The Columbia Daily Tribune reports that 403(b), 457 and other voluntary savings plans assets are currently with 10 different companies. The UM System is looking to whittle that down to between one and three vendors.
The news report said the system is eyeing this change because administrators are getting ready to ask for proposals from companies to manage the defined contributions side of a new retirement plan. Knowing that as much as $830 million in current employee savings could be part of the deal might attract more vendors to bid with competitive fees.
“If vendors know that they’re only going to get a piece of the pie, typically expenses are higher,” said Kelley Stuck, associate vice president for compensation, according to the Daily Tribune. “We might be able to get lower expense fees” for those who now save “and attract better vendors.”Stuck said the administrators are in the exploratory stage right now to determine if this is appropriate and would financially benefit both those in the new plan and employees who currently invest.
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