Par Excellence

In this issue, we showcase the 2018 PLANSPONSOR Retirement Plan Adviser of the Year finalists and winners in four categories: individual, small team, large team and mega team. These exceptional retirement plan practices and individuals stand out for many reasons. All are forward-looking and embrace best practices, early and often. We feature accompanying Q&As with them, online at PLANADVISER.com/RPAY2018, and I encourage you to check them out.

With the number of lawsuits waged against retirement plans rising each year, we thought it would be valuable to take a deep dive into how advisers can help their clients avoid litigation and, if sued, be in a position of strength to win the case. “Battling the Elements” makes it unequivocally clear that advisers need to help plan sponsors determine their fiduciary, and the retirement plan committee’s, responsibilities and be able to show they’ve thought through any processes for making decisions about the plan and have documented each in great detail.

What some in the industry are calling “hybrid qualified default investment alternatives (QDIAs)” are only starting to be introduced by a few firms, but they may be worth investigating. “A QDIA in Transition” explores how hybrid QDIAs work: by starting participants off in a target-date fund (TDF) and then moving them into a managed account as they get closer to retirement, say at age 50. Proponents say managed accounts offer more benefits than TDFs by taking into consideration a person’s complete assets and risk tolerance, and are most valuable for those engaged with their plan—as participants tend to be when approaching retirement.

The industry has seen plan sponsors’ interest in working with 3(38) fiduciaries rise in recent years. What retirement plan advisers might not realize is they need not shoulder the 3(38) burden themselves. “Taking on Discretion” reveals that advisers may have 3(38) services available to them at the home office—and that it is possible to outsource those services from a third-party provider.

With the majority of businesses in the U.S. being small businesses, and the plurality of retirement plans being small and micro plans, many advisers may find themselves working with small companies. “Working Down-Market” outlines the services that plans with less than $5 million in assets most commonly seek—fiduciary support, plan design insight and participant education—and how advisers serving the micro-plan market can do so profitably. Most commonly, advisers say, they start off with a flat fee, clearly delineate their services from the get-go and leverage visits to the plan sponsor by scheduling as many meetings as possible.

In Client Communications, a new department that we debut in this issue, we start off with “Retirement Income Options,” which stresses that decumulation of assets is far more complex than accumulation and reveals that while the people in the retirement planning industry increasingly talk about such options, few plan sponsors offer them. Certainly, participants may be leery of retiring if they don’t believe they have a solid retirement income plan—leaving the sponsor at risk of having too many older workers.

We hope you find these stories interesting and that they lead your practice into new, profitable areas.