Where To Invest
Alerus Retirement Solutions
What Is Alerus Retirement Solutions?
Alerus Retirement Solutions is an Arden Hills, Minnesota based provider of retirement solutions and employee benefits. Its products include retirement plans, such as 401(K)s and 403 (b)s. The company also offers health savings accounts, flexible spending accounts, health reimbursement arrangements, transportation spending accounts, and health benefit apps. The company’s website states that Alerus Retirement Solutions believes, “When participants succeed, we all succeed.” Based on its product and service offering, the company practices what it preaches.
Plan sponsors contract with Alerus Retirement Solutions because of its focus on participant experience. Most plan sponsors consider their retirement benefits as one of its crucial recruiting and retention tools. In a day and age where workers perceive building a retirement fund as an urgent need, companies must offer plans that provide their employees with a sense of security. To this end, companies look for providers that offer diverse investment choices and ease of use.
Alerus helps plan sponsors select, manage, and monitor their plans. These services are essential for plan sponsors. Investing and retirement planning are complex specialties. Plan sponsors are not professional investment advisors. They also have many responsibilities outside of the retirement plan, such as human resources duties. For this reason, plan sponsors value Alerus Retirement Solutions for managing the plan’s administrative duties and providing participant support. The company also provides fiduciary support and legal compliance services.
Many Alerus Retirement Solutions customers speak highly of the firm’s money managers. This team of investment experts manages funds and selects new investment offerings. Markets change over time, so a strong retirement solutions provider is constantly adjusting their offerings, researching new investment options, and coaching participants on investment strategy. Alerus Retirement Solutions has earned brand name recognition and industry awards for its plan sponsor and plan participant customer service.
Participants use the Smartplan product to manage their contributions and investment allocations. The Smartplan can be accessed from any computer using the participant login credentials. Once logged in, participants can view their account balances and history, adjust contributions, move money into different funds, and conduct research. After their initial enrollment, participants use the Smartplan feature to create their investment strategy.
The first step in creating a strategy with Smartplan is a quiz that determines the participant’s goals and risk tolerances. Participants answer questions about their income, age, target retirement date, and the estimate of years they will live after retirement and assets outside of their retirement plan. Based on this information, the Smartplan feature shows the participant how much he or she needs to save and recommends a monthly contribution amount.
Smartplan Projection Example
Smartplan models the participant’s retirement plan by showing what percentage of current income will be needed during retirement. For example, a worker making $50,00 per year, on average, needs $40,000 in retirement income, or 80 percent of pre-retirement income. Smartplan then adjusts the $40,00 downwards by the participant’s estimated Social Security benefit. In this example, the estimated benefit brings the yearly retirement income number down to $27,500.
Now the Smartplan calculator adjusts the $27,500 for inflation. In this example, the participant plans to retire in 30 years, which results in an inflation adjusted retirement annual income need of $66,825. In this example, the participant projects a 30-year retirement and has no other assets. Based on this, assuming a 6 percent annual return, the participant needs to contribute $292,499, which comes to $291 per month. The compound earnings on this money will provide enough growth to cover the inflation-adjusted income need.
Participants then select investment options based on their risk profile. The funds are broken down by these categories:
Index funds track specific indexes, such as a technology or oil index. The returns on these funds almost exactly match the index. Actively managed funds, on the other hand, are run by investment professionals who analyze securities and choose market-beating stocks. Though actively managed funds return higher profits than index funds, in the short term they can cause large losses in a volatile market. They are best for people with many years until retirement.
Plan sponsors contact the company for a custom quote.
How It Compares
We picked a few similar products available on the market to see how they compare.
Alerus Retirement Solutions
Reviews reveal that Alerus Retirement Solutions offers moderately priced services.
Fees & Commissions
Investment options for all investor types make Alerus a good solution for any plan sponsor.
The retirement plans provide a strong value.
Average returns are estimated a 6 percent.
Customer reviews show a high degree of satisfaction.
Fisher Investments provides 401(K) services to small and medium-sized businesses. It also specializes in retail and medical industry 401(K) plans. It is known for comprehensive customer services.
Price can be high for small businesses, but the service is well run.
Fees & Commissions
Fisher Investments offers a wide variety of funds, as well as Roth 401(K)s, auto-enrollment, profit sharing, and employer match services.
Fees add up for small businesses.
Variable by fund selection.
Strong satisfaction reported by customers.
TIAA provides retirement solutions for individuals and company plans. Plan sponsors receive support in their fiduciary and record keeping needs. The company specializes in custom plan design and management. Plan sponsors are able to choose a streamlined or full-service plan. This is very helpful for smaller businesses that need to reduce fees.
The company also offers plan engagement services. These services provide education to plan participants and encourage them to participate. TIAA encourages plan sponsors to provide employee matches through its safe harbor program, which has varying vesting options.
The streamlined plan choice is efficient and saves money.
Fees & Commissions
TIAA provides diverse choices.
The streamlined plan option is a cost saver, but the full-service plans may be too costly for some plan sponsors.
Return rates vary by customer.
Customer service provides participants and plan sponsors with answers to important questions. In addition, 401(K) plan customers are assigned a dedicated representative at the time of initial enrollment.
Edward Jones is one of the few full-service brokers in business today. With the internet, the investment brokerage business has become highly automated. As a result, investors are able to buy and sell stocks themselves while enjoying low commissions. Some brokerages even offer free trades to new or high-balance customers. Edward Jones, on the other hand, provides financial management services you can’t get through a discount broker.
The company employs 14,000 financial advisers around the country. They are located in branch offices in local areas, so they can have face-to-face client meetings. Founded in 1922, Edward Jones has a long history of excellent customer service. It has 7 million clients and $914 billion under management. Financial advisers provide customized plans and investment advice. The customer can choose an active plan or have the adviser make the investment selections.
Edward Jones uses a buy-and-hold strategy. It has hefty fees unless your account has several million dollars. Its retirement accounts, however, have a very low fee. Edward Jones is available to individual investors only.
Retirement accounts have a $40 fee. Taxable accounts have an investment management fee of 1.35 percent. Discounts apply for balances above $500,000.
Fees & Commissions
Edward Jones offers high-quality investment options in stocks, bonds, mutual funds, and ETFs. It does not trade in derivatives or commodities. Generally, its advisers stay with less volatile vehicles.
The management fees are high. Most investors like to keep fees below 1 percent.
Edward Jones offers full-service financial advising, which helps its customers over the long haul. In the short term, average investors can get lucky, but they often lose much of those gains when things turn south. Edward Jones financial advisers monitor markets and investments closely to protect their clients from devastating losses common amongst amateur investors.
The company’s 7 million customers like having their money professionally managed. Working with Edward Jones allows them to meet financial goals and protect their assets.
Retirement savings have become crucial to workers. In this job market, where employers must compete for the brightest talent, offering a top-flight 401(K) plan is essential. These plans not only help draw new talent, but they also retain employees. When workers are receiving 401(K) matches and other incentives, they tend to think of their future with the company as long term. They know the company values them and invests in their success. There is no better way for plan sponsors to communicate employee appreciation than by contracting with a quality 401(K) provider like Alerus Retirement Solutions.
Alerus Retirement Solutions provides 5-star products and services. The investment options provide both conservative and aggressive options. For example, its actively managed funds allow investors to beat the market but also carry a higher risk. These funds are managed by professionals who analyze individual stocks and pick those that are primed for bigger returns. However, in times of economic turmoil, these funds tend to take larger losses. Investors closer to retirement can choose between bond funds, conservative stock funds, and a guaranteed rate for money market funds.
Plan sponsors also receive excellent service. Their Alerus representative handles administrative work, record keeping, and legal compliance. In today’s legal world, there are many compliance issues that land companies in court. Alerus Retirement Solutions ensures compliance with the laws requiring fiduciary duty. These important laws can be a challenge for plan sponsors, who have a core business to run. Alerus takes the weight of compliance off plan sponsors’ shoulders while also providing employees with fantastic retirement plan options.