Products June 19, 2014

Sponsors Should Encourage Into-Plan Rollovers

BMO Retirement Services lays out four key reasons asset consolidation benefits participants.
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Encouraging participants to roll assets from a previous employer’s defined contribution (DC) plan reduces the potential for prematurely cashing out, BMO says in a new white paper for sponsors and their consultants, “BMO Defined Contribution IQ: Rollovers.” It is the second in a nine-part, bi-monthly educational series BMO has developed to help them create more successful DC plans, titled Defined Contribution IQ.

Secondly, as plan assets rise, all participants in the plan benefit from lower investment costs, which can have a dramatic impact on retirement outcomes, BMO says. Thirdly, participants benefit from professional oversight, and by bundling their assets, they can see more accurate retirement income projections.

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“The average worker today will work for five to seven employers during his or her lifetime, so the flexibility to transfer retirement savings is extremely valuable,” says Todd Perala, author of the Defined Contribution IQ series and director of strategic initiatives at BMO. “We believe that if plan sponsors can help participants consolidate their retirement saving as they are on-boarded, then employers are really offering the potential for a better retirement to their employees—and doing it in a very economical manner.”

Sponsors can make the process easy by equipping participants with enrollment kits that explain the process simplistically, that include a user-friendly rollover form and that they inform participants they can reach call center reps who can walk them through the process, BMO says. For those employees leaving the company, sponsors should also explain the benefits of their rolling their assets over to their new employer, BMO adds.

Furthermore, to help those employees who are retiring, sponsors should offer funds that deliver periodic payments, even if it means modifying the plan’s design. “This gives retirees a straightforward way to turn their retirement savings into an income stream that replaces their paycheck,” Perala says.

BMO’s first Defined Contribution IQ white paper addressed how automatic features can significantly improve outcomes, encouraging sponsors to automatically enroll participants at a 6% savings rate with annual 1% or 2% escalations, and to use a target-date fund as the qualified default investment alternative.

 

Products June 19, 2014

ComputerSupport Offers Compliance Solution

ComputerSupport.com, a provider of cloud computing and digital security solutions, has expanded its compliance support and remote information technology capabilities for use by financial advisers and broker/dealers.
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The firm says the third generation of its ITAnyWhere Cloud platform can provide advisers and broker/dealers with remote and dependable access to critical computing infrastructure and client account data. All of a firm’s data, emails and business applications can be accessed through the ITAnyWhere solution.

Users can access the platform through a variety of mobile and desktop devices. The ITAnyWhere Cloud has a variable per-user monthly cost and a low initial investment, the firm says. By leveraging the cloud-based solution, advisers and broker/dealers can eliminate the need to buy expensive new hardware and software. A self-service portal allows financial professionals to instantly add or remove users and applications to meet changing business needs.

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The cloud computing service provides a range of capabilities that can help financial professionals meet strict regulatory requirements, including:

  • Key client documents are stored and accessible in the ITAnyWhere Cloud for as long as needed. All documents and records are easily accessible for their lifetime, the firm says.
  • Reports, advertisements, operating documents and manuals can be segregated and organized.
  • Customers using the ITAnyWhere Cloud with compliance features benefit from permanent file retention—even if a file is deleted from the user system, it can be retrieved upon request. This feature also extends to previous versions of documents, which are copied as changes are made to leave an audit trail.
  • Access to data for regulators can be provided upon customer request. Third-party access is logged and controlled by a specific username and password.
  • All files and data are stored within Amazon Web Services Elastic Block Store service (EBS). EBS Encryption, the firm says, is significantly more resilient then standard disk drives.
  • Only users with delete access can delete a file. All access to files and folders is controlled administratively, and can be limited to none/view/read-only/read-write/read-write-modify access by individual user or group.

ComputerSupport.com also released a white paper covering important data security and compliance concepts for broker/dealers and financial advisers, available here.

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