Retirement Plan FOCUS Bulletin - Second Quarter
What's new at Fulton Financial Advisors?
Payroll Integration with Paylocity
Last quarter we announced that we have recently established 360 degree integration with JetPay – a national payroll provider headquartered within FFA’s 5-state footprint. This quarter, we are happy to announce that we are now also able to provide this service to clients of Paylocity (another national payroll provider headquartered in Chicago).
This integration allows Fulton and Paylocity to exchange critical data regarding your plan and essential payroll data. This integration eliminates the need for the plan sponsor to act as an intermediary between us (your 401k provider) and Paylocity (your payroll provider).
In a completely automated fashion, Paylocity remits payroll files directly to Fulton which we will use to update participant accounts, transfer funds and update participant data on your behalf. In addition, Fulton will also remit to Paylocity any payroll changes that are essential and relevant to them as a payroll provider. This includes: Changes to contribution rates, new enrollments and providing information regarding new loans (such as payment amount and number of payments).
We continue to hear positive feedback regarding both of these payroll providers. If you are currently a client of either firm, please contact your Relationship Manager to discuss these features further. If you are considering making a change to your payroll provider – we encourage you to reach out to them (tell them Fulton sent you!) or reach out to us and we will be happy to make an introduction.
Maintaining a Better Plan
Engaging Your Participants
Did you know that the fast growing segment of the workforce over the next ten years will be in the 65 to 74 year old age range? At an age where folks are traditionally retiring, the projections indicate that many people will not be leaving the workforce – creating a workforce trend that this country has never experienced before. For some, it’s simply due to the fact that they enjoy working. However, I personally believe that for many, they simply won’t be in a financial position to retire. Most folks also believe that this significant demographic change will result in employers facing numerous new challenges as a result of this trend.
The need for participant engagement has never been higher and we urge you to take advantage of the various ways that we would like to engage with your participants. To that end, we have hired a professional that is purely dedicated to engaging with your participants. She and your Relationship Manager are prepared to work with your participants in a variety of ways:
- Traditional group education meetings
- One on one discussions – including utilizing our brokerage team to work with your participants on matters outside of your retirement plans
- Online video based education tools and retirement readiness calculators
- Upcoming webinars focused on specific topics of interest to participants
- Introducing our Workplace Banking team to you who can work with your participants to provide numerous educational topics and offers regarding financial matters outside of your retirement plan (topics such as budgeting, obtaining a mortgage, mortgage discounts, etc.)
- Payroll Stuffers
- Automatic Enrollment programs
In addition, we are happy to chat with you about any other ideas or needs you have to better prepare your employees for retirement. We urge you to take advantage of these services and look forward to helping to change the lives of your employees for the better.
Industry & Legislative Changes
ESG: Environment, Social, and Governance Investing
Once referred to as Socially Responsible Investing, this style and focus of investing has once again gained traction and interest– leaving those saddled with fiduciary responsibility in an uncomfortable quandary. As fiduciaries, we (most likely this includes you) are collectively responsible for (and liable for) ensuring that plan participants have access to appropriate, well managed and well performing funds that balance risk with performance and compare favorably to their peers. Although returns are not the only consideration when making such choices, – it is inherently a key data point.The quandary manifests when a sponsor has a strong personal desire to utilize ESG funds but perhaps the returns of such funds have historically not met fiduciary standards.
This fiduciary concern resulted in deep study and discussion sponsored by Federated Investments and led by Gene Maloney (a renowned expert on the topic of corporate fiduciary concerns). To sum up their thoughts and observations – a fiduciary must consider the ultimate effect of investing in an ESG fund with only the ultimate beneficiaries (the plan participants) in mind. This means that a fiduciary must be careful to not let their personal beliefs get in the way of a sound fiduciary process. That until an ESG fund can reflect improved risk adjusted returns – ESG funds may not be a suitable choice for plan sponsors and advisors. The review goes on to say that it is possible for ESG funds to inherently take on a lower amount of risk and therefore, perhaps a lower return can be tolerated – but this can only be done in a documented analysis showing a reasonable basis for this belief.
My personal thought is that the public is becoming increasingly more aware of social issues and the way that companies approach social responsibility. If this awareness ultimately leads to consumers favoring the goods and services of those firms described as ESG minded – we can readily find ourselves in a time where ESG investing can by synonymous with sound fiduciary choices. Said another way, if ESG investing morphed into ESG spending - ESG corporate practices are likely to become more prevalent. As they become more prevalent, any performance disadvantage is likely to disappear and the dilemma facing fiduciaries will also disappear.
For now, that is perhaps the best area where socially responsible consumers can more effectively invoke change.
Streamlining investment decision making
This article chronicles the thought processes behind participants and their need for direction. It goes into a deeper dive regarding the re-enrollment process and provides some surprising statistics on how participants react to such an endeavor. Click here to explore the article and learn more.