Retirement Planning Services

Small Business Retirement Plans

The area of fiduciary responsibility is of particular importance in today’s small business retirement plan environment.

An annual review of your retirement plan (employer or individual), as well as a current Investment Policy Statement outlining the employers investment selection and monitoring policies & procedures, are important steps toward helping an organization fulfill their fiduciary responsibility on behalf of their employees.

Are Target Date Funds hitting The Mark?

Target Date Funds vs. Personal Investment Advice

Target Date Funds (TDFs) shift investors from stocks to bonds over time in an effort to become more conservative as retirement approaches. This transition is referred to as a glide path and while the basic concept seems reasonable, TDFs are widely criticized for the limits of their mass market approach. For example, TDF’s cannot incorporate all the relevant personal facts that determine the ideal allocation for one’s retirement investments, and investors can find themselves either forfeiting needed growth or accepting unnecessary exposure to an increasingly volatile market.

With the exception of TDFs, retirement plans are designed for growth and accumulation, not wealth preservation. Though most plans may be adequate if you have at least 20 or 30 years before retirement, not everyone has the luxury of time to recover what can be lost when markets have a bad year.

It is important to remember that serving the retirement needs of employers and employees is not a one size fits all. There are many potentially suitable options to choose from. The important thing is to be knowledgeable about all of your options, so that you can make a well-informed decision.

If you would like to explore whether or not your 401(K) plan allows you to take advantage of the Self-Directed Option (SDO), please contact our firm and request a no-cost comprehensive review of your employer sponsored retirement plans Summary Plan Description (SPD). Learn More…

Does Your 401(K) Plan Offer A Self-Directed Option?

More Choice + More Flexibility = Customized Investment Advice on your 401(k)

Over the past few years many employers have enhanced their retirement plans to include a Self-Directed Option (SDO) so that employees who contribute to their employer-sponsored retirement plan can have more choices and greater flexibility. Plans that offer a SDO have included the employer retirement plan services of the following companies:

• Fidelity Investments (aka, “NetBenefits”)
• AON Hewitt
• Vanguard
• T. Rowe Price
• Charles Schwab & Co., Inc.
• TD Ameritrade Retirement
• Pershing
• National Financial Services (NFS)

Plans that offer an SDO or Brokerage Window offer employees the opportunity to take full control of a portion of their current retirement account by linking it to the existing Core account. In doing so, participants expand the range of investment choices beyond the Core investments and have access to the same management style as High Net-Worth Investors, Institutions & Foundations.

Your Core account refers to your retirement account through your employer. The SDO or a brokerage window is a choice on eligible plans that offer investment choices such as mutual funds, exchange-traded funds (ETFs), stocks, bonds, brokerage certificates of deposit (CDs) and access to fiduciary investment advice through a Registered Investment Advisor.

SDOs are very similar to traditional brokerage accounts, but because it is part of your retirement plan, you may only fund your SDO by reallocating money to it, from your core retirement account. If you feel that you would benefit from having an investment professional to assist you with making suitable investment choices that represent your risk tolerance, values, needs and goals, then a SDO could be appropriate for you.

Second Opinion Service: Our Small Business Retirement Plan Review

Receive an Investment Review & Analysis of Your 401(K), SEP-IRA, or 403(B) Investments.

According to the Wall Street Journal, a study by the human resources consulting firm Hewitt Associates, found that nearly 45% of workers feel they do not have enough information to make the right investment choices, and more than 50% want help in making investment decisions. 45% of 401(k) investors have never adjusted their investment mix, according to a survey by the Retirement Services Roundtable and Boston Research.

At Wealthcare Financial Group, Inc. we offer a comprehensively written portfolio review and analysis of the investments held within your 401(K), SEP-IRA or 403(B) Plan. Many retirement plans offers a limited menu of investment vehicles, such as Mutual Funds, Exchange-Traded Funds (ETFs) and in some cases a fund or fractional shares of your employers publicly traded stock; also known as a “Company Stock Fund”.

The review will contain the following information:

• An independent review of your small business retirement plan or 403(B) Portfolio
• A written portfolio review and analysis on each investment vehicle that you have chosen within your company-sponsored retirement plan, based on your tolerance for risk, retirement income needs and goals.
• Wholistic Portfolio Analysis: In many cases investing in your company-sponsored retirement plan represents only a portion of your overall investments. Perhaps you may have a IRA, ROTH-IRA, or a taxable brokerage account. Our portfolio review, including analysis and recommendation take into consideration any investments that you may hold outside of your 401(K), SEP-IRA or 403(B) Plan.

In order to complete your 401(K) review, please provide us with the following:

• A recent statement from your 401(K), SEP-IRA or 403(B) Plan
• A list of the various funds offered within your retirement plan
• A copy of your summary plan description

Fiduciary Services for Employers

How We Can Help

At Wealthcare Financial Group, Inc. we assist employers with achieving greater levels of efficiency within the context of their company-sponsored retirement plan. We will conduct a complimentary audit against our stringent checklist in order to accomplish the following:

1. Develop a fiduciary file and benchmark your retirement plan to ensure that it is compliant with ERISA Section 404(c).
2. Review and/or draft the Investment Policy Statement (IPS) that reflects the investment parameters, risk tolerance, asset allocation, including over-all values, needs and goals of your organization’s retirement plan.
3. Conduct annual portfolio review & investment analysis on all investments offered within the Plan.
4. Review the Plan for full disclosure and transparency of all fees & expenses.
5. Examine ways to increase employee participation.
6. Discuss strategies that would allow key employees to contribute additional funds toward retirement.
7. Provide educational seminars and financial planning assistance to employees.

Our Fiduciary Consulting Services for small business retirement plan focuses on enhancing the efficiency and operation of your organization’s retirement plan, while striving to reduce the Plan’s investment expenses, record-keeping and administrative costs.

The Wealthcare Financial Group Retirement Plan Checklist

Please use our checklist as a barometer to conduct an internal benchmark of your organization’s retirement plan:

• Are there any outstanding regulatory compliance issues that can jeopardize the tax-qualified status of your Plan?
• Does your Plan provide options that may favor highly compensated and/or longer-term employees who may be in need of additional tax deferred options?
• How is the quality and variety of investment choices available to employees? What method does your organization use to conduct due diligence? What methods for investment selection and ongoing review does your organization use?
• What is the true net cost of the Plan, taking into consideration both billed (administrative) and un-billed (investment) expenses?
• Has your organization considered the appropriateness of adopting a bundled vs. unbundled administrative approach?
• How does your organization measure the effectiveness of your employee communication & procedures including financial, retirement and investment related educational materials and training?
• How often does your Retirement Plan Committee review its discretionary employer contributions, budget objectives and alternatives?
• How often does your organization review participation levels and provide information regarding plan features that may help participants increase their contributions?
• Does your organization annually review compliance-related issues, including discrimination test results, bonding, 5500 forms, audit needs and ERISA 404(c) requirements?
• As the Sponsor of your employees retirement plan, is your Retirement Plan Committee satisfied with administration, record-keeping and investment management fees?