For more information about Callan’s Defined Contribution Practice, contact Lori Lucas at lucas@callan.com.
Recordkeeping firms are invited to complete our Recordkeeper Questionnaire to be included in analysis provided to Callan clients.
Callan has the expertise to guide you through all phases of the DC plan management process with services for plan review and fee analysis, recordkeeping searches, and manager/fund evaluation and monitoring.
Callan offers defined contribution consulting services to:
Defined contribution plan fees are increasingly coming under the microscope. The Department of Labor is currently working on several initiatives to increase disclosure and understanding of plan expenses. In addition, a number of lawsuits have recently been filed concerning defined contribution plan fees and disclosure. Most plan sponsors agree that fund expenses impact employees’ investment returns. Even so, truly understanding and benchmarking the appropriateness of defined contribution plan costs can be a daunting task. That is why, according to a survey of plan sponsors of large DC plans, while 71% of plan sponsors report that they are either somewhat or very concerned about total plan cost, only five in ten have attempted to calculate the total plan cost of their 401(k) plans. Concrete steps that plan sponsors can take to address concerns around DC plan costs are:
Callan regularly conducts defined contribution plan service provider searches and fee analyses for our clients; the process and results can help accomplish four objectives:
Callan provides ongoing plan and investment manager monitoring to ensure that plan sponsors continue to have the knowledge and information necessary to meet their fiduciary responsibilities. We typically provide clients with quarterly performance measurement reports, including analysis of the current capital markets and a comparison of performance within each peer group. Reports can be delivered via hard copy or electronically.
Ongoing monitoring also encompasses your service providers to make sure service levels, new product development, and fees remain competitive. In addition to mutual fund/investment manager evaluation, we suggest a periodic evaluation of your recordkeeper and custodian within the context of industry developments. The transparency of recordkeeper and custodial fees has recently become an increasingly discussed topic for many of our plan sponsor clients.
The Callan DC Index™ is equally weighted and tracks the cash flows and performance of approximately 70 plans, representing more than 800,000 defined contribution participants and over $80 billion in assets. The purpose of the Callan DC Index™ is to understand the asset allocation of defined contribution plans, track defined contribution fund flows, and measure the performance of defined contribution plans. This Index is updated quarterly and reflects 401(k) plans as well as other types of defined contribution plans.