PLANSPONSOR Article: Fiduciary Management Model

September 18, 2017

How one plan sponsor addresses its overall investment objectives by hiring a discretionary investment manager

A PlanSponsor article interviews Steve Fagerquist, VP of Human Resources at Teradyne, about the company’s 401(k) plan investment management and how they made a change to deliver a better product to participants. Steve explains the prior investment management approach, an internal fiduciary committee, and the challenges brought on by that structure. Here’s what lead to a change:

40 Lawsuits filed related to 401(k) plan fees alone. *

*Goom Law Group, "401(k) Fee Litigation" 10/6/15
  1. Increased 401(k) complexity, litigation and fiduciary regulation
  2. Awareness of the trend and rise of the outsourced model
  3. Internal resources tasked with managing a complex fund lineup while doing their fulltime jobs

Teradyne hired SEI to act as a 3(38) discretionary manager (OCIO) overseeing investments and 3(21) advisor for setting the fund menu. 

Knowledge Center Video: What to Know Before Making Any Change to Your DC Plan Time to review your DC plan so participants are better prepared for retirement? Know the answers to the 5 Ws first.

Together, we built a custom investment menu for the company’s demographics. 

The article also describes our multi-manager investment program and how it uses institutional money managers to bring more diversification and help reduce risk -- all while allowing the plan sponsor more time to address the overall investment objectives. 

Read the article: Fiduciary Management Model (PDF)

Legal Note

Information provided by SEI Investments Management Corporation (SIMC), a registered investment adviser and wholly owned subsidiary of SEI Investments Company.

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