A third-party administrator (TPA) assists the plan sponsor with plan document design, compliance testing and Form 5500 preparation.
American Funds assists the plan sponsor with plan document design, compliance testing, eligibility tracking and Form 5500 preparation.
The American Funds fixed-dollar approach to plan pricing is designed to be low-cost and transparent and to provide better overall value. Our investment and recordkeeping pricing can help you win and retain plans on the basis of our low all-in plan cost.
We also offer a variety of compensation options for fee-based advisors, commission-based advisors and TPAs. Recapture accounts for advisor and TPA compensation are available for share classes R-2, R-2E, R-3 and R-4.
With the American Funds approach to plan pricing, plan assets – depending on the share class – generate a plan credit that can offset plan expenses. Over time, net plan expenses, as a percentage of assets, will decrease as assets grow.
Step 1: Determine the annual recordkeeping fees based on the number of plan participants.
Step 2: Choose a share class depending on (1) how the plan sponsor wishes to pay for the recordkeeping fees (with or without expense ratio revenue generated by plan credits) and (2) what level of compensation is necessary to meet the plan’s service requirements.
Plan credit and advisor and TPA compensation, if any, are included in the average expense ratio.
An example of how plan credits can offset recordkeeping expenses:
Gross annual recordkeeping fees
Plan credit/Expense offset (annual credit rate times plan assets)
Net annual recordkeeping fees (credit)
With PlanPremier you can develop a diversified menu intended to improve retirement outcomes.
The true test of any long-term retirement plan solution is the level of service and support the provider offers to you, as the plan advisor, your plan sponsor clients and their plan’s participants.
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.
Although the target date funds are managed for investors on a projected retirement date time frame, the funds' allocation strategy does not guarantee that investors' retirement goals will be met. The target date is the year in which an investor is assumed to retire and begin taking withdrawals. American Funds investment professionals manage the target date fund's portfolio, moving it from a more growth-oriented strategy to a more income-oriented focus as the fund gets closer to its target date. Investment professionals continue to manage each fund for 30 years after it reaches its target date.
Content contained herein is not intended to serve as impartial investment or fiduciary advice. The content has been developed by Capital Group, which receives fees for managing, distributing and/or servicing its investments.