The iJoin program seeks to manage risk by efficiently positioning your investment according to the program’s analysis and your personal risk tolerance, age, savings and retirement goals.

401k legislation is ever changing and the rules outlining the responsibilities of a fiduciary are clear. The penalties for a fiduciary who has knowingly or unknowingly participated in an act that may be detrimental to an employees account can be severe. All too often, significant ancillary investment, record keeping, advisory, and administration fees are subtracted without sponsors and participants knowing the full extent of how their accounts are being reduced. Starting in January 2012, new DOL legislation requiring detailed fee disclosure will go into effect to address the current inadequacy of the rules. Rules 408(b)(2), (effective April), and (404(a)(5), (effective within 60 days of rule 408(b)2), will finally enable plan sponsors and participants to make informed decisions regarding plan choices and allow for plan comparisons like never before. Plan sponsors are obligated to ensure that their plans will be in compliance with the rules, and, as previously mandated by the Pension Protection Act of 2006, that fees being charged are “reasonable”. 401k management companies can mitigate a plan sponsor liability, including potential penalties and litigation.

When it comes to risk, many investors just assume that it is the “price of admission” for being invested in the market. They think they will just have to go along for the ride. What they don’t realize is that there are 401k management companies to help manage risk – by understanding the market and carefully monitoring its movements. But this task is not something easily undertaken alone. It is a job best left to the techniques of 401k management companies who make it their mission to monitor the market each and every day.

What can the iJoin participant enrollment solution provide your 401k plan participants?

• Interactive and professional fund selection
• Behavioral analysis portfolio diversification
• Dynamic weighting based on individual circumstances and responses
• Risk and reward strategies tailored to a participant’s specific circumstances

The iJoin program seeks to manage risk by efficiently positioning your investment according to the program’s analysis and your personal risk tolerance, age, savings and retirement goals. The process is designed to reduce volatility and favors capital preservation by selecting the asset classes and styles that are proving to be strong performers (positive momentum) and eliminating the asset classes that are experiencing poor performance (negative momentum). This program does not guarantee that your investment will be in the best performing fund over any given time period.

We urge you to contact us now in order to assist you in the above. We will help you address your company’s retirement plan needs and obligations.

Many plan sponsors want to know how their 401k plan stacks up to the typical or average plan. This is often the first question asked when attempting to determine whether an effort should be made to upgrade the features and benefits of the plan.

Eligibility: Short service requirements (less than three months of service) are now common for participant contributions. In 1998, only 24 percent of plans allowed employees to begin contributing to their 401k plans immediately upon employment. Now, 60.3 percent of all plans permit immediate participation in their 401k programs. Short service requirements are even more common at large companies — 74.2 percent of companies with 1,000 or more employees provide immediate eligibility and 89.7 percent provide eligibility within three months.

• Immediate (one month or less)   60.3%
• 3 months or 90 days        15.3%
• 6 months or 1000 hours                 9.8%
• 1 year    11.2%
• Other    3.3%

Minimum Age Requirements: The common minimum age requirements for participation are:

• None     43.1%
• 18 Years Old       20.1%
• 21 Years Old       35.4%
• Other Minimum Age      1.5%

Vesting Schedules: Thirty-nine point five percent (39.5%) of plans provide immediate vesting for matching contributions, while 23.0 percent provide immediate vesting for profit sharing contributions. Among plans that do not have immediate vesting, graduated vesting is the most common arrangement for all plan types.

Automatic Enrollment: Thirty-eight point four percent (38.4%) of plans have an automatic enrollment feature. Automatic enrollment is most common in large plans — 53.7 percent of plans with 5,000 or more participants report having automatic enrollment. The most common default deferral is 3 percent of pay, present in 58.0 percent of plans. 53.1 percent of plans automatically increase the default deferral percentage over time.

Seventy-two percent of plan sponsors use a life-cycle or target date fund (TDF) as the default investment option, and 13% use a balanced or lifestyle fund. Sponsors of smaller plans are more likely to use TDFs — 78% of plans with $10 million to $99 million in assets use TDFs compared with 68% of plans with $1 billion or more.

Employer Contributions: Company contributions average 2.1% of payroll.

Numerous formulas are used to determine company contributions. The most common type of fixed match, reported by 27% of employers, is $1.00 per $1.00 up to a specified percentage of pay (commonly 6%). Twenty-three (23%) of all plans match $0.50 per $1.00 up to a specified percentage of pay (most commonly 6%).

Company Stock as Match: Only 17% of employers invest the employer matching contribution exclusively in company stock. Of those that do default the match exclusively to employer stock, there are fewer restrictions associated. Currently, 84% of these plans allow employees to diversify or transfer employer matching contributions at any time.

Employee Participation Rate: Eighty-nine percent (89%) of U.S. employees at companies offering a 401k program are eligible to participate. On average, 87.3 percent of eligible employees have a balance in the plan. Twenty-two point four percent (22.4%) of plan participants are no longer actively employed by the plan-sponsoring company.

Investment Options: The number of funds offered to plan participants appears to be leveling out after many years of steady increase. Plans offer an average of 18 funds for both participant and company contributions. The funds most commonly offered are actively managed domestic equity funds (87.3 percent of plans), actively managed international equity funds (86.0 percent of plans), and indexed domestic equity funds (82.4 percent of plans). The availability and use of target-date funds continues to grow. 62.3 percent of plans now offer them.

Investment Committee: Thirty-three percent of plan sponsors have no investment committee, though it varies heavily by plan size. More than half the plans with less than $5 million in assets did not. Fewer than one in 10 of plans with more than $5 million in assets did not have such a body.

Investment Policy Statement: Ninety percent of all plans have a written investment policy statement, but only about half of those with less than $5 million in assets do.

Investment Advisors: Sixty-six point seven percent (66.7%) of companies retain an independent investment advisor to assist with fiduciary responsibility. For 54.2 percent of those companies, the fee is a fixed amount and for 36.1 percent the fee is percentage of plan assets.

Investment Advice: Advice is offered in 60.1 percent of plans. Twenty-one point six percent (21.6%) of participants used advice when it was offered. Participant usage tends to be greatest in small plans.

Roth 401k: Among plans that permit participant contributions, 41.3 percent allow participants to make Roth after-tax contributions. Only 13.0 percent of participants make Roth contributions when offered the opportunity.

Catch-up Contribution: Catch-up contributions for participants aged 50 and older are permitted in 98.0% of plans. Thirty-one percent (31.0%) of these plans offer a match on the catch-up contributions.

Self-directed Brokerage Accounts: Self-directed brokerage accounts are offered in 15.5 percent of plans, while open mutual fund windows are offered in 8.3 percent of plans. On average, plans invest 2.2 percent of plan assets through brokerage windows and 1.5 percent through mutual fund windows.

Loans: Sixty-one percent of the 401k plans offer a plan loan provision to participants. The loan feature is more commonly associated with large plans (as measured by the number of participants in the plan). Ninety-four percent of plans with more than 10,000 participants included a loan provision, compared with 35 percent of plans with 10 or fewer participants. There is modest variation in participant loan activity by plan size, ranging from 17 percent of participants with loans outstanding in 401k plans with 26-100 participants to 23 percent of participants in 401k plans with more than 5,000 participants. Loan ratios vary only slightly when participants are grouped based on the size of their 401k plans (as measured by the number of plan participants). Among participants in plans with 100 or fewer participants, the loan ratio was 18 percent of the remaining assets, while in plans with more than 10,000 participants, the loan ratio was 15 percent.

Hardship Withdrawals: Hardship withdrawals are permitted in 85.6 percent of plans. The most common reasons for permitting hardship withdrawals include purchase of a primary residence or to prevent eviction or foreclosure (97.9 percent), medical expenses (97.2 percent), and post-secondary education expenses (93.5 percent). 1.9 percent of participants took a hardship withdrawal, when permitted.

Safe Harbor Plan Design: Thirty-four point two percent (34.2%) of plans have a Safe Harbor plan design in lieu of ADP/ACP testing.