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Hi to All, John Hancock sends out an email every day with a list of alerts regarding plans we as the TPA have in common with them. They seem to think that it is "Urgent" when a plan has contributions that come in for participants who are not enrolled in the contract or have missing investment instructions. This is not the norm for most of the participants in most of our plans - if someone is employed and deliberately signs up to make deferrals, they usually choose investments too. However, sometimes a Safe Harbor 3% non-elective contribution or a profit sharing contribution gets deposited for participants who didn't choose to defer, are indeed not enrolled in the contract, and do not have any investment directions on file. How important is this? Is it a violation of something or another to have participants on default enrollment? What is John Hancock looking to us to do about it? Your observations and advice are appreciated, as always.
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So I work for an RIA - we are the investment advisor on retirement plans. We have created risk-based models for our clients to invest in (Conservative, Moderate, Aggressive, Etc.) Every time we present to employees on education or do trustee meetings, we present a sheet showing those models performance the last 1,3,5,10 years. We have begun changing how those models are constructed, for example like 10% of our models is in US Small Cap Funds, we are moving from a Fidelity Fund to a Vanguard Fund. For the investment performance presentations we give EE/Trustee, it would be easiest for me to just show the 1,3,5,10 year performance of the updated model allocation, disregarding the old models. My boss claims that according to ERISA - we need to show how the plan models actually performed, so I need to track when each plan switches their funds within the model, and calculate the actual performance. (Much like how GIPS would require past performance to be presented). I'm new to retirement plans - this sounds crazy to me - does ERISA require actual historical performance of models to be shown, or can I show the returns of our models once their plan switches?