The current job market is unusually challenging for most companies. There are too few people qualified for too many jobs. As a result, being able to compete with other companies for employees has never been more important.

Potential new hires at any company are interested in two important questions before accepting a job offer: how much will they earn, and what benefits are available? A retirement plan is one of the most important benefits, but putting one together and managing it is not a once-and-done process. Retirement plan investment menus have to be revisited continually. Companies change, and sometimes they change what their plan’s investment choices are. Also, an investment class needs to be represented appropriately, but that also changes over time. Shifts and slippages can take place, such as when an investment might not be performing well. All of this requires specialized research and analysis.

Under the 1974 Employee Retirement Income Security Act (ERISA), a plan sponsor has fiduciary duties and responsibilities. The sponsor can be sued for negligence if those duties and responsibilities are not met. Outsourcing a company’s retirement plan is no different than outsourcing tax preparation, especially since handling a retirement plan on a company level exposes the company to legal liabilities. Hiring a company to handle the retirement plan is like hiring a tax planner, but the focus is on investment instead of taxes. It is a service that mitigates liability.

Any company that prefers to focus on company growth instead of implementing and maintaining a retirement plan in-house may want to transfer the responsibility and the requirements to an investment adviser. The adviser collects and monitors data and informs the plan sponsor before making any changes. The advantage of having a retirement exchange is that it is simple, easy to join, and has a proven 401(k) process.

There are several reasons why UAPA members may want to consider using Transamerica’s Retirement Plan Exchange:

1. It can give them economies of scale. For example, smaller companies can provide employees with better options than they could otherwise. Grouping people together is a great way to lower costs.
2. The Retirement Plan Exchange can make administration significantly easier. It can help with notices, approval and tracking administration duties.
3. It delegates fiduciary liability. On the administrative side, the Retirement Plan Exchange helps companies comply with ERISA section 3(16), which outlines the administrator’s duties. On the investment side, it helps them with ERISA section 3(38), which contains the rules for outsourcing the fiduciary investment position of the plan sponsor.

Transamerica and its partners lift the burden of plan sponsorship. They work with companies that don’t have the time or knowledge to run a plan. They also work with companies that don’t want the responsibility.

Organizations offering retirement strategies to companies generally involve three parties: a record keeper, an administrator and a financial adviser. They can be part of the same company, but separate companies can also choose to work together as part of a Retirement Plan Exchange. That’s the model for the plans Transamerica offers UAPA. Transamerica has the record-keeping role, DWC handles third-party administration, and financial advice comes from Taylor Dance, a managing director and consultant at GBS Retire. DWC is responsible for complying with section 3(16). GBS Retire acts as the plan’s registered investment adviser and is responsible for compliance with section 3(38).

Record keeping involves handling participant account paperwork. The paperwork includes statements (or anything else) related to an employee’s participation or servicing needs, including investment education. The administration involves maintaining the plan’s legal documents and ensuring the plan complies with regulations. For example, DWC sends out notices and approves loans or hardship payments based on the plan sponsor’s direction. Finally, the financial investor has 401(k) experts who determine which investments are allowed on the menu of investment choices, provide counseling and ensure funds are invested for clients based on their risk tolerance and goals.

A third-party administrator — such as DWC — provides a significant advantage for two reasons. First, qualifying to become a 3(16) fiduciary administrator involves additional testing and regulatory compliance, which means fiduciaries can give clients a higher level of service. Second, the separation between companies makes acting as fiduciaries easier. The company is responsible for acting in all its clients’ best interests and ensuring the Retirement Plan Exchange performs its duties. To ensure accessibility to plan sponsors, however, DWC has an office in Utah.

Because of how Transamerica’s retirement programs are organized, companies that sign up with Transamerica for their employees can feel confident that a professional is reviewing and monitoring everyone’s choices.

Employers who sign up to use Transamerica pay a $750 installation fee to cover the cost of Transamerica’s services. Later, employers also pay an annual administrative fee of $1,000. The fee for employees who participate is $22 annually.

“Transamerica and its partners are a great place to start for association members who don’t have a retirement plan,” said Wayne Ericson. “Professionals in the investment retirement space sometimes use many acronyms and discuss concepts that are not simple or intuitive. It can be hard to understand. But if business owners have questions or want to review their plans, I would love to talk to them. I will discuss what we offer with anyone who is interested, and I am more than happy to help them.”