A plan’s investment lineup can have a dramatic impact not only on the cost of a plan, but can influence retirement outcomes.  Failure to manage fund selection and fund expenses can not only lead to poor performance, but can sometimes create a rift, or even legal issues between plan sponsor and participants.  Just like plan management, the investment choices within a retirement program cannot be ignored, but must be managed and updated over time.  Plan sponsors cannot assume that if nobody is complaining everything must be okay. 

Key questions for Retirement Accounts

·         Should I offer passive or active fund types?

·         How many funds should I include in my plan?

·         Can our plan obtain similar performance from a lower cost option?

·         How often should I review the fund line-up

 

The Six8 Approach:  Once we have the right service providers, it is time to manage the investments.  We strongly suggest that each of our clients implement an Investment Policy Statement (“IPS”) to govern the inclusion and exclusion of investment options.  Once a IPS is in place, then Six8 goes to work to help our client companies monitor and manage their fund line-up according to the “rules” or formula outlined in the IPS. 

A successful IPS will look at various charactistics of the fund line-up, including:  asset classes, fund scorecards, fees and performance.  With the right formula for success, the ongoing management of the fund line-up can become straight-forward.