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The objective of 401k Prism is based on the premise that most
401k plans contain a modest to large percentage of mutual
funds that are mediocre (performance) at best; and that the
typical 401k Plan Sponsor or Trustee, would prefer a list of
high quality funds if there were a straight forward, objective
method of selecting those funds.
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Mission Statement
"The
goal of 401k Prism is to assist Plan
Sponsors and Plan
Trustees
in meeting their fiduciary responsibilities of due
diligence by providing a thorough and objective analysis of,
and the process documentation for selection and regular maintenance of, fund offerings
to Plan Participants."
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Performance (Returns) is most important to Employees although
selecting a list of funds based on past Returns does not result
in a high level of success. While Returns are the highest
priority, clearly Risk is a very important element as well. 401k
PRISM analysis will evaluate the relative (to the peer group)
Return and Risk of each fund in three categories each, along
with four additional criteria (one criteria measures level of
Return against the level of Risk) to take a comprehensive ten
step look at each Mutual Fund to determine the overall level of
quality. The evaluation of historical data does not guarantee
future results, however, there is a high incidence of higher
returns (compared against peers) when selecting higher quality
Mutual Funds from this diverse evaluation of historical data.
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The caliber of Mutual Fund Offerings of 401k Plans can easily
fall under a simple Bell Curve:
The 401k Prism Report Card is the first step in the evaluation
process of an in force Plan. It will provide a comparison of the
performance and risk characteristics of your current plan with
other 401k Plans. The 401k Prism Performance Analysis Report
(PAR) will help determine which funds are weighing the plan
down. The 401k Prism Investment |
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Selection Report (ISR) will assist in the selection of higher
caliber funds from a large list
Often, a change in 401k vendor is not necessary, simply better
selection from the current vendor’s list of available funds. The
401k Prism Market Search Report (MSR) will scan the marketplace
for the vendor offering the highest quality list of Mutual
Funds.
And finally, a three or five year subscription to 401k Prism,
will provide the documentation necessary for the fiduciary
responsibility of due diligence in monitoring the quality and
appropriateness of Mutual Fund offerings in a 401k Plan. |
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