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Professional Advice for Retirement Plan Committees

Through CoVerity, we provide professional advice to retirement plan investment committees. Our job is to provide retirement plan oversight to help clients make sound decisions, stay ahead of the regulatory curve, and facilitate positive outcomes for participants. Plan sponsors often struggle to stay on top of regulatory and ERISA compliance, manage fiduciary risk, and adequately prepare participants for retirement. For example:

  • Compliance concerns have increased due to expense disclosure regulations requiring sponsors to ensure fee reasonability.
  • Fiduciary prudence is impeded by the lack of sound processes and necessary expertise.
  • Many participants are disengaged and unprepared for retirement due to overwhelming investment choices, market volatility and low levels of financial education.

As a co-fiduciary, we help plan sponsors make prudent decisions, adopt industry “best practices,” meet the investment management responsibility, and maximize value from the plan vendors.

Although our retirement plan advisors are based in Atlanta, we provide retirement planning services throughout the United States. Convenient access to the Atlanta Hartsfield-Jackson airport make it easy for us to visit our clients.

 

What is a Fiduciary?

If your business offers retirement plans, it is vital to understand the role of a Fiduciary. A Fiduciary is a person who has the power and obligation to act for another under circumstances, which require total trust, good faith, and honesty. Fiduciaries are compelled to act in the best interest of participants. Legislation mandates the plan fiduciaries understand plan operations and expenses. They must ensure fees are reasonable and offer a prudent investment menu. Plan fiduciaries are personally responsible for breaches of responsibility.

 

Why Business Owners Should Care About Retirement Plans

401k(s), Profit Sharing plans and Pension plans are often neglected by business owners who miss the opportunity to play offense by taking advantage of tax shelters, corporate contributions as current deductions and deferred taxation on employee income. Because owners are usually the Plan Fiduciaries they also need to play defense as they are held to the Fiduciary Standard, one of the highest standards under the law. Fiduciaries can be held personally liable for errors. Fiduciaries must understand all plan expenses and ensure fees are reasonable. Owners without expertise should consider hiring a third-party fiduciary to help insulate themselves from the risks associated with retirement planning.

 

Retirement plans can be designed to provide substantial benefits to business owners. This article lists the top 12 things business-owners need to know about retirement plans.

12 Things Business Owners Need to Know About Retirement Plans

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White Horse Advisors’ Retirement Plan Services

ERISA 3(21) and 3(38) Fiduciary Services

CoVerity offers two levels of fiduciary services: 3(21) and 3(38). The most important difference between the two services lies with the responsibility and risk.

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Co-Fiduciary 3(21) Services

We advise and assist the plan sponsor as a co-fiduciary, but the plan sponsor still retains the ultimate responsibility to make and implement prudent investment decisions. Thus the plan sponsor retains the risk associated with making those decisions.

Complete Fiduciary 3(38) Services

We take on the complete responsibility of making and implementing investment decisions on behalf of the plan sponsor and participants. Consequently, the risk of making sound decisions shifts to us.

Ultimately the needs and desires of the plan sponsor typically dictate the specific arrangements.

3(21) vs. 3(38) Fiduciary Services

PDFdownloadIconSide-by-side comparison of two different types of fiduciary investment advisory services: 3(21) versus 3(38).

Annual Strategy Meeting

Once a year we meet with you to review your retirement plan. Plan sponsors set the annual agenda. The meeting includes reviewing benchmarks and plan statistics, discussing your objectives for the plan year and determining appropriate leading indicators. We explore any needed plan design changes. Look for expense control opportunities and areas where we can improve vendor performance.

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Periodic Meetings

We meet with clients to help you stay informed of the ongoing components that make up your fiduciary responsibilities. Together, we review plan investments and relevant legal and legislative updates. Where necessary, we prepare an Investment Policy Statement (IPS) for your evaluation, which can address compliance, fiduciary governance, and plan benchmarking.

Sample Meeting Minutes

PDFdownloadIconMeeting minutes assist the plan committee in documenting what was reviewed during the committee meeting as well as any decisions made

Sample Quarterly Monitoring Report (QMR)

PDFdownloadIconThe QMR provides a comprehensive review of the plan’s investment offerings and includes investment analysis at a total plan asset level.

Sample Investment Policy Statement (IPS)

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The IPS provides the guidelines for selecting and monitoring a retirement plan’s investment options.