratings Money Fund Reform Dashboard.

“Managers have been extending maturities and reducing liquidity in a bid to increase prime funds’ yields and lure investors back from government money funds,” says Greg Fayvilevich, senior director, Fitch Ratings.

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

The mass exodus from prime institutional money market funds slowed down in the week following the implementation of money market fund reforms on October 14, with $3 billion leaving prime funds. This is a relatively modest amount considering that since October 27, 2015, these funds lost approximately $861 billion in assets, primarily to government money funds. The significant shift away from prime institutional funds was largely driven by investor discomfort with the funds’ new features—liquidity fees and redemption gates, as well as a floating net asset values (NAV).

Post-reform, fund managers have been reducing historically high levels of liquidity, although liquidity continues to be elevated. Average weekly liquidity across 28 prime institutional funds reviewed by Fitch fell 7% from a peak of 87% on October 7, 2016, to 80% on October 21, 2016. On average managers continue to maintain significant liquidity buffers above the 30% threshold to avoid the possibility of triggering liquidity fees or redemption gates.

With managers now investing further out the curve, the yield spread between institutional prime and government funds has increased, reaching 0.18% as of October 21, 2016.

“The spread is likely to continue to widen as managers and investors get used to the new environment and portfolios further normalize. Yield differentials may gradually lure investors out of government money funds back into prime funds, or into alternative liquidity products such as short-term bond funds and private funds,” says Fayvilevich.

The report, “U.S. Money Fund Reform Dashboard”, is available at https://www.fitchratings.com/site/re/889672. A login is required.

«