TRO | Published in July 2012

Great Integrations

PLANSPONSOR’s 2012 TRO Buyer’s Guide

By PLANSPONSOR staff | July 2012
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Illustration by Greg Mably

For plan sponsors tired of managing multiple plans across various vendors—not to mention the communication to participants about such plans—perhaps now is the time to consider total retirement outsourcing, or TRO. Simply stated, TRO is about leverage: leveraging the expertise of a trusted partner across a broader range of disciplines; leveraging the combined assets of multiple plans to achieve a more cost-effective result; and leveraging your time and energy by coordinating your retirement plan needs through a single point of contact.

In an era of increased focus on “retirement readiness,” TRO allows not only for a seamless administration of disparate programs but also for the delivery of an integrated product to both plan sponsors and program participants that enables efficient and satisfying management of the entire benefit package—from the first day of employment to the first day of retirement, and beyond.

Such consolidation is of interest to many plan sponsors. In fact, 48% of sponsors whose retirement plans are not fully bundled with one vendor indicate they would be open to bundling the plans if convinced of the benefits, according to Chatham Partners’ report “2011 Trends in DB [Defined Benefit] Bundling and Total Retirement Outsourcing: Evaluating the Opportunity in a Recovering Economy.” However, the survey found that many have strong reservations about the strategy that would need to be overcome first. For example, most semi-­bundled sponsors agree that cost savings and efficiency will probably result, but many of them, as well as unbundled plan sponsors, balk at trading off investment flexibility and potentially adding to their risk.

This Buyer’s Guide is intended to help plan sponsors evaluate the various service offerings by recordkeepers who provide such TRO service.