TRO enables companies to outsource the administrative services associated with retirement plans to a single provider.
U.S. pension environment is changing dramatically
The Pension Protection Act of 2006 increased the fiduciary responsibilities of pension fund sponsors. Changes in accounting rules mean that pension funds add a new element of volatility to company balance sheets, directly affecting a sponsoring company’s profit and loss. Following the financial crisis, the funding ratio of pension funds in the U.S. fell dramatically.
As a result, companies are increasingly looking for pension cost-savings and professional risk management. Total Retirement Outsourcing (TRO) can provide an effective solution. By transferring the operational responsibilities for your pension plan to a third party, you can effectively control your pension risks and reduce costs.
What is Total Retirement Outsourcing?
TRO enables companies to outsource the administrative services associated with retirement plans to a single provider. Administrative services include record keeping, retiree benefit calculations, participant and sponsor reporting, participant and sponsor websites, actuarial valuations, compliance and testing services, and the completion of government forms. TRO assists you to uphold your fiduciary duties as a sponsor, and to retain full control over the strategic direction of your pension fund.
Who is it for?
TRO has now been implemented by nearly 25% of U.S. firms with more than 1,000 employees and more than 50% are now actively considering doing the same. Research shows that companies with defined benefit plan assets of less than $100 million are most likely to be considering TRO today.
What are the benefits?
Ninety percent of companies that employ TRO are either satisfied or very satisfied, citing such benefits as reduced plan costs, convenience for employees, and ease of data management. TRO reduces compliance risk and administrative complexity, improves the audit process, gives access to professional risk management tools and advice, reduces or eliminates vendor management, provides online services to participants and provides one complete retirement picture.
More information
Please read more in the attached document or contact us.
