BPG’s library contains a variety of white papers that can help guide readers to better understand complex topics regarding retirement plans, financial planning and investments.
Here you will find a brief summary of recently published white papers.
Stable Value Funds
Stable Value (SV) is an important asset class in the defined contribution marketplace as measured by participant usage and percent of total DC assets. Despite its importance though, SV funds are still not well understood by most advisors and their clients. This paper is written specifically for ERISA fiduciary advisors and is intended to give a basic overview of different types of stable value products, how to evaluate their key features and what to look out for so a fiduciary advisor can feel confident making specific, due diligent recommendations about stable value products to their clients.
What’s Reasonable? Rule of Thumb Benchmark for 401k Advisory Fees
Plan sponsors are increasingly aware of their fiduciary responsibility to ensure that their plan only pay “reasonable fees” to their service providers. While commonly used benchmarks on recordkeeping and investment data are readily available, there is far less information on the fees plan sponsors pay to their advisors. The best way for a plan sponsor to benchmark the reasonableness of their advisory fees is to issue a Request for Proposal (RFP). As a quick check, we’ve developed the following grid to help plan sponsors with some quick guidelines on advisory fee data gleaned from over 1,000 plans of similar size.
The Evolution of 401(k) Advisory Fee Arrangements
ERISA plan fiduciaries are obligated under ERISA to ensure that the total amount of compensation paid to a service provider is reasonable and not excessive. Faced with a decade-long series of lawsuits challenging the “reasonableness” of provider fees, and with greater illumination of expenses afforded by fee disclosure requirements, plan sponsors have aggressively pushed for savings from investment managers and recordkeepers. The upshot of these efforts has been a 40% drop in investment fees for a typical 401k participant and a lowering of administration fees by nearly 45%.
Target Date Funds: Why Plan Sponsor Due Diligence Process Matters
With so many DC plans using target date funds and usually as their QDIA option, the process for selecting the “right” target date suite has become a major plan sponsor concern. Even the DOL has stepped in and issued guidance to sponsors regarding the proper process for selecting and monitoring these funds. But even with this guidance, sponsors often ask, “What constitutes a sound selection process?” “Does it matter?” and “Does the selection process impact investment performance/outcomes?” In response to these trends, Blue Prairie Group (BPG) has developed a comprehensive selection and monitoring due diligence process to assist plan sponsors in evaluating target date funds for the ultimate benefit of their participants.
Framework for Optimizing Your DC Investment Menu
Defined contribution retirement plan sponsors face many decisions when attempting to maximize plan benefits for their participants, specifically with regards to investment menu design. Blue Prairie Group has long espoused a belief that a good investment menu not only satisfies the preferences of the plan sponsor, but should also be designed with the needs and limitations of the participant base in mind.
What You Need to Know About General Account Stable Value Funds
Stable Value (“SV”) funds, as defined by the Stable Value Investment Association, are “a relatively low risk asset class that focuses on capital preservation and liquidity, while providing steady, positive returns to participants…” They accomplish this by using insurance contracts to guarantee the principal and interest rate to investors.