James Vanke, Managing Director – Pensionmark
Plan sponsors shoulder a critical fiduciary responsibility as prudent experts in managing retirement plans. This role necessitates informed decision-making and careful oversight to ensure the plan’s optimal performance and the well-being of its participants. Prudent experts are expected to possess deep financial knowledge, regulatory understanding, and diligence in evaluating investment options and overseeing plan operations.
As prudent experts, plan sponsors must conduct thorough due diligence, assess investment strategies, and stay abreast of regulatory changes to fulfill their fiduciary obligations effectively. Their proactive decision-making and diligent monitoring demonstrate a commitment to the best interests of plan beneficiaries and the responsible management of retirement savings. By prioritizing informed choices and continuous vigilance, plan sponsors safeguard participants’ financial futures and uphold ethical standards in retirement plan management.
In a recent dialogue at the TPSU program hosted by The University of Southern California, Fred Barstein, CEO and founder of TRAU, TPSU, and 401 KTV, interviewed James Vanke, Managing Director at Pensionmark, during a TPSU program in Alpharetta. Vanke shed light on the challenge plan sponsors face in acting as prudent experts in managing retirement plans amid competing responsibilities. He emphasized the importance of outsourcing certain aspects of plan management to qualified advisors, enabling sponsors to focus on strategic initiatives that benefit employees.
Read the Full Transcript Here:
Fred Barstein:
Greetings. This is Fred Barstein, founder and CEO at TPSU and 401kTV and TRAU, here at a program in Alpharetta, TPSU program in Alpharetta with one of our adjunct lecturers, James Vanke.
James Vanke:
Yes.
Fred Barstein:
Welcome, James.
James Vanke:
Thank you.
Fred Barstein:
Okay if we ask you a few questions?
James Vanke:
Absolutely.
Fred Barstein:
Before we do, tell us a little bit about yourself and your practice.
James Vanke:
Sure. My name is James Vanke. I’m a managing director with Pensionmark based here in Atlanta, serving clients in the southeast. I personally tend to work with smaller or mid-market companies. Our practice works with everything from startups to pretty large plants.
Fred Barstein:
Very good. You’re here with a team here. So, one of the things that we tell plan sponsors is one of their fiduciary responsibilities is to act as a prudent expert. That’s really hard to do because most people, they have 10 jobs and they don’t have a training. So, how can a plan sponsor become a prudent expert in running their retirement plan?
James Vanke:
Prudent expert is a scary phrase, that’s loaded with a lot of obligations and in the corporate world, everyone’s stretched thinner and thinner, being asked to do more with less, wear a dozen different hats, like you said, all that. My best advice for clients is to get out of the business of 401(k)s, to get out of the business of retirement plans and just really work with their people.
So, that very frequently means outsourcing and you can outsource the investments and the fiduciary, and whether that’s a 321 co-fiduciary type of role, if you are comfortable continuing in that, or whether it’s a complete 338, handing it over discretionary management, I think those are great ways to go because you can really shift the focus of the company.
The next step would be operational outsourcing with a 316, and that gets you out of a lot of the day-to-day administration, the nitty-gritty, I refer to investments as low probability, high consequence situation, if you have mistakes and the administration is more higher probability, lower consequence, but it can be a nightmare. It can get you bogged down administratively and just really be a time suck.
So, if you can outsource that function as well, you can get out of the business, out of the trenches of 401(k) and be more strategic about it. And how can this be a benefit to our employees? How can we communicate this benefit to our employees? How can we get our employees to take the most out of it? How does this fit into our recruiting and retention? All of those things. It allows you to pull back and take a more strategic view. And as you’re investing time in those committee meetings, it can be on issues like that rather than, hey, how is my mid-cap value doing compared to the benchmark?
Fred Barstein:
Or did all the final forms get filed and notice it?
James Vanke:
Right.
Fred Barstein:
So, if a plan sponsor is interested in doing that, what’s their first step should be?
James Vanke:
Their first step should be to talk to a qualified advisor, honestly. And then hopefully their advisor, if they’re an expert in the space, they’re going to have the relationships and the wherewithal to know how to do the 338, or where to go for a 338. Who are the best TPAs or 316 administrators? Should that all be bundled up with the record-keeper or should it be broken out separately? All of those things are questions that you need to explore, and that comes back to your opening question, prudent expert, and is really hard for plan sponsor to know all those things. If they can bring in an advisor to get them up to speed, we find that super helpful.
Fred Barstein:
And they’re overseeing, they’re acting as the quarterback and overseeing everyone.
James Vanke:
Exactly.
Fred Barstein:
So that’s one, as they say, one throat to choke.
James Vanke:
Exactly.
Fred Barstein:
To do that. Well, great. Well, thanks for your time. Final question. You’ve done a couple of TPSUs. Why should a plan sponsor attend a TPSU? What are the main value they get out of it?
James Vanke:
Sure. I think what sets TPSU apart from other educational opportunities for plan sponsors is the peer-to-peer piece of things because you can … there’s no shortage of webinars and white papers or even live events where you can go and you’ll see somebody standing at a podium and going through their slide deck, and it is what it is, and it is the information.
The TPSU has much more of a peer-to-peer engagement. And whether it’s a panel or whether it’s a breakout session, you can hear the issues and challenges that other people are going through. You can hear what’s worked for them, what hasn’t worked for them, and everyone learns from each other.
Fred Barstein:
Great. Well, thanks for being a lecturer with us.
James Vanke:
Absolutely.
Fred Barstein:
And thank you for watching 401kTV. Please stay tuned.
