Retirement Plan Services
Independence • Expertise • Insight
Investment Policy Statement
An Investment Policy Statement provides plan fiduciaries with a disciplined framework and set of established, prudent standards for the management and oversight of the retirement plan. The policy develops the due diligence and decision making process for sound plan governance.
The Benefits of a Well-Developed IPS
• Acts as the foundation for how an investment program is to be administered by providing clear risk and return objectives
• Establishes the proper performance evaluation methods, and any constraints that must be taken into account
• Helps avoid poor decision making by applying a disciplined and systematic investment approach, which increases the likelihood of meeting investment goals
• Creates a record of decisions and an objective means to test whether those serving the investor are complying with the plan's requirements
• Annual reviews help fulfill fiduciary responsibility required by US regulation
Bridgebay creates a policy that sets the plan objectives, authorities and responsibilities, addresses plan fees, educational objectives, 404(c) compliance and establishes overall controls consistent with ERISA, DOL and relevant regulatory legislation. The policy establishes a prudent procedure and process for plan management, monitoring and investment monitoring decisions.
The investment policy statement acts as the foundation for how an investment program is to be administered by providing risk and return objectives, performance evaluation methods, and any constraints that must be considered.
Asset Allocation and Gap Analysis
An efficient asset allocation in the fund line-up will enable plan participants to create diversified portfolios that will provide sufficient future retirement income.
The asset allocation and fund choices are the most visible aspects of the plan.
We work with plan sponsors to develop an asset allocation structure that is appropriate for their participants. The asset allocation decision seeks strong representation in each asset class, diversified by investment style, and an appropriate risk/return profile.
A well designed fund line-up assists plan sponsors in meeting 404(c) requirements and provides an opportunity for participants to prepare for a secure retirement.
Our Gap Analysis assesses plan’s fund lineup along the risk/return spectrum and identifies where gaps and redundancies exist. A fund line up can have high number of funds yet not provide sufficient diversification. The Gap Analysis may also indicate a need for risk-based (conservative, moderate, aggressive) asset allocation funds and/or target-date funds.
Investment Fund Analysis
Investment Due Diligence
Bridgebay evaluates the overall fund menu to ensure that the asset classes are well represented, cost effective and provide a broad range of funds including actively managed and indexed funds that will ensure participant success. At all times, we ensure that all investments in the plan are consistent with the plan’s investment policy statement (IPS).
We evaluate the fund selections relative to the plan’s unique characteristics such as asset size, number of participants, demographics of participants, cash flows and additional retirement benefits offered by the plan sponsor. Often, participants have a preference for socially responsible investments and green funds.
The analysis focuses on the most cost effective structure that optimizes asset allocation for participants yet considers the administrative aspects of managing the plan efficiently.
Bridgebay’s institutional, investment due diligence is based on our proprietary research prepared by our team of Chartered Financial Analysts (CFA) and experienced investment professionals that have been institutional fixed income and equity portfolio managers. Their institutional quality research on investments and fund menus is well-documented and presented to your Committee.
Target-Date Funds and QDIA Evaluations
Bridgebay evaluates target date fund suites and the underlying investments to ensure your plan has best-in-class asset allocation funds.
Target Date Funds
Bridgebay uses a range of advanced quantitative tools to assess the performance, quality, asset allocation and embedded fees of target date funds. Our analysis helps plan sponsors understand how their plan's target date funds perform separately by date, compared to a third party benchmark and their peer funds.
Target date funds are all different with variations in asset allocation and glide paths. Some blend traditional and alternative asset classes, include derivatives, and use index and proprietary funds.
Many target date funds provide their own custom benchmark which mirrors their own asset allocation and glide path, making evaluations as to the effectiveness of the fund management and asset allocation decisions murky and comparisons between target date funds suites difficult.
Many fund families continue to make modifications to their target date funds' underlying asset allocations which may be hard for plan sponsors to properly evaluate. As the industry continues to evolve, DOL best-practices recommend that plan sponsors evaluate their target date providers every three to five years.
Bridgebay has the knowledge, experience and analytical tools to ensure that your plan's target date fund due diligence review is thorough and comprehensive.
We assist plan sponsors to recapture fees through an ERISA budget account that can be used for additional plan services.
New fee disclosure requirements under DOL section 408(b)(2) legislation require defined contribution plan providers to disclose all fees. Many fee structures have been hidden and are complex to understand. The plan sponsor’s fiduciary responsibility is to ensure that fees are reasonable.
Total fee transparency enables the plan sponsor to enhance plan services, negotiate more competitive and reasonable fees. We benchmark your plan expenses against a universe of similar plans and identify areas for improvement. We assist plan sponsors in negotiating service provider fees.
Fee transparency benefits plan sponsors by comparing their plan fees to the industry averages and similar plans. We identify total fund fees, expense ratios, wrap fees, 12b-1, and revenue sharing arrangements and the services covered for those fees.
We provide a summary of all asset-based fees and fixed fees, both direct and indirect expenses. We identify all of the providers paid by the plan fees for their services and additional funds available to the plan for additional services. Our fee analysis is summarized in a matrix which highlights the underlying costs of the plan.
Investment Performance and Plan Monitoring
Key to a prudent fiduciary process is the ongoing investment review and plan monitoring program. Our consultants present our evaluation and review the fund performance with your Investment Committee quarterly. The fund performance summarizes quantitative and qualitative factors, peer comparisons, investment category rankings, and custom benchmark and market index comparisons.
Proprietary Scoring System
Our proprietary scoring process measures fund quality and synthesizes volumes of financial data into clear, concise summary information. Every member of your Investment Committee understands and has the confidence that they are making informed decisions.
We customize presentations to meet your specific level of detail and format. Our user-friendly Committee reports take complex statistics and deliver an investment review that flags priority issues for your Committee to address.
Our consultants meet quarterly with your Investment Committee and proactively hold ad hoc meetings during uncertain markets.
As your retirement plan advisor we help you understand the factors that influenced the investment performance. We measure fund performance, attribution, manager success and value-added, risk controls, volatility, consistency of performance, use of leverage and derivatives, and soundness of the strategy. We monitor qualitative issues relating to the management stability, research quality, discipline, and potential conflicts of interest.
The Department of Labor regulations under ERISA, and the new 408(b)(2), require that plan sponsors obtain full fee disclosures for their plans and that all such fees be “reasonable” for the services provided. Plan benchmarking helps plan fiduciaries meet their fiduciary obligations under ERISA.
By benchmarking your plan against other peer plans, plan sponsors can enhance plan design, ensure fiduciary prudence, mitigate plan risks, identify reasonable fees and improve participant services.
Benchmarking reports provide fiduciary documentation of an impartial, well-documented prudent process that can lower the possibility of potential litigation or reduce fiduciary liability insurance costs. Fee transparency enables plan sponsors to re-negotiate provider fees and determine “reasonableness.”
Benefits of a Plan Benchmarking Study
• Establishes a record for audit and helps fulfill a firm’s fiduciary responsibility
• Provides validation of due diligence process to meet new regulation
• Promotes competitive pricing from new or existing plan providers
We benchmark your plan against similar peer plans that are comparable by industry, plan size, complexity, participation, employer contributions and investment offerings. Our reports are effective tools for plan management, oversight and support plan design decisions based on a standard of best practices.
Provider Search and Evaluation
Our RFP provider search is customized to focus on services that are important to your plan. We emphasize open architecture, efficient administrative services, best-in-class funds, fee transparency, effective participant education and communications.
Bridgebay’s RFP database tracks over 90 service providers. Based on your plan's assets, complexity, and participants we provide the depth of information for you to select the most appropriate providers.
Bridgebay’s custom RFPs are constructed from a comprehensive database of over 500 questions that we can modify to cover key service areas including:
• Administration & Recordkeeping
• Technology, Security and On-Line Services
• Fees (Direct and Indirect)
• Employee Education and Communications
• Fiduciary Services
• Legal and Regulatory Filings
• Conversion and Transition Timetable
Our scoring matrix enables plan sponsors to consider a large number of qualified providers and evaluate them fairly using consistent criteria for assessment. Our scoring matrix ranks providers, side-by-side comparisons of services and costs, and financial strength.
Our RFP services are a thorough, well-documented due diligence process that can be used for audit and fiduciary purposes. The documentation and extensive evaluation validates your final provider selection as a plan sponsor.
We strive to identify the best fit provider with the highest quality investments and level of services at the most competitive price.
Legislative and regulatory changes continue to burden plan sponsors with changing rules requiring a continuous review of plan design and compliance.
As retirement plan experts we coordinate closely with plan sponsors and their providers to ensure that critical legal, design and compliance issues impacting the plan remain current.
• Automatic plan features
• Pre-tax and after-tax contributions
• Employer match
• Company stock
• Brokerage window
• Loan provisions
• Payroll transmittals
• Online data security
• Participant communications
We review the plan data with the investment committee such as participation levels, average balances, allocations among funds, number of funds per participants, usage of funds, lifecycle and asset allocation funds and peer plan sponsor surveys. We also review the fund and plan expenses for opportunities to enhance participant services.
Fiduciary and Retirement Committee Services
Co-Fiduciary to Your Plan
As a plan sponsor, your role as a Human Resource professional, Treasury professional or Retirement Committee member make you a plan fiduciary. As a co-fiduciary to your plan, our experience and credentials enable us to implement effective plan governance procedures that mitigate fiduciary liability and provide best practices in plan monitoring and management.
Bridgebay offers a comprehensive fiduciary oversight process that ensures independent plan governance and monitoring. The complexity of 401(k) and 403(b) plans has never been greater. We assist in instituting prudent procedures and due diligence processes that protect plan fiduciaries and executives by mitigating fiduciary liability.
We deliver the following services as part of our ongoing engagements:
Annual Fiduciary Plan Review
Investment Policy Statement updates
Benchmark service provider fees and expenses
Full fee disclosures per requirements of 408(b)(2)
404(a) and 404(c) compliance guidance and monitoring
Fiduciary education for Committee members on duties and obligations
Establish Committee by-laws
Document objective fiduciary process
Maintain meeting minutes and internal control files
Document an investment due diligence process
Investment evaluations per the Investment Policy Statement
Communicate regulatory and legislative changes
Annual employee communications plan
Employee Communications and Education
An effective, ongoing employee communication program is critical to the success of any retirement plan. Bridgebay helps clients determine the most effective education and communication strategy for their participants.
Developing a Strategy
We understand that development needs vary greatly across industries and work with you to design and execute the most appropriate program for specific employee cultures. Consistent implementation of the plan increases employee understanding and participation while raising the profile and appreciation of the benefit.
We will work with you and your provider to establish an annual communications program which will allow your committee to set expectations and measure success. We monitor plan participation, deferrals and diversification measures which may indicate the quality and level of participant communications.
A tailored communications program may require the provider to give more on-site group meetings, webinars, online education and auto enrollment which will prompt employees to take action.
• Pre-enrollment communications
• Re-enrollment services
• Payroll stuffers, post cards, targeted communications
• On-site group meetings
• Multi-lingual materials, online and phone representatives
• Video conferencing capabilities
• On-line investment, financial planning tools
• Webinars on current topics
Enhancing the Plan
A well-crafted communication program will enhance participation, satisfaction, understanding of asset allocation and risk tolerance. This also helps plan sponsors to meet 404(c) requirements to provide adequate education about investing in the company’s 401(k) plan.