Without speculating on Hartford’s reasons for withdrawal from the retirement plan space, it would be an excellent time to look for 401(k) services providers.
We would suggest you look for a fee-only advisor, who can hopefully show you how to build a plan using "unbundled" services That means, the record keeper is separate from the custodian, and the advisor is separate from them both.
There are much better options, even for smaller plans, than there were a few years ago. The new 408(b)(2) regulations should make the selection process clearer. You should spend a lot of time getting familiar with all of the fees and what you get for them.
Be sure that you understand the service provider’s role, asking them to sign on as a fiduciary and to avoid any transactions that would be potential conflicts of interest. Depending on the assets in the plan, you may find that you can have a plan with significant number of choices, using a combination of index ETF's and/or best-in-class active managers.
An investment advisor should take on fiduciary responsibility and build a platform with a number of decent investment choices at a reasonable cost would be the minimum expectation.
Manuel some very good advice above but again the focus is off the mark INVESTMENTS granted they are an important part of a Retirement plan but they are merely a part and in my humble opinion the easiest to address. ERISA compliance is the bigger issue a 3 (38) is a great idea but your focus should be a Full Scope 3(21) 402a Named Fiduciary and a 3(16) to run the plan for you outsource it. It will remove the labor, the vast majority of the liability , which should lead to reduced cost which will enhance the plan for participants , but most of all when done properly insure a documented prudent process.
Manuel - There are significant changes coming to the 401k landscape, due to new regulations governing service providers. The changes are generally positive for plan sponsors and participants, but they are shaking up existing relationships and business structures.
Full disclosure: I work with new and established businesses to create bundled 401k programs, using independent service providers for the key components.
My advice to businesses is that they continually monitor the market for superior programs, and that they conduct a formal review at least once every three years. The review does not always lead to an RFP, but it might. While there is considerable administrative overhead in changing 401k service providers (so-called high switching costs), there can be substantial benefits for both the plan sponsor and plan participants, in terms of investment options, cost savings, and tax benefits.
Good luck with your review, and feel free to reach out if you have more specific questions.
Hi Manuel, good advice above about looking for a fee-only advisor to help guide you through the conversion process. The latest on The Hartford is that they are still looking for a buyer for this business. Their reason for selling is that the variable annuity and 401k record-keeping businesses have become much less profitable for insurance companies in recent years for a variety of reasons including those cited above. The business will be bought by another insurance company and will almost certainly be far less than best-in class for your business. You can choose to wait or start looking now, but I would not be surprised if either way you don't find yourself finding a better plan soon.
Hartford Life is exiting the retirement business, but is actively looking for a buyer for this segment of the business. This is a great time to look into a new business partner. With all the ERISA law changes, you should be looking for someone with not only low fees, but a significant fund selection. Remember all employees' statements will reflect the fee costs, and you should prepare yourself by replacing Hartford with a efficient and flexiable 401(k). Regards
You do not want to just sit tight with a provider that is on the auctioning block. Your service suffers for a variety of reasons: 1. service people afraid for their job. 2. turnover due to service people leaving. 3. lack of product viability due to no new sales. 4. lack of support from parent company etc...
On-top-of-that, you really should look for a non-annuity based recordkeeping and custodial platform. Annuity providers (Hartford is one of many) limit your investment choices, layer fees inside of their subaccounts, present disclosure problems, have proprietary fund preferences, etc...
I suggest you do what the Department of Labor suggests to comply with the new regulations. Perform a Request for Proposal in the marketplace. You will get great quotes and be presented fabulous options. Of course you should also employ and Advisor that takes full fiduciary responsibilty by accepting 3(38) Erisa Fiduciary status. That is another topic.