September 19, 2013 (PLANSPONSOR.com) – Another higher education institution has moved to a sole recordkeeper model for its 403(b) plan.
announced that Providence College, a Catholic and Dominican liberal arts
institution, has selected the company as sole recordkeeper for its 403(b) plan,
transitioning from three retirement plan providers. While many 403(b) plan
sponsors have moved to a single provider since the 403(b) regulations were
passed in 2007, David Ray, vice president and head of Strategic Sales at
TIAA-CREF, told PLANSPONSOR the higher education segment of the market is in
the early stages of the trend.
to Ray, a single recordkeeper model is beneficial for both plan sponsors and
participants by providing retirement savings information that can lead to
better decision-making and savings habits. In addition to streamlining
administrative tasks, sole recordkeeping centralizes the management of plan
administration to one institution. Providers can more easily monitor fiduciary
obligations and ensure compliance needs are met, and keeping track of
investment performance is simpler. Additionally, enrolling participants and
tracking eligibility is easier for higher education institutions, and a more
personalized approach can be taken to administer effective advice and outcome-based
communications to participants.
institutions bottom line is also benefited, Ray added. Working with a sole
recordkeeper allows institutional plan sponsors to redirect staff and resources
into more strategic business areas.
plan sponsors are moving to sole recordkeepers to have to access open
architecture investment lineups, Ray said. Providence College plan members will
have access to an array of customizable investment options, including annuities
and mutual funds. Plan members will also be able to purchase mutual funds of
their choice through TIAA-CREF's self-directed brokerage platform.
sponsors also choose a sole recordkeeper model for compliance oversight for
both the plan and the participant, robust participant education strategies and
participant level investment advice,
economies of scale resulting in lower fees for the plan sponsor and
participant, and one relationship with accountability for all critical plan
administration needs. Providence College plan members will have access to
TIAA-CREF financial advisers, who provide personalized retirement advice
tailored to individual goals at various life stages, plus online financial
advice and resources.
“Providers want to
empower their participants by helping them navigate their choices and decide
which options will be most effective in helping them reach their retirement
savings goals, and consolidating to one recordkeeper plays a key role in
instilling this confidence and trust within an institution,” Ray said.