TIAA-CREF announced that Providence College, a Catholic and Dominican liberal arts institution, has selected the company as sole recordkeeper for its 403(b) plan, transitioning from three retirement plan providers. While many 403(b) plan sponsors have moved to a single provider since the 403(b) regulations were passed in 2007, David Ray, vice president and head of Strategic Sales at TIAA-CREF, told PLANSPONSOR the higher education segment of the market is in the early stages of the trend.
According to Ray, a single recordkeeper model is beneficial for both plan sponsors and participants by providing retirement savings information that can lead to better decision-making and savings habits. In addition to streamlining administrative tasks, sole recordkeeping centralizes the management of plan administration to one institution. Providers can more easily monitor fiduciary obligations and ensure compliance needs are met, and keeping track of investment performance is simpler. Additionally, enrolling participants and tracking eligibility is easier for higher education institutions, and a more personalized approach can be taken to administer effective advice and outcome-based communications to participants.
The institutions bottom line is also benefited, Ray added. Working with a sole recordkeeper allows institutional plan sponsors to redirect staff and resources into more strategic business areas.
Most plan sponsors are moving to sole recordkeepers to have to access open architecture investment lineups, Ray said. Providence College plan members will have access to an array of customizable investment options, including annuities and mutual funds. Plan members will also be able to purchase mutual funds of their choice through TIAA-CREF’s self-directed brokerage platform.
Plan sponsors also choose a sole recordkeeper model for compliance oversight for both the plan and the participant, robust participant education strategies and participant level investment advice, economies of scale resulting in lower fees for the plan sponsor and participant, and one relationship with accountability for all critical plan administration needs. Providence College plan members will have access to TIAA-CREF financial advisers, who provide personalized retirement advice tailored to individual goals at various life stages, plus online financial advice and resources.
“Providers want to empower their participants by helping them navigate their choices and decide which options will be most effective in helping them reach their retirement savings goals, and consolidating to one recordkeeper plays a key role in instilling this confidence and trust within an institution,” Ray said.