Archive for heritage institutional

Heritage Institutional — September Retirement Report

Each month, our Heritage Institutional team publishes the Retirement Report, which provides timely news and updates for plan sponsors and fiduciaries of defined contribution plans.  This month’s topics include:

Q & A – Department of Labor defined “fiduciary” and helps you understand the regulations and how they pertain to you, your plan and participants.

Participant Behaviors — OneAmerica® providing insights in order to improve financial wellness.

Organizing Your Fiduciary File — Prepare your file in four key sections to keep everything organized.

Allowable Plan Expenses: Can the Plan Pay? — The payment of expenses by an ERISA plan (401K) defined benefit plan, money purchases plan, etc.) out of plan assets is subject to ERISA”s fiduciary rule.

To read the full report, click here.


Heritage Institutional — July Retirement Report

Each month, our Heritage Institutional team publishes the Retirement Report, which provides timely news and updates for plan sponsors and fiduciaries of defined contribution plans.  This month’s topics include:

On Stress and Financial Wellness, A Personal Perspective — Brad Knowles gives us his first-hand account of how focusing on his health improved his stress and well-being.

ERISA Fidelity Bond versus Fiduciary Liability Insurance — Plan sponsors often ask, “Is an ERISA fidelity bond the same thing as fiduciary liability insurance?” The answer is no, they are not the same. The two insure different people and have different requirements under the terms of ERISA.

I’m Too Young to Save for Retirement! — Too often, we hear the younger generation of workers tell us saving for retirement is not high on their priority list. It’s easy to understand why retirement may not be a main priority. However, what the younger generation needs to understand is that this may be the most crucial time to begin saving for retirement.

To read the full report, click here.

June Retirement Report

Solutions for a Stressed-out Nation — Mature couple discussing financial matter with advisorHow stressed are we? In May of 2014 New York Life Retirement Plan Services sponsored a research study which shed light on individual stress levels, its causes, and how best to combat it.

Fiduciary Seminar Alert — Plan fiduciaries have a primary responsibilities to understand and prudently discharge their duties in accordance with ERISA and their plan document. This section provides content and extra fiduciary training for plan fiduciaries.

How to Encourage Positive Retirement Outcomes in Tax Exempt Plans — Tax exempt organizations seem to have a different attitude towards the implementation of these strategies. Find out what they are in this section.

When “Float” is a Bad Thing — Float refers to the earnings or “compensation” accruing to a service provider while a plan’s contribution remittance (or other assets held in suspense) is awaiting deposit or distribution. Find out how to keep compliant.

To read these and other featured stories, visit Heritage Institutional or click to view the latest Retirement Report.

New Fiduciary Rule Update

Brad KnowlesBy Brad Knowles, Heritage Institutional

On Wednesday April 6th, the Department of Labor (DOL) released the long-anticipated new Conflict of Interest (aka “Fiduciary Rule”) regulation. Though the regulations maintain much of the substance of the proposed language, the DOL received many comments and as a result made a fair number of modifications to the language.  Our team is currently reviewing the regulations and legal commentary, and we will provide you an analysis of any impact to you, your fiduciaries and your participants.

Since inception in 2008, we’ve served as co-fiduciary with each and every one of our clients; the new regulations will not in any way force us to change our service model. This will allow us to continue focusing on providing excellent service to our respected clients. For us, it’s business as usual.

If you would like more information in the interim, the DOL has provided FAQs on their website:

If you have any questions or concerns, please let me know.

Book of the Month: The Rationale Optimist

Each month Heritage recommends a read from one of our staff — a book we feel our readers and clients will enjoy. Our April recommendation comes from Matt McGuire, President, Heritage Institutional, who says this read showcases why the world is getting better and our role in it.

The Rationale Optimist: How Prosperity Evolves by Matt Ridley41MLwBkcIKL._SX330_BO1,204,203,200_

From the publisher:

Life is getting better—and at an accelerating rate. Food availability, income, and life span are up; disease, child mortality, and violence are down — all across the globe. Though the world is far from perfect, necessities and luxuries alike are getting cheaper; population growth is slowing; Africa is following Asia out of poverty; the Internet, the mobile phone, and container shipping are enriching people’s lives as never before. The pessimists who dominate public discourse insist that we will soon reach a turning point and things will start to get worse. But they have been saying this for two hundred years.

Yet Matt Ridley does more than describe how things are getting better. He explains why. Prosperity comes from everybody working for everybody else. The habit of exchange and specialization—which started more than 100,000 years ago—has created a collective brain that sets human living standards on a rising trend. The mutual dependence, trust, and sharing that result are causes for hope, not despair.


This bold book covers the entire sweep of human history, from the Stone Age to the Internet, from the stagnation of the Ming empire to the invention of the steam engine, from the population explosion to the likely consequences of climate change. It ends with a confident assertion that thanks to the ceaseless capacity of the human race for innovative change, and despite inevitable disasters along the way, the twenty-first century will see both human prosperity and natural biodiversity enhanced. Acute, refreshing, and revelatory, The Rational Optimist will change your way of thinking about the world for the better.Ridley writes with panache, wit, and humor and displays remarkable ingenuity in finding ways to present complicated materials for the lay reader.” — Los Angeles Times

In a bold and provocative interpretation of economic history, Matt Ridley, the New York Times-bestselling author of Genome and The Red Queen, makes the case for an economics of hope, arguing that the benefits of commerce, technology, innovation, and change—what Ridley calls cultural evolution—will inevitably increase human prosperity. Fans of the works of Jared Diamond (Guns, Germs, and Steel), Niall Ferguson (The Ascent of Money), and Thomas Friedman (The World Is Flat) will find much to ponder and enjoy in The Rational Optimist.

Learn more about the book here. 

Our Perspective – Courageous Retirement Plan Design

by Brad Knowles, Heritage Institutional

There are myriad reasons why an employer maintains a qualified retirement plan. They may use it asBrad Knowles a talent attraction and retention tool. They may see it as a necessity to keep pace with industry peers. But perhaps the most important reason is to provide a means through which their employees may save for the future. The plan should mean security and dream fulfillment for a loyal workforce.

Over the years traditional pension plans have faded and been replaced by defined contribution (primarily 401(k)) plans. But these defined contribution plans were never meant to carry the full load of retirement savings. They were meant to supplement the much more robust and well-designed (for impactful retirement savings) traditional pension plan. A pension plan places all of the decisions, and responsibility, in the hands of the employers, who tend to possess a greater degree of sophistication than do many employees. In contrast, most supplemental defined contribution plans shift those decisions to employees. Unfortunately, studies haveshown that many, if not most, of these employees are ill-equipped to make good decisions in planning for their futures.

So what’s the answer? Employers have to become more courageous. They have to start by answering the question, “what is the purpose of our plan?” If the answer is “to create the most efficient retirement savings tool possible for my employees,” they have to accept the fact that they need to take a step back in time. They need to make their 401(k) plans operate more like the traditional pension plans of old. They need to become more paternalistic. They need to go back to making good decisions on behalf of their employees. Some of these decisions may take the form of plan design. Some may take the form of diverting more corporate focus and attention to their plan. And some may require contemplating the best use of corporate dollars.
Courageous plan design includes redesigning plans to eliminate potential points of leakage like in-service withdrawals, hardship withdrawals and even loans. It includes taking advantage of behavioral finance to include automatic enrollment and automatic escalation features to ensure employees get into a plan then defer appropriately. It includes conducting prudent due diligence in regards to investments and fees. It includes the employer considering bearing the administrative costs of the plan instead of passing them onto their employees.

Some of these may seem like drastic changes, and some may seem miniscule in impact. The truth is every single incremental change may have a large impact on an employee’s ability to reach his/her retirement goals. At the end of the day, even the wisest employees don’t make the best decisions. However, it is within the employer’s power to help them avoid mistakes, if the employer has courage.

Behavioral Finance and Plan Design

401(k) plans have been around for more than 30 years now, and we have learned much about what has worked and what has not. As pension strategies have migrated from the traditional defined benefit (DB) plans to the ubiquitous defined contribution(DC) plans, two key events occurred. Plan sponsors removed themselves from the enormous funding implications and investment responsibilities inherent in DB plans and transferred these responsibilities to the participants. Unfortunately participants have not picked up these responsibilities.

As a plan sponsor, if you subscribe to the view that success of a 401(k) plan is really measured by your employees’ ability to replace their income at retirement, then this effectively becomes the definition of a successful plan. If we agree, then we have work to do. Currently, our industry spends nearly $1 billion annually on employee investment education and support, and we have yet to move the needle in terms of achieving viable retirement outcomes. We now know employee education alone is not the answer. Participants are making all the same retirement investment mistakes as they made 30 years ago.

The science of behavioral finance has been very helpful in illuminating why most participants do not engage with their plan. Studies have shown participants have no interest in learning how to fly the jet; they want the pilot to do this. The job of pilot then falls to the plan sponsor.

Issues of lethargy, intimidation, procrastination, loss aversion, hyperbolic discounting (retirement would be great, but I really want that new gadget now) are debilitating to participants, but can be overcome by the influence of a concerned plan sponsor. We have all the tools to help effect positive change.

A Great Time to be Courageous

Over the past several years, we have worked with our clients to move the needle when it comes to Courageous Plan Design. Each year, we calculate how many positive plan metrics our plan sponsor clients have been able to implement. In 2014, that number climbed to its highest yet. Now there is a big push to show how the behavioral finance behind Courageous Plan Design can help achieve those positive plan outcomes we all seek.

Brad Knowles is the Managing Director of Heritage Institutional and is one of fewer than fifty advisors nationally to earn the Certified Behavioral Finance Analyst (CBFA) designation.  You can read more about Brad here

What is HIS and is there a HERS?

by Garrett Johnson, Client Service Manager

Garrett JohnsonWith the new year comes new resolutions and that little mental hurdle of writing 2016 on everything instead of ’15. 2016, 2016, 2016. There. That should do the trick. Now, I thought I’d take a moment to explain just what HIS stands for. You may have seen it on a bathroom towel somewhere. That’s not us. That’s HIS and HERS. No, our HIS stands for Heritage Institutional Services. See, Heritage Trust has expanded over the years to include more specialized service areas. Our full spectrum includes Trust, Mineral Management, Investments, Financial Planning, Institutional and Real Estate. We are an independent registered investment advisory that includes two divisions:

  • Retirement Advisory
  • Foundations & Endowments Management

Our retirement advisory division deals primarily with company retirement plans which includes assisting clients with plan design, benchmarking analysis, investment advice and due diligence, regular fiduciary compliance, providing participant outcomes, and a monthly informational newsletter. Our function is solely a fiduciary in an advisor role. As an advisor, we do not manage our clients’ assets — we simply advise our clients on their plans.

Another thing unique to Heritage that sets us apart from the competitors: we have no conflicts of interest from affiliations, parent companies or proprietary products to cloud our judgment. This allows us to focus on our clients’ plans and confidently make unbiased recommendations to the clients we serve and consistently educate. We are also located right here in OKC.

Our experienced staff consists of advisors Matt McGuire and Brad Knowles, our investment committee, and myself as the Client Service Manager. To learn more about our staff and view our staff bios, please visit “Our People“ page.

Wishing you a happy and prosperous 2016!