An international behemoth just entered the U.S. 401(k) market in time to help plan fiduciaries and participants prepare of the implementation of the SECURE Act.
Smart, one of the largest global recordkeepers doing business in the U.K., Ireland, Australia and Dubai, launched today in the U.S. to offer its cloud-based retirement plan solutions to employers of all sizes. Smart US will be headquartered in Nashville, Tenn. and based on its current business, becomes the second-largest recordkeeper operating in the country by number of plans served.
Because Smart was founded in the U.K., where it has worked with companies compelled by law to enroll their employees in defined contribution plans, it has built a platform capable of serving any kind of employer, said Jodan Ledford, CEO of Smart US, by using "pooled-employer plans" to reach the smallest firms.
“Smart’s experience with compulsory plans meant they had the design capability to handle employers of hundreds of thousands of employees, all the way down to those with two or three employees,” he said. “Their ability to offer services to pooled employer plans
Smart US will offer plan sponsors, participants and advisors a streamlined, unified process for creating and enrolling in plans. Ledford said Smart allows advisors to set up a new plan for an employer “in a handful of days” in many cases, and that the process is simplified to a point where it might entice advisors who haven’t entered the retirement plan space. All of the stakeholders in a retirement plan will be able to access Smart across all of their devices.
Ledford hopes Smart can help close the U.S.’s retirement gap by allowing even self-employed people access to modern plan infrastructure at a reasonable cost.
“Our initial aim is focused on adoption and growth and trying to get a better participation rate in these plans,” he said.
Smart’s platform launches with a “retirement guidance tool” on board that helps plan participants understand how their nest egg might translate to retirement income and in the future, will illustrate the consequences of allocating some of their balance to a deferred annuity.
Ledford himself is a veteran of the defined benefit plan space, but most recently served as chief client officer at Legal & General Investment Management.
“With a defined benefit plan, you know exactly what the monthly income is going to be, but in defined contribution plans, you reach retirement with a pot of money and converting that into income is a big challenge,” he said. “I see that as the next frontier for defined contribution plans, helping people understand how they can spend that nest egg once they get to retirement.”