The year is winding down, and it’s out with the old and in with the new! As the New Year approaches, it’s time to roll out your New Year’s resolutions for plan providers. Hopefully they’ll stick unlike the January gym-goers who fizzle out within a few weeks.
There is something to that old adage of learning from others’ mistakes before making your own. We’ve been trying to tell you for quite some time that there are benefits in using Auto Rollovers. Some of you out there heeded our advice. But others … well, some of you may find out the hard way.
This past June, we decided to administer a survey to retirement plan recordkeepers, TPAs and advisors, regarding their use of Automatic IRA Rollovers. We wanted to gain a better understanding of how they implement and utilize Auto Rollovers in each of their specific plans. Over 2,000 surveys were sent out, and now we're sharing the results with you.
Let’s say it snowed a good six inches and you begin the task of shoveling your sidewalk. Do you know what would be a good idea? To sprinkle some salt while you’re out there. Sure, you figure you could do it later, after you’ve had a big mug of hot chocolate, but seizing the moment would be better. Not only would it be beneficial, but you’re already suited up and outside, so you might as well get it done at the same time. The same basic idea applies to adding an auto rollover provision to your plan documents during PPA.
Last week we had the pleasure of welcoming three members of the General Accountability Office (GAO) into our work place. They were interested in visiting as part of an investigative report they are conducting on Automatic IRA Rollovers on behalf of Congress. Since we’re a major provider of those services, we opened our doors to them to discuss processes and rules that surround Automatic IRA Rollovers. On top of the processes, rules and information, we provided them with information on how Automatic IRA Rollover programs can be improved from a provider, plan sponsor and participant perspective.
Their report is slated for completion in 2014, but they left our office with a truckload of information on Automatic IRA Rollovers as well as a great attitude toward our company. They told us that they aren’t usually welcomed so enthusiastically but we made them feel right at home. We believe this was a great opportunity to help drive the discussion toward improving this vital service. One of our primary suggestions for improvement was to permit more of a QDIA-type default option. Currently, default options that fall under the regulation’s Safe Harbor are investments that are currently yielding little if any return, making it nearly impossible for these accounts to grow as was the purpose in the first place.
, the retirement industry’s low-cost IRA provider, has signed an agreement with Benefit Trust Company that gives Inspira another Custodial and Trading platform to offer to its clients. The two companies are also planning to mutually market Inspira’s IRA rollover services to the Benefit Trust Company’s existing clients and prospects.