In mid-September, CAPTRUST launched Direct Fiduciary, a comprehensive retirement plan solution for small companies, in collaboration with T. Rowe Price and National Benefit Services (NBS).
Senior Director,
Defined Contribution Practice Leader
Geared to 401k plans with under $10 million in assets, the offering could nonetheless work with both larger and smaller plans, according to Jennifer Doss, Defined Contribution Practice Leader with CAPTRUST.
It’s especially timely given recent retirement plan-related proposals, Doss added, referencing American Retirement Association CEO Brian Graff’s comments at last month’s NAPA 401(k) Summit in Las Vegas.
“With the proposed Automatic Retirement Act, small employers with over five employees would have to have a retirement plan,” she explained. “This would be a great solution for those folks. We’d be able to bring something down market that we traditionally haven’t been able to bring down to those really small employers.”
Flexibility is a key component of Direct Fiduciary, with NBS acting as the 3(16) and third-party administrator (TPA), T. Rowe Price acting as the program’s recordkeeper, and CAPTRUST as the 3(38) and holistic investment advisor.
CAPTRUST chose T. Rowe Price partly because of their strong small plan network, but their larger plan platform as well, and scalability means any smaller plans that gain significant assets could migrate to the larger platform.
“CAPTRUST has over 1,000 401k plan clients that are under $10 million in assets, so we understand the unique needs of the small employer and how that can vary company by company.”
Jennifer Doss
Noting it’s a MEP/PEP alternative, she said current interest in pooled plans means many plans will launch, but adoption is still uncertain.
“All these things are going to be sold, right?” Doss said. “None of these things are going to be small employers reaching out and saying, ‘Hey, I’m looking to start a retirement plan, and I’ve figured out I want to PEP. That’s the best solution for me.’ They’re going to A) need help figuring out why they should start a retirement plan, or they’re going to be forced to obviously offer a retirement plan, and B) they’re going to need help deciding on the best option for them. For some employers with unique needs, they’re going to want more of a holistic touch, so those are the ones we’re focusing on.”
She added that demand for the product came largely from the wealth management side of CAPTRUST’s business, and specifically the small business owners that are wealth clients of the firm.
Platform specifics
CATRUST said Direct Fiduciary offers plan sponsors “the ability to improve plan outcomes, lower costs, and outsource fiduciary responsibilities to industry experts—all while maintaining flexibility as an individual plan.”
Employers can save time and resources by outsourcing 401k-plan administrative and investment fiduciary responsibilities.
As part of the program, CAPTRUST will assist plan sponsors with navigating certain fiduciary responsibilities that are not fully outsourced, including ongoing monitoring and due diligence of the plan’s service providers and determining fee reasonableness.
CAPTRUST will also provide virtual investment advice to plan participants through managed accounts and give plan sponsors the option to add one-on-one participant advice and financial wellness services. Links to both the virtual and one-on-one participant advice offerings from CAPTRUST are integrated within T. Rowe Price’s website.
The company added that PEPs and MEPs may limit the plan sponsor’s ability to work with certain payroll providers or utilize certain plan design features. Yet, Direct Fiduciary is an individual employer-sponsored retirement plan, allowing organizations to customize it to meet the unique needs of their employees.
“CAPTRUST has over 1,000 401k plan clients that are under $10 million in assets,” Doss concluded. “We understand the unique needs of the small employer and how that can vary company by company.”
MORE INFORMATION ABOUT DIRECT FIDUCIARY IS FOUND HERE