Data and Research June 9, 2016

DC Retirement Plan Sponsors Paring Down Investment Options

For the first time, the desire to reduce fees and expenses outranks underperformance as the most common reason for dropping an investment manager from the plan lineup, according to Cogent Reports.
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Findings from the latest Retirement Planscape, an annual Cogent Reports study by Market Strategies International, indicate 401(k) plan sponsors are consolidating the number of defined contribution (DC) investment manager relationships as well as the number of plan investment options in an effort to reduce plan costs.

For the first time, the desire to reduce fees and expenses outranks underperformance as the most common reason for dropping an investment manager from the plan lineup.

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“It appears that fee disclosure regulations are driving a substantial amount of activity,” says Linda York, senior vice president of the financial services division at Market Strategies. “During this period of lower returns and lower yield, the impact of fees is magnified—another factor driving the focus on fees. This year, we find significantly more plan sponsors intending to take action in the form of negotiating for lower fees or lower-fee share classes, eliminating revenue-sharing arrangements, or consolidating the plan investment menu.”

The report notes differences in intended actions by plan size, with smaller plans more likely to request lower fees and larger plans looking for lower-cost, more personalized investment options. Despite reductions in investment options and relationships, the report finds an increase in the types of investment products offered in 401(k) plans. Mutual funds remain the most common investment vehicle offered, yet in search of performance and a more favorable fee structure, interest is rising in products such as managed accounts, exchange-traded funds (ETFs) and collective investment trusts (CITs).

The full report also examines trends in investment menu design as well as perceptions of 48 leading DC investment managers.

“All plan sponsors agree on the importance of strong, consistent investment performance, which not only boosts consideration potential if investment managers are highly associated with this attribute, but also detracts from consideration if a firm is perceived to have lagging returns,” says Julia Johnston-Ketterer, senior director at Market Strategies and coauthor of the report. “That said, competitive fees and fee structure become even more important as you go up market to large and mega plans.”

Information about how to request the report is here.

Products June 9, 2016

Jiff Offers Three New Health Benefits Solutions

The tools are aimed at lowering health benefit costs for employers and improving the quality of benefits for employees.
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Jiff, a health benefits platform, has created three new solutions: Jiff Enterprise Navigator, Jiff Total Wellbeing and Jiff Launch Pad.

Jiff Enterprise Navigator, presented as a mobile interface, responds to the preferences of each individual and learns about the individual as their health and benefit needs evolve. It centralizes all of a company’s benefits into a single hub and is Jiff’s most comprehensive solution, offering the platform’s full range of features and programs.

Jiff Total Wellbeing presents employees with a comprehensive suite of tools to improve their physical, mental and financial health. It allows employers to run high-impact incentive programs, where employees can earn points toward rewards such as premium reductions, streaming music subscriptions, sweepstakes for vacations and more.

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Jiff Launch Pad is designed to be a fun, engaging health program that can integrate wearable devices, such as Fitbit, Garmin or Jawbone, to guide participants to set daily goals and  to receive rewards for achieving those goals.

“Employers are facing a seemingly unwinnable struggle against rising health care costs, and they need a way to get  more value from the health benefits they offer,” says Derek Newell, CEO of Jiff. “But they also want to cultivate a happier, healthier, more productive workforce. Jiff solves this problem [by helping] emplloyers bring clarity to their benefits strategy through data, employee engagement and best-in-class tools that lower the cost and increase the quality of employee benefits.”

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