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March 14, 2019

Western Growers Retirement Security Plan


Western Growers Retirement Security Plan

The diversification, cost efficiencies and robust technology offered by the Western Growers Retirement Security Plan (RSP) gives it a competitive edge in the 401(k) industry. Based on the following three key metrics, Western Growers members may want to compare and contrast their current 401(k) plan with what can be offered by the Western Growers RSP.

Investment Choices

There are 19 investment options in the Western Growers RSP ranging from conservative money market and guaranteed investment contracts to individual sector selections such as energy, emerging market and technology funds. While some large 401(k) plans offer employers up to 80 different mutual fund choices, this many options may overwhelm participants and confuse them on how to allocate their retirement funds.

Most traditional 401(k) funds only offer mutual funds. Not only does the Western Growers RSP offer traditional mutual fund options (currently nine diversified sector funds), we also have six exchange traded index funds (ETFs) that offer passive investment options with very low expense ratios.

In addition to mutual funds and ETFs, the Western Growers RSP also provides employers and their participants four separate account manager options. While not new to the 401(k) industry, separate account managers have historically only been available to employers with plan assets greater than $50 million. Since the Western Growers RSP currently represents 29 employers with over $80 million in assets, we are capable of adding institutional separate account options. Our investment firms have decades of experience and focused sector disciplines like large capital growth and dividend growth strategies, which are also low in cost.

Since we are familiar with the agriculture industry, we are aware that employers have a diversified range of employees, from ownership to office to field staff. Not all employees are alike or have equal investment knowledge or experience, which is why we offer an investment default option that is a “fund of funds.” By selecting this option, it not only takes the guesswork out on how to allocate their 401(k) dollars for participants, but also offers a level of protection for employers. Under Internal Revenue Code Section 404(c), employers must provide a “Qualified Default Investment Alternative” on their 401(k) plans, which gives employees one option they can select that is diversified in investments but also low in fees. We have this as an option on our Western Growers RSP.


Cost Efficiencies

Because of its size and scale—the Western Growers RSP has a large asset base with multiple employers and nearly a thousand participants—we keep the fees paid by both employers and participants low. Typical 401(k) plans for employers with fewer than 100 employees could end up costing 1.5% or more on retirement assets of $5 million or less. For those employers looking to “start-up” a 401(k) plan for the first time, the fees could range much higher after audit, insurance and administration.

Since the Western Growers RSP qualifies as a group trust, employers can come into our plan and adopt the same available investment options and fee structure without the large costs associated with implementing a 401(k) plan. The current dollar-weighted investment expense ratio, administration, operating fees and custodial fees are less than 0.90%. While these fees represent all of the expenses incurred for the plan, depending on how they choose to allocate their investment selections, participants who take a passive indexed approach could actually see their expenses much lower than 0.90%.


Technology and Administration

Our Third Party Administrator (TPA) for the Western Growers RSP is OneAmerica, one of the largest retirement plan TPAs in the county. OneAmerica operates a robust, technologically-advanced website platform with numerous features for employers and their participants, such as future rate of return and personal rate of return calculators. Additionally, OneAmerica provides our employers with individual relationship managers who are responsible for handling your 401(k) plan queries and questions. Western Growers, along with OneAmerica, also provides bilingual enrollment meetings and a 1-800 number for those employees who may not have individual access to the internet during normal business hours. All customer service representatives are bilingual.

For more information about the Western Growers Retirement Security Plan, or to compare your current 401(k) plan with our offerings, please contact Matt Lewis, President of Western Growers Financial Services, at [email protected] or (949) 885-2379.