Planning your 401K
As a growing company, you want to give your employees the absolute best benefits. With the demise of pension plans and social security, the 401k has become the single most important savings vehicle for many employees today. Verde Capital Managements 401k Services allows plans sponsors to have confidence that their 401k is capable of exceeding the most demanding employee’s expectations. Our process begins with a thorough review of goals and objectives, risk tolerance, time horizons, and the menu of investment choices. From there Verde will design and implement a custom 401k that gives choices to employees and allows for professional money management, self directed investing, online retirement income planning, account aggregation and more.
Professional money management
Most investors today don’t have the time to research and monitor their 401k plans. Without proper attention, many accounts just languish in a plans cash fund, or oscillate wildly with the stock market. With the majority of money market funds yielding less than 1% and with the stock market making less than 2.5% over the last 10 years, the “set it and forget it” approach to investing is not working. It is for this reason that Verde Capital Management created their professional money management program. With this program, employees can hand over the day to day management of their 401k to a professional money manager who will focus their full attention on making their account grow. With an endowment inspired investment approach that seeks to get the absolute highest rate of return for a given level of risk, Verde’s money managers will research and maintain top quality mutual funds, in a variety of asset classes. Whether investing in foreign stock, looking at domestic real estate, trading commodities, or protecting a portfolio using a hedge fund, Verde’s money managers can go anywhere to make money. This approach truly liberates 401k investors from the burden of managing their money and allows them to focus on their work, health, family, and faith.
Self-directed investing
Although many investors do not like managing their own accounts, there are others that truly understand and enjoy investing in the stock market. For many of these investors, Verde has partnered up with Fidelity Investments to offer a truly open architecture environment. Under this platform investors can manage their 401k at their discretion and with no limits. With over 20,000 mutual fund choices, ETF’s, US and foreign stocks, commodities, real estate, currencies, private equity, and hedge funds, investors will have an unparalleled universe of choices. Best of all, since Verde’s advisors do not manage these accounts, there is not management fee for any employee that chooses this path.
Online tools
In addition to having their accounts grow fast, many employees today need help planning their retirement. Due to the complexity of trying to manually create a financial plan we have embedded several retirement planning tools onto the 401k website. Whether accumulating wealth toward retirement, or living in retirement and calculating possible distributions, our financial planning tools can help investors calculate a successful outcome.
Account Aggregation
With today’s workplace trends, we know the average working adult will have over 7 job changes over a working career. This presents some problems with managing accounts from previous employers. In addition to our rollover options, many employees will find it particularly valuable to know that we have the ability to aggregate all accounts into the 401k site. Whether the plan is an old 401k, brokerage account, or money market fund we can link the account electronically and report up to date data. This allows investors to have a truly comprehensive real time view of their finances.
Fiduciary Services
Verde Capital Management is in a position to assume the legal position of Fiduciary for each of our clients. Under this ERISA-defined section 3-38, we act as a plan’s discretionary investment advisor and perform all the complex investment management duties that would otherwise be the obligation of the plan sponsor or its designated investment committee. As a retirement plan sponsor, your company needs to be aware of your responsibilities relating to the administration of your plan and what steps you must take to comply with the rules and regulations under ERISA. We have found that few plan sponsors completely understand their retirement plan duties and their personal liability under the law. As a Fiduciary, we acknowledge in writing our roles and the responsibilities under ERISA. This is a tremendous benefit for plan sponsors since it helps to insulate and protect them, and virtually eliminates investment related fiduciary responsibilities.
Plan Administration & Recordkeeping
A critical element for many companies sponsoring a 401k plan is the administration and record keeping. This often burdensome task is particularly time consuming when dealing with a large number of participants. With our custodial relationship with Fidelity Investments we have access to the world’s largest and best recordkeeping platform. With this web based plan sponsor portal your administrative burden will be significantly reduced through our full HR and payroll integration. Our system allows for employees to make their own changes to payroll deductions, beneficiaries, loans, and rollovers with no manual input from the employer. In addition to these ongoing changes, plan setup is a breeze. With auto-enrollment we can make sure all your employees are automatically enrolled and participating in the plan. With our auto-increase function, we can gradually increase average deferral rates across your plan to ensure the plan does not become “top heavy” and prevent your highly compensated employees from participating fully in the plan. This leading edge technology is fully integrated with our offering, and given Fidelity’s $3.2 trillion in assets under administration; you can rest assured that you have the best recordkeeping platform in the market.
Financial Education and Planning Services
Statistics have shown that around one in four eligible employees do not participate in their 401k plan. Of those who do, less than 1 in 10 contribute the maximum. With the demise of pension plans and social security, employees need to understand the importance of 401k participation and adequate savings. Verde Capital Management’s advisors are committed to communicating and educating your employees in a proactive and deliberate manner in an effort to significantly improve these numbers. Our process is structured to ensure that quarterly companywide meetings take place, by having “fact-to-face” contact, and creating customized educational content specific to your company’s employees. Using these tools we demonstrate the importance of participation and help employees determine their appropriate deferral percentage.
