KISC Revitalizes Retirement Plans

Successful Qualified Retirement Plans, like a 401(k) plan, depend upon the employee making consistent contributions over a long period of time. They then take advantage of compounding interest – which can be significant. It’s obvious that Plan Sponsors, because of the discussions of their Fiduciary considerations are reviewing Plan expenses. But, the opportunity reveals a lot more that Plan Sponsors should consider.  

KISC Opportunity

1. Plan Expense Considerations  

According to The Motley Fool, “the variety of fees tends to mask their cumulative impact. There are plan administration fees, investment fees, and individual service fees, among others. Secondly, 401(k) administrators often couch their explanation of fees in long-winded and esoteric language; plan disclosures routinely exceed dozens of pages.”[1]

KISC, LLC can help determine the fees associated with your current plan and help you assess their appropriateness. 

2. 2017 Investment Management Outlook

  • Investment industry outlook: Building upon last year’s performance
  • Shifts in investor buying behavior: Here come the Millennials
  • Regulatory developments: Seeking greater transparency, incentive alignment, and risk control
  • Key technologies: Transforming the enterprise
  • Change, development, and opportunity[2]
  • Financial Industry Turmoil. “Regulators are focused on prevention and punishment across financial services. The Department of Labor’s new fiduciary rule, for example, is designed to encourage ethical behavior by requiring asset managers and insurers to act in the best interest of each client.” [3]


3. Qualified Retirement Plans Continue to Evolve.

“The long-term shift from traditional pensions to defined contribution and hybrid defined benefit plans places significant responsibility and challenges on retirees to successfully generate lifetime retirement income.”

At KISC, we recognize the plans are evolving. Our program is an evolution to the Plan Sponsor’s current plan, moving it in a direction that will help participants become self-reliant in retirement.

4. Fund Options Are Not All Marketed Equally

“Many mutual funds warrant criticism for their high fees and uneven performance. That being said, many worthwhile funds with great performance records charge very reasonable fees. In fact, 30% of mutual funds don’t charge 12b-1 fees, since their managers find them unnecessary or would rather protect the financial interests of their existing investors. To find the best funds and balance the risks against the rewards of funds that charge 12b-1 fees, investors should read the mutual fund’s prospectus and SAI, and then make an educated decision over whether the fund is likely to earn a sufficient return for the fee it will charge.”[5]

  1. Fund Options Are Not Managed Equally – Growth Fund Comparison

“American Funds’ Growth Fund of America (AGTHX) is a large-cap equity fund that focuses on capital growth. Portfolio managers practice active stock selection. The fund has an expense ratio of 0.65% and a turnover rate of 29%. Its annualized total return is 10.9% over three years, 9.94% over five years and 5.82% over 10 years.

The Vanguard Growth Index Fund (VIGRX) also seeks capital growth through investments in large-cap equities. The fund tracks the CRSP U.S. Large Cap Growth Index, which includes stocks that make up about 85% of the U.S. stock market’s total capitalization. The fund has an expense ratio of 0.23% and a turnover rate of 9%. It has provided investors with an annualized total return of 11.72% over three years, 11.18% over five years and 7.37% over 10 years.

The increased return for the Vanguard Growth Index Fund exceeds the 0.42% difference in expense ratios. Investors who paid a front-end sales charge to purchase shares of the Growth Fund of America would have been at an even greater disadvantage. The comparison is similar in other asset class funds.” [6]

KISC’s structure offers participant and Plan Sponsor Value without taking all that is available in the current market. KISC sees that many plans may not be served in the spirit of the necessary Fiduciary Duty. We intend to educate Plan Sponsors and help them make better decisions, especially as the decisions relate to Fiduciary Duties.

Keep It Simple Consulting (KISC) is the company. KISC enables Plan Sponsors to Revitalize their Retirement Plan to enable their employees to become self-reliant in retirement.


[1] https://www.fool.com/retirement/401k/2015/04/06/average-401k-fees.aspx

[2] https://www2.deloitte.com/us/en/pages/financial-services/articles/investment-management-industry-outlook.html

[3] https://www.pwc.com/us/en/financial-services/research-institute/assets/pwc-top-financial-services-issues-2017.pdf page 17

[4] https://www.soa.org/Files/Research/Projects/research-2013-next-evol-dc-design.pdf

[5] http://www.investopedia.com/articles/mutualfund/13/12b1-understanding-mutual-fund-fees.asp

[6] http://www.investopedia.com/articles/investing/030516/american-funds-vs-vanguard-group.asp