Plan sponsors looking to offload fiduciary risk, while hopefully cutting costs at the same time, have seen solution possibilities enter the market over the last several months as several providers have turned their attention to the small- and midsize plan market.
Earlier this year, LPL Financial broke out a 3(38) fiduciary service capability for advisors to the small plan market; Lincoln Financial expanded its small business retirement plan program; and Capital One, Fidelity and Betterment haven't been sitting idly by in producing or expanding offerings, some including or composed entirely of robo-advisor components.
And now Mercer has entered the fray, with Mercer Wise 401(k), which includes those small- to midsize businesses that may have limited resources or expertise in defined contribution plan management.
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According to Mercer, the launch of Mercer Wise 401(k) offers sponsors a "holistic" fiduciary solution that will reduce plan costs because of Mercer's global scale while providing participants access to institutional investment solutions and independent investment managers.
The solution is aimed at simplifying administration, minimizing fiduciary risk, "significantly" reducing fees and targeting participant outcomes. For plans using the solution, Mercer will take on the role of ERISA plan administrator, thus relieving plan sponsors of a number of administrative and operating functions, including meeting certain regulatory requirements such as Form 5500 filings, nondiscrimination testing and compliance testing.
The solution is also designed to monitor eligibility determination, approve plan transactions, oversee and manage service providers and oversee contributions and distributions, including all required notices.
In addition, Mercer will serve as named fiduciary, becoming responsible for investment decisions within the plans, and will select independent investment managers across a range of asset classes, providing sponsors with access to professionals experienced in managing risks.
The solution also provides participants with access to Mercer Financial Wellness, an open-architecture financial wellness platform that includes access to online budgeting tools, credit-score monitoring, a robo-advice solution, student loan refinancing and other services provided through third-party providers.
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