Investments

Small businesses invest plan assets in a variety of funding vehicles. The trustee of the plan (normally the business owner) is responsible for the investment of plan assets "prudently" and "for the exclusive benefit" of plan participants. This is referred to as trustee directed and means the trustee can be held responsible for the performance of investments.

Another option of investing is referred to as participant directed election. This format allows the participant to direct the investment of their accounts. The trustee (or employer) will determine the funds the employees can choose from and is responsible for educating the employees on the investment options.

Generally, the investment powers (and limitations) for the trustee are contained in the trust document. Investments might include mutual funds, certificates of deposit, real estate, stocks, bonds, annuities, or life insurance contracts.

Businesses may also consider investing a portion of the funds in life insurance because it provides several advantages in a qualified plan. Insurance provides an immediate, sizable death benefit for participants not living to retirement with a significant portion of the death benefit being income tax free. The dependable return on life insurance cash values provides balance to other, more aggressive plan investments and premiums are paid out of the plan directly, which is generally considered a cost-effective approach to purchasing insurance.

Employee Incentive Plans, Inc (EIP) can provide you with various investment options for your plan. EIP will help you to determine the right choice of investments as well as create an investment philosophy for the plan.

The Enhancer Platform

The Enhancer is EIP’s own open-architecture trading and custodial platform through Fidelity Investments.  Employers are now able to offer participants investment alternatives from a vastly larger mutual fund universe compared to other trading programs.  The Enhancer will also bring a more robust website for participant research as well as trading and investment direction.  On a fiduciary level, trustees will be provided detailed plan investment performance and allocation summaries to monitor fund selection and to allow for prudent investment alternatives.

American Funds

American Funds continues to be one of the premier mutual fund families.  For individuals who wish to personally invest funds from outside their retirement plans, we offer a comprehensive investment solution.  EIP offers investment plans including Individual Retirement Accounts, 529 Plan college savings accounts, as well as personal investment accounts for individuals, families, and corporations.

CLS Investment Firm

For individual participants who feel unprepared or uncomfortable managing their own investments as part of their retirement plan, CLS provides a streamlined process for managing their account on behalf of the participant.  CLS makes fund selection recommendations and trade execution so participants can rest easy knowing a professional money management firm is watching over their account.  CLS’s investment methodology fits right in line with a long-term investor’s philosophy.

Nationwide

Nationwide is one of the largest 401(k) custodial and trading platforms in the nation.  Their program allows participants easy access to fund research and availability, while also making the process of trade execution much more user friendly.