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In This Issue
Shining the Light on Plan Operation and Documentation
A TPA's Proactive Approach to Transparency
Advisors and TPAs Team Up to Turn Transparency into Opportunity
Institutions Help Solve the Fee Disclosure Puzzle
SCS e-xpress
Mar/Apr 2011

xrayA Message from Sarah & Chris:

The theme of this issue is "transparency."

The era of full disclosure has arrived - faster than a speeding bullet!  Fee disclosure and fiduciary issues are on everyone's minds.  If plan sponsors were all "supermen" or "superwomen," they could simply use their x-ray vision to see through the complicated reporting and disclosures and determine what fees they are really paying.  But since that's not the case, we can put transparency into action and work together as professionals to help plan sponsors see their way more clearly and find the answers they need to make informed decisions and carry out their own fiduciary duties.
We hope you enjoy our free SCS e-newsletter.  Please send us your ideas and suggestions for future issues.  Have a great day!  
Where We'll Be
Keystone, CO
08/21/11 - 08/24/11
National Harbor, MD
10/23/11 - 10/26/11
Today's Tips

The 2011 ERISA Outline Book is now available.  If you didn't buy the online version last year, be sure to buy it this year.  It's a great way to quickly search and research - it's always right at your fingertips.  Click here to learn more...
Power of 3 Workshop

We would like to thank all of you who attended our first annual Power of 3 Workshop.  It was a great success, thanks to your participation.  We'll update our web page with next year's location/dates once we've finalized our 2012 plans. 
In the meantime, check out our Power of 3 Workshop web page to see what the 2011 attendees had to say!
Today's Quotes

Transparency is not the same as looking through a building: it's not just a physical idea, it's also an intellectual one.
    - Helmuth Jahn, architect

Trust, honestly, humility, transparency, and accountability are the building blocks of a positive reputation.  Trust is the foundation of any relationship.    
    - Mike Paul,
       major league baseball player

Today's Laughs


A committee is a group that keeps minutes and loses hours. 

   - Milton Berle, comedian 

Asking dumb questions is better than correcting dumb mistakes! 
If the #2 pencil is really the most popular pencil, then why does it remain #2?


Shining the Light on
Plan Operation and Documentation

401(k) plan fee disclosure to plan sponsors and participants and the new definitions of fiduciaries are leading to increased transparency in the retirement services industry.  Many qualified retirement plan TPAs already fully disclose fees, and the marketplace is adjusting to the new regulations even before they take effect next year.  However, Ilene Ferenczy, a current ERISA attorney and former TPA, points out that we should shine a light on the operation and documentation of small plans, where the real potential liability lies.  Ilene is a movie buff and likes to link her advice to famous film scenes.  Ilene points out the need for an annual "compliance audit" in her article entitled "Are You Kidding? The Fall Will Probably Kill You!"


Can you remember the movie that this famous line is from?  Click here to see the film clip from "Butch Cassidy and the Sundance Kid," as Paul Newman and Robert Redford are considering jumping from a high cliff into the roaring river below. 


 Transparency TPA 

    A TPA's Proactive Approach to Transparency



A compliance-only TPA has 250 plans with several large recordkeepers. The TPA firm has always been transparent about their fees, and the majority of the plans are referred to the firm by advisors.  When the first fee disclosure rules were being proposed, the TPA firm owner reached out to the advisors and brokers about how the firm's plans would be impacted by the new rules.  Both the TPA and the advisors looked at open architecture recordkeeping solutions and institutional NAV products in addition to the current recordkeeping solutions. 


Despite the TPA firm's traditional focus on compliance and administration, the firm owner realized the need to be more than just an administrator.  Instead, she positioned herself as the plan's consultant and compared fees and services of various recordkeeping options in conjunction with the advisors.  As a result, she has talked about fee transparency with most of her clients well in advance of the effective date of the fee disclosure rules, and she developed an easy-to-understand fee comparison format.  More importantly, she has been able to reinforce and promote her firm's value and the advisors' value to avoid the continuing "race to the bottom" on fees that has plagued our industry.  She developed a spreadsheet with multiple tabs packed with relevant information to compare fees and services.  Click here to view a sample comparison. 


 Advisors and TPAs Team Up to Turn Transparency into Opportunity 


Drew Brees, the New Orleans Saints' quarterback and Sports Illustrated Sportsman of the year, consistently gave credit to his entire team when they won the 2010 Superbowl. In fact, Brees convinced his teammates after a lackluster 2008-2009 season to spend twice as much time reviewing opponents' previous games, and he also recognized the need to work more closely with the running backs, receivers, and the offensive line. Drew Brees knew that he could not play every position, but he could lead a team of specialists who would finish strong and win a championship.  Retirement plan advisors can take a page from Drew's playbook to team up with their TPA and turn transparency an opportunity. 


A qualified plan retirement advisor who understands the complexity of the rules will work with and rely on a team of experts on qualified retirement plans.  A recent study found that fees ranked well below plan design and effectiveness on the list of concerns by plan sponsors.  Advisor and TPA teams who talk about what sponsors care about and create a fee disclosure "game plan" to address the issues at hand will retain and win retirement plan business. 

dollar puzzle 

    Institutions Help Solve the Fee Disclosure Puzzle


Institutional service providers - especially institutional recordkeepers - can support the TPA/advisor team by providing client-friendly fee disclosure formats.  Good formats will not only clearly disclose fees, but also highlight the value provided by each of the service providers to the plan.  Templates with "drag and drop" service descriptions and a one-page marketing-friendly layout will help plan sponsors solve the puzzle of fee disclosure and will turn increased compliance into opportunity for the service providers.  

Survey Said...

In our last issue, we conducted a brief survey to get your thoughts on Continuing Professional Education (CPE).  You told us that you were most likely to use conferences and webcasts for fulfilling your CPE requirements.  Annual conferences scored the highest (as opposed to local or regional conferences) and live and recorded webcasts scored a close second.  The most desired CPE topics included:  Compliance Issues, Advanced Qualified Plan Topics, Plan Document Issues, Customer Service and Communication, and Management and Leadership. When we asked you about desired "soft skills" for employees in your firm, you ranked "communicating difficult concepts" and "problem solving" as the most desired skills. 


Special thanks to those who completed our survey - we heard you and we will help accommodate your CPE needs!  SCS is developing a series of recorded webcasts to bring you CPE opportunities covering your favorite topics.  Watch for more information later this summer.

Power of 3 Retirement Industry Update Workshop

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