Being a plan fiduciary comes with the burden of making investment choices for your plan. This important task is critical to your plan’s success and your employees’ retirement readiness.
ADP Strategic Plan Services, LLC (SPS) takes on this role for you — providing carefully selected fund lineups and monitoring the performance of your plan’s funds in the best interest of the plan.
When it comes to investment selection and monitoring, SPS can help you meet your fiduciary responsibilities. We provide fiduciary investment management services under Section 3(38) of ERISA to help you manage the risk and challenges associated with investment monitoring and selection.
With SPS you get the investment oversight and experience your plan needs. We act as the investment manager for your plan and assume full investment discretion for selecting, monitoring, and if necessary, replacing investment options in your plan’s lineup.
SPS helps take the complexity out of plan investment selection and oversight by:
When it comes to selecting plan investment options, you have a fiduciary responsibility to follow the fiduciary standards outlined in the Employee Retirement Income Security Act (ERISA). This is a high standard that requires certain levels of expertise in areas like investment selection and monitoring.
Hiring SPS as your investment manager also reduces the risks associated with certain third-party, ERISA-related lawsuits pertaining to investment selection and monitoring.
More employers are using third
parties to assist with
1 in 3 retirement plans
have been audited by
the IRS or DOL.2
56% of plan sponsors indicate
fund/manager due diligence a
primary area of focus.3
ADP Strategic Plan Services, LLC is an affiliate of ADP, LLC (ADP) and a separate, indirect subsidiary of Automatic Data Processing, Inc. that provides fiduciary investment management services including the analysis, selection, monitoring, and if necessary, replacement of investment options on behalf of employer-sponsored retirement plans.
ADP is changing the way it delivers retirement planning services in light of the investment advice regulation issued by the United States Department of Labor (DOL) on April 6, 2016.
This regulation specifies that anyone providing recommendations or advice related to investments to retirement plans that are subject to the Employee Retirement Income Security Act (ERISA) is a fiduciary.
To continue to service our clients' plan investment needs, we created ADP Strategic Plan Services – an SEC-registered investment advisory firm - to provide investment management, advisory, and oversight.
This new offering will enhance the services ADP makes available to retirement plan recordkeeping clients.
Due to the Department of Labor’s Fiduciary Investment Advice Regulation, beginning June 9, 2017, ADP will no longer monitor investment funds on the ADP Investment Policy Statement (IPS) investment platform that you chose for your plan. ADP will continue to serve as your plan’s recordkeeper and administrative services provider but will no longer provide screening and monitoring for the investments in your plan going forward.
For clients electing investment management services provided by SPS, ADP’s4 investment platform is divided into “Tiers.”5 Tiers consist of investment funds that make payments to ADP or its affiliates other than SPS within a set range of compensation, in the form of 12b-1 fees, shareholder servicing fees, or similar fees. ADP takes this compensation into account in setting its fees for recordkeeping services. Your selection of a Tier thus is a decision about some or all of the compensation to be received by ADP in connection with its services to your plan. You then choose from among up to four standardized investment guidelines that SPS can use to manage your plan, each of which is designed for the needs of differing plan participant demographics. You choose the investment guideline that best fits your plan.6
The SPS team of investment professionals uses an unbiased, rigorous process to screen broad range of investment options.
Once the funds are carefully vetted, the team assembles a standardized investment lineup for each guideline within each Tier. Each investment guideline includes a diverse range of asset classes.
1. Evolving Risks, Structure and Strategies in Retirement Plan Governance, Willis Towers Watson. July 2016
2. Evolving Risks, Structure and Strategies in Retirement Plan Governance, Willis Towers Watson. July 2016
3. 2017 Defined Contribution Trends Survey, Callan Institute. December 2016
4. “ADP” refers to ADP, LLC and its affiliates other than ADP Strategic Plan Services, LLC.
5. Tiers consist of investment funds that make payments to ADP within a set range of compensation, in the form of 12b-1 fees, shareholder servicing fees, or similar fees. ADP takes this compensation into account in setting its fees for recordkeeping services. Your selection of a Tier thus is a decision about some or all of the compensation to be received by ADP in connection with its services to your plan.
6. Plan sponsors are responsible for reviewing investment tiers and guidelines and determining that the tier and guideline they select are reasonable and/or suitable, as applicable. ADP Strategic Plan Services, LLC and its affiliates do not provide any tax, legal or other advice in connection with selection of investment tiers and guidelines.