New Study Provides 403(b) Market Overview
WEST HARTFORD, CT, September 20, 2011 -- Sponsors in all segments of the 403(b) market are looking to their providers as 403(b) partners and experts. Providers offering solutions to help ease plan administration and cost will have a competitive edge. Government regulation and more transparent fee reporting are driving both innovation and consolidation.
Consolidation has allowed the major players to fully leverage their brand. Fidelity, ING, TIAA-CREF and VALIC continued to solidify their positions in the marketplace -- the big became bigger. We expect bundled providers to continue promoting the benefits of a single vendor as a means of streamlining recordkeeping and administration and reducing administrative fees.
| Service Model |
| Single Provider | Multiple Provider |
| Diversified | AXA |
| Hartford | Fidelity* |
| Great-West | ING |
| MassMutual | Lincoln |
| MetLife | Prudential |
| OneAmerica | VALIC |
| Principal | |
| TIAA-CREF | |
*Case by case
Source: RRI Proprietary Data |
The new rules are making 403(b) plan sponsors increasingly aware of their heightened fiduciary exposure. They may also help reduce plan fees. Since the new rules went into effect, more employers have also joined consortia to boost buying power and lower costs.
According to Ron Bush, Managing Principal of RRI, "Because of the dramatic and rapid necessity for regulatory compliance regulations, in an unprecedented spirit of cooperation, 403(b) providers, advisors and TPAs began to work cooperatively to avoid what could have become a nightmare." Each channel brought its strengths to educate sponsors, assist in compliance and remediation, develop investment policies, prepare for plan audits and prepare Form 5500.
We expect bundled providers to create triage teams that will become expert at corrections that arise. "Eventually, non-ERISA plans will cease to exist. For most plan sponsors, making sure that they are not acting in any administrative capacity will end up being more work than to simply comply," said Aleida Herzog, RRI Director of Tax-Exempt Markets.
About RRI
Retirement Research, Inc. is focused exclusively on the retirement services industry, offering profiles of leading providers and products in the defined contribution market, interactive web-based competitive analysis tools covering both product and investment platforms, topical research reports and research-based services.
Founded in 1999, we assist insurance, investment, retirement services and distribution companies in addressing strategic issues, solving marketing problems, enhancing product capabilities and improving distribution effectiveness through our information products and consulting services.
###
Click here for more material dealing with current trends, opinion, news, legislative action, investments, marketing, sales, consulting, and legal issues on 401k plans.
This is a press release provided by the company or its representatives. 401khelpcenter.com, LLC is not the author of this release and is not associated or affiliated with any firm or organization mentioned unless otherwise noted. Use of any information obtained from this release is voluntary, and reliance on it should only be undertaken after an independent review of its accuracy, completeness, efficacy, and timeliness. Reference to any specific commercial product, process, or service by trade name, trademark, service mark, manufacturer, or otherwise does not constitute or imply endorsement, recommendation, or favoring by 401khelpcenter.com, LLC.
