ADP recognizes that you have a business to run, they make it as easy and efficient as possible to monitor retirement plan investments so you can devote more of your time to making your business grow. Every quarter, ADP prepares a scorecard for all of the funds it offers, comparing performance to well-defined criteria found in ADP's own investment policy statement. The scorecard is easy-to-use and understand. It looks at a number of both qualitative and quantitative screens and just like a school report card, each investment either "passes" or "fails".
As a plan sponsor, the benefits are obvious. You can piggyback off ADP's analysis as you make decisions about adding or removing funds from your own company's core lineup. Because ADP doesn't "manufacture" investment product, there are no built-in conflicts of interest associated with firing a proprietary investment manager. ADP never places itself in that difficult position of having to choose between the needs of its customers (e.g., plan sponsors and participants) and it owns profit motives. So you don't have to worry that the advice you are getting is contaminated with a hidden profit motive.
With ADP you have the full resources of a major retirement provider watching the performance of the funds and alerting you if the fund fails to meet its clearly spelled out performance criteria. With so many providers out there concerned about pushing their own investment product or looking to distribute funds for which they receive the highest revenue, it's refreshing to see a company design its product so that it helps you to make sound fiduciary decisions. Given the current mutual fund scandal and the fact that many sponsors don't have a lot of time and resources to spend on these matters, ADP's investment process should help its clients sleep better at night. With ADP, the processes are in place for both fund selection and performance monitoring to satisfy the fiduciary responsibilities detailed in ERISA.
Your fiduciary duties are on-going, for as long as you sponsor a retirement plan. Make sure you choose a service provider that will stay with you, that's committed to helping you fulfill those duties. That's your only and best defense if you ever need to prove that you did the right thing.
Download a Sample Quarterly Scorecard
Please note that neither Blue Prairie Group nor ADP can provide you with legal advice regarding your fiduciary duties under ERISA. This article and those following are not intended to constitute or be relied on as legal advice, but a description of applicable principles. Please consult with your attorney for legal advice on matters contained in these articles.
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