We Specialize in
The Power of a Retirement Plan
To hire – and keep – top talent, you must compete with their other job offers. If an employee has two offers for roughly the same work and compensation, having a well-structured 401(k) plan could really pay off.
We know that starting a retirement plan for your organization is a big step that can appear daunting. You have probably participated in a 401(k) in previous jobs, but the fear of the unknown can be significant if you have little or no experience as a retirement plan sponsor.
At South Texas Wealth, we will work with you to design and launch your retirement program. Education is our passion, and we are committed to making sure you understand – and are comfortable with – each step in the process.
Glossary of Terms
3(21) Fiduciary: Shares responsibility for decisions with the plan owner
3(38) Fiduciary: takes on most of the responsibility for the investments
457: Government agency retirement plan
401(k): Private company retirement plan
403(b): Non-profit organization retirement plan
Annual Disclosures: Fee & investment info for employees
Contribution: Money deposited in the retirement plan
Deferral Percentage: Percent of income employees contribute
Distribution: Money taken out of the retirement plan
Eligibility: Requirements for employees participating in the plan
Enrollment Meeting: Presentation of plan to employees
ERISA: 1974 law establishing the Department of Labor to govern retirement plans
Fiduciary: Person with the authority, responsibility, & liability for decisions
Investment Policy Statement (IPS): Legal document describing how investments in your plan are chosen & reviewed
Low-Cost Investments: Investments with below-average fees
Management Fees: Service providers usually charge a percentage of the plan’s value
Matching: Employer contributions matching employee contributions
Mutual Fund: Pool of money from many investors managed by a professional team
Non-Discrimination Test: Test to ensure high-earning employees do not disproportionately benefit from the plan
Participants: Your employees
Performance Analysis: Rate of return on plan investments compared to national averages
Plan Design: Main features of your retirement plan
Plan Review: Annual review of plan performance and design
Plan Sponsor: The employer
Profit Sharing: Profit-based employer deposit in employee’s accounts
Recordkeeper: Company that acts as custodian and holds the funds for your plan
Retirement Plan: Employer-based plan offered by companies and public entities
Third-Party Administrator (TPA): Ensures company retirement plan is in compliance
Trustee: Person that oversees the retirement plan, usually the company’s owner
Features of A Successful, Employer-Sponsored Retirement Plan
The goal of 401(k), 403(b), and 457 retirement plans is simply to give your employees a way to save for retirement using part of their salary – before it is taxed. By setting aside pre-tax dollars, they are essentially able to increase the value of the money they contribute to the 401(k).
The goal is simple, but the delivery of this benefit for your employees is anything but. There is no one-size-fits-all solution because your plan must be tailored to the size, organization, and goals of your company, not to mention the goals and characteristics of your workforce.
As a plan sponsor, there are many decisions you must make – and your South Texas Wealth Advisor will walk you through each one. For example, is the company going to match employees’ contributions? How much? Are you going to offer a student loan benefit, and will that be tied to the 401(k)? Will the plan include profit-sharing?
Once your plan has been engineered, we will help with required documentation. This includes the writing of an Investment Policy Statement (IPS) that describes your responsibilities to the employees who take part in the plan.
For the plan you and your Advisor build, the final test is this: Will your employees appreciate the retirement plan, and build more loyalty to the company as a result? Our aim is to get you to a “yes” answer to this question.
Find the Right Advisor for Your Employer-Sponsored Retirement Plan
One of the most important decisions you can make for your employees is choosing to offer a 401(k) plan. The next most important decision is choosing an Advisor that understands your company’s goals and knows how to build the best retirement plan for you and your company.
For something as important as the right retirement plan for your company, choose an Advisor with the knowledge and skillset to get it right the first time.
Most advisors primarily help individuals create retirement plans for their golden years. Unless the advisor is immersed in employer-sponsored retirement plans, they may lack the necessary experience and knowledge to design the best 401(k) plan for you and your employees – let alone to offer ongoing guidance and coordination with the many vendors involved.
At South Texas Wealth, we have deep, foundational knowledge of the desirable elements for your individual situation – as well as the risks and benefits of choosing one element versus another. We constantly research and monitor the ever-changing market and available investment products to keep our knowledge current.
In setting up your plan, your STW Advisor will help you select the service providers and funds that best fit your organization. They will also ensure the highest quality investments are in your retirement plan.
Once the plan is implemented, you should expect your Advisor to work with the fiduciaries of your plan to regularly review and make adjustments. This requires the kind of fundamental knowledge of fiduciary standards and successful fund-selection you will find at South Texas Wealth.
We are fully independent, which means we don’t have a relationship with or a bias toward any particular vendor/provider or investment product. Instead of pushing you to buy into a particular plan, we put our vast knowledge to work to find the best fit for your company.
We provide the following services to maximize your employee benefits and control costs:
- Designing a Specific, Custom Plan for You
- Making Fund & Service Provider Recommendations
- Recommend and work with a 3(21) or 3(38) Fiduciary monitor investments and to reduce liability
- Educating and Communicating with both you and your employees
- Conducting Regular Reviews of Your Plan
Working with a Specialist in Retirement Plan Design
When designing a 401(k) retirement plan, our Advisor works with you to identify your goals and expectations for the plan. Are you most concerned about attracting and keeping employees? Is it intended as a way to give back to your employees? Are you seeking the maximum benefit to you, as the owner, along with your key people?
For most employers, it is a combination of these things – and more. Once we establish your goal and what the company is willing to contribute, we develop a plan design that will most efficiently achieve your goals.
The next step we take is to gather proposals from multiple vendors. These include price as well as the small, unique features and benefits that each vendor brings.
In our experience, it is sometimes these differentiating factors that make the difference between a plan that is easy and efficient for the company to administer, and a plan that becomes a nightmare for the company to provide. Our expertise and experience in 401(k) retirement plans gives us valuable insight into the things each vendor does well, along with the ideal circumstances to maximize their offerings.
As a Plan Sponsor, you have many decisions to make; as Advisors, we are here to provide consultation and guidance on your journey through the complexities of setting up a plan. Whether you need help starting, maintaining, or updating your retirement plan, we’d love to help. Click here for more information or to schedule a consultation.
We Help You Understand & Choose Your Liabilities
We serve in a fiduciary capacity for some low-cost plans. There are two kinds of fiduciary roles, named after the applicable sections of ERISA (the Employee Retirement Income Security Act of 1974). 401(k) Specialist Magazine explains them well:
3(21) Co-Fiduciary – “Help me”
- Shared fiduciary liability between the client and Advisor for the plan investments
- The 3(21) co-fiduciary recommends the selection and replacement of plan investment options, but the plan sponsor – you – must approve changes
- This arrangement is for plan sponsors that are comfortable assuming investment fiduciary liability
3(38) Investment Fiduciary – “Do it for me”
- The majority of investment responsibilities are lifted from the plan sponsor – you – and assumed by the 3(38) fiduciary
- The 3(38) investment fiduciary is responsible for the investment selection, monitoring and replacement of plan options; the plan sponsor is informed before any changes are made
- This arrangement is for plan sponsors that don’t have the time or the inclination to be responsible for the plan’s investments
We help each company create an employer-sponsored retirement plan that fits the organization's goals and delivers the best value and benefits to their employees.
- Jeremy Sakulenzki, Founder & CEO
Your STW Advisor, Educator, & Communicator
We know that the demands of a busy organization do not allow much time for you to become an expert in 401(k) retirement plans. We not only provide the expertise to fill the void, but will teach you as much as you want to know about the nuts and bolts of sponsoring a plan.
Our commitment does not stop with clear communication with you as the plan sponsor; we like to take an active role in your retirement plan by informing and educating your workforce.
We can hold enrollment and informational meetings, and send out important updates to you and your employees. More importantly, we are available for an email exchange or a one-on-one call/meeting with any employee that has questions.
If an issue comes up that can best be solved by a direct meeting between your staff and the plan provider’s education team, we will coordinate it for you. We can also provide additional educational material from the provider if needed.
We will have regular meetings with you, as the plan sponsor, to review your plan and gauge its success. But you can call or email any time with questions or to discuss your plan – we are here to serve you!
Conducting a Plan Review
When we review retirement plans, we look for the following:
- Is the plan up to date and compliant with current laws?
- What is the total cost of the plan (cost of funds in the plan plus fees)?
- Are these costs reasonable compared to state & national averages?
- Do your costs meet your fiduciary responsibilities to your employees?
- What investments are offered in your retirement plan?
- Is there a mix of low-cost options for your team?
- Is your plan easy for participants to understand?
- Is one-on-one education and advising available to your staff?
- Are annual education, disclosure, and other requirements being met?
- Are new employees and terminations handled properly?
- How are your service providers and recordkeepers selected & reviewed?
- How does your plan’s performance compare to others?
The Plan Review Meeting
When we meet to discuss the outcome of your plan review, we will cover the following:
- The service and overall health of your retirement plan
- Participation levels
- Deferral percentages
- Performance analysis results
- Loans against the retirement fund
- Non-discrimination testing results
- Employee enrollment activities
- Communication strategies
- Plan adherence to IPS objectives
- Regulatory updates relevant to your plan
Protecting wealth - that's our goal. Putting clients first - that's our guarantee.
- Jeremy Sakulenzki, Founder & CEO
