Over the past year ADMIN Partners has used our blog series, ADMIN Education, to share retirement planning knowledge that helps Plan Sponsors, Participants, and Financial Advisors with their retirement plan administration. The series has showcased an array of topics including contribution options like Roth Deferrals as well as insights on complex plan designs for organizations such as churches and religious organizations. The good news is there is still a lot of information to share and our team is kicking off 2021 with a new post.

When it comes to retirement plans, there are several components for employers to consider. One of which, is whether to use a bundled or unbundled provider. While there are no absolutes when it comes to which option is best, there are some things employers should know about the setup for each choice. In this two-part post, ADMIN’s team will share the specifics surrounding both an unbundled and bundled arrangement. We will also share why an unbundled solution may benefit employers and their staff.

In a bundled arrangement, the investment provider(s) supplies all retirement plan services including (financial and plan level) recordkeeping, plan administration and plan education. The idea behind the bundled solution is to allow plan sponsors to obtain all their retirement plan needs from one single source. Not all investment companies offer a bundled solution; however, there are some larger institutions that will utilize a bundled arrangement for their retirement plan clients. To do this, providers need to establish an in-house TPA that can manage the plan’s administration alongside their financial representatives who maintain the financial investments. In Part II, we will take a deeper look at the in-house setup for bundled arrangements as well as the costs that come with this single source solution.

Unlike a bundled arrangement, an unbundle solution allows a Plan Sponsors the option of choice. Sponsors can still determine the best investment provider(s) for their retirement plan, but they can also choose the best organization to help support them with their plan administration needs. The unbundled arrangement is more commonly seen in 403(b) retirement plans where there are often more than one vendor offering investments within the plan. The flexibility of an unbundled setup complements the complexity that can come with a multi-vendor arrangement (read more on that here).

While it may seem that the single source offered in a bundled solution is ideal, there are many factors to be considered when it comes to what is best for your retirement plan. In Part II, ADMIN will explore the structure behind each arrangement as well the costs associated. Stay tuned!

Want more from ADMIN? Subscribe to our blog and be the first to know when our weekly content goes live!