ePlan Services To Track Concessions

Defined Contribution & Savings Plan Alert -- November 10, 2006 -- ePlan Services, a provider of technology platforms used by recordkeepers, will soon have the ability to track concessions such as finder's fees, 12b-1s, and sub-TA fees, and put the money back into the investment that generated them. Mark Gutrich, president of ePlan, said that recordkeepers traditionally credit the concessions back to the plan across the entire participant base or weighted based on account balances. He said ePlan received a lot requests from recordkeepers and plan sponsors for such a service.

Gutrich said the concessions can track participants' holdings, including deposit holding periods. "For example, let's say there are two participants in a plan, whereby one holds all Vanguard Group funds that do not generate any concessions and the other holds all load-waived "A" shares that generate every type of concession," he said. "The standard method in this scenario is that the participant who did not hold any concession paying funds would receive a portion of the concessions that were generated by the other participant. Our method is different because only the participant who holds an investment that generates a concession will receive the concession credit."

Gutrich said this service is already available to larger plan sponsors from many of the larger financial advisors such as Wachovia Retirement Services. He said ePlan wants to sell this service to smaller players, but he also said he wants to target some of the larger firms.