Financial

Plan sponsors

Plan sponsors

The entities that establish pension plans, including private business entities acting for their employees; state and local entities operating on behalf of their employees; unions acting on behalf of their members; and individuals representing themselves.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Plan Sponsor

An employer or company that offers a pension plan to employees. Plan sponsors may directly manage the pensions, but most allow third-party money managers to handle them. However, plan sponsors must determine which employees are eligible for the plan, and most contribute matching funds to each employee's pension, up to a certain point. A wide variety of pension plan types exist, and plan sponsors determine and may change the terms of what they offer. See also: 401(k), IRA.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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References in periodicals archive
While the Department of Labor (DOL) does not necessarily mandate plan sponsors to regularly run a request for proposals (RFP) to monitor their vendors, the regulatory agency does assume that "… plans normally conduct RFPs from service providers at least once every three to five years …" in anticipation of changes to provider fee structures and service disclosures.
“Defined contribution [DC] retirement plan sponsors can strengthen their plan governance and improve their plan’s return on investment [ROI] by using detailed analytics that evaluate specific segments of their employee population, based on age, job category, tenure and benefit structure,” says a recent Willis Towers Watson “Insights.”
The program asks plan sponsors to consider important plan criteria including objectives, risk tolerance, demographics and expected participant behavior.
Plan sponsors with fiduciary oversight of their organization's 401(k) plan need to understand the way in which investment management firms apply revenue sharing generated on 401(k) plan asset investments.
According to the firm, the site helps plan sponsors and plan consultants manage and optimize plans, drive outcomes and engage employees.
401(k) plan sponsors are responsible for offering an array of appropriate investment options, and participants are responsible for directing their investments among those options.
This has triggered a healthy competition among plan sponsors desiring to enroll Medicare participants in their prescription drug plans.
Many plan sponsors "appear to be shoring up their plans with an eye toward eventually winding them down," the firm says.
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