Qualified Retirement Plan
Highlights
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Selecting a Plan
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Types of Plans
401k Plans
Bundled
A bundled plan is where a mutual fund company, insurance company, or brokerage firm that is the asset custodian and/or trustee also performs the administration duties such as preparing the IRS Form 5500, non-discrimination testing, etc., and prepares the participant statements.

Advantages:
  • Very low cost to employer for administration fees
  • One stop shopping
  • Daily valuation with 800-number and/or Internet access for participants
  • Benefit statements sent directly to employees' home
Disadvantages:
  • High asset fees may apply - approximately 1% of assets annually or more
  • May be limited to one family of mutual funds
  • One stop shopping - if employer is dissatisfied with either the assets or the administration, the entire plan must be moved to rectify
  • No local contact - many bundled plans are administered outside of California
  • Plan design - most bundled plans cannot offer age-weighted, new comparability, or class-based types of profit sharing allocation features
Unbundled
An unbundled plan normally involves two or three parties:
  1. third party administrator (TPA) such as Pacific Retirement Plans, Inc.,
  2. asset custodian, such as mutual fund company, insurance company, or brokerage firm, and
  3. Broker (optional).
Basically, the TPA does all the record keeping from preparing quarterly participant benefit statements to plan design, compliance and Form 5500 preparation.

Advantages:
  • Low asset fees
  • Multiple fund families for investments
  • Local contact
  • Plan design - we can design a plan to the exact specifications that the employer wants, such as an age weighted, new comparability, or class based types of profit sharing allocation feature, etc.
Disadvantages:
  • Higher administration fees
  • No daily valuation, 800-number, or Internet access
  • Monthly, quarterly, or semi-annual benefit statements usually not sent directly to employees' home address.
Semi-bundled
A semi-bundled plan offers the best of both worlds, at a reasonable cost in terms of employer fees.

Basically, the asset provider/custodian, usually a mutual fund company or insurance company, does the record keeping and participant benefit statements and the TPA concentrates on plan design, compliance and Form 5500 preparation.

Advantages:
  • Low cost to employer for administration fees
  • Low asset fees if limited to one family of mutual funds
  • Daily valuation with 800 number and/or Internet access for participants
  • Benefit statements sent directly to employees' home
  • Plan design - we can design a plan to the exact specifications that the employer wants, such as an age weighted, new comparability, or class based types of profit sharing allocation feature, etc.
  • Local contact
Disadvantages:
  • Higher asset fees if multiple fund families are desired


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