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About Pension Systems Corporation

and the need for run-it-yourself 401k plans

 

 
1)

We hold the patent on its highly regarded run-it-yourself 401k technology

2)

The patented 401k software grew from years of full-service 401k plan administration experience

3)

PRESS RELEASE

4)

We have taken the 401k to a higher level

5)

We specialize in affordable, flexible 401ks for small and medium-sized companies

6)

We know that employees appreciate investment choice

7)

We know employers like saving money but need quality and asset security

8)

We know employers like our money-back guarantee

9)

Our roots stretch back to the 401k's early years

[topic 1]

Take your 401k plan to new heights.We Hold the Patent on Its Highly Regarded Run-It-Yourself 401k Technology

The Wall Street Journal said the following about Pension Systems Corporation's run-it-yourself 401k software:

"(It) allows small businesses to manage 401k plans as easily as a consumer navigates family finances with programs such as Quicken" (“Web Helps Small Firms Start 401(k)s,” 12/27/99, C1).

Pension Systems Corporation's 401k software and customized 401k plan proved so innovative in the 401k forum that it's patented. Features that are proving especially popular with clients include...

-- Point-and-click compliance testing with results in seconds

-- Safe harbor plan administration functions

-- Monthly participant activity statements

-- 401k loans, with automatic balance calculations and automatic payment withdrawals from qualifying contributions

-- Employer matching, profit sharing and qualified nonelective contribution functions (if any such contributions)

-- The ERISA 404c compliance log, which records fulfillment of every request for 401k information of any kind made by an employee


[topic 2]

The Patented 401k Software Grew From Years of Full-Service 401k Plan Administration Experience

Pension Systems Corporation's affiliate, Pension Systems Corporation (PSC), has been providing full-service 401k and other retirement plans since the mid 1980's.

-- PSC specializes in 401k plans for small and mid-sized businesses.

-- PSC was providing small businesses with affordable plans rich in investment options and plan flexibility long before other 401k providers even showed much interest in the small plan market.

PSC found that by diverging from the "big plan" administrative setup used by so much of the 401k industry and instead looking at the areas that seemed particularly inefficient and rethinking the process around them, it could cut administrative overhead and save clients money. For instance...

-- In traditional 401k plan administration, assets are pooled within investments and the administrator must track what portion of that pool belongs to each plan participant. PSC found this undesirable both from the individual investor's standpoint and from an administrative standpoint. PSC got mutual fund companies agree to set up INDIVIDUAL asset accounts for each plan participant, negating the need for PSC to do any per-asset, per-participant accounting. Participants instead receive monthly per-investment statements from the mutual fund company and monthly overall 401k account activity statements from PSC (summarizing participant contributions, employer contributions, loan withdrawals, loan payments, trust transfers, etc. by month, year and since joining the plan).

-- PSC created a prototype 401k plan for the IRS to approve that allowed for any of a range of choices for participant eligibility, employer contributions, 401k loans, and more to give clients the potential to create 401k plans that would prove popular with and beneficial to company employees.

-- PSC plans see participant rates that are nearly twice the national average.

-- PSC built and refined a 401k administration software system to streamline all areas of plan administration.

-- The highly efficient software system meant PSC was able to provide valuable services such as the monthly participant account statements as well as monthly compliance testing at no extra charge to its clients. Both the frequency of the services (other plans offered them, at best, quarterly or semiannually) and that they were offered at no extra charge was unheard of at the time, and frequent compliance testing is especially important to smaller plans because, with their limited number of participants, it only takes slightly out of balance contributions by a few highly compensated employees to overly offset those by non-highly compensated employees.

By the mid 1990s PSC felt it had so refined this system that its clients could use a slightly more layman's version to run their 401k plans themselves -- and save even more money. Especially if the software was customized to each client's exact plan, PSC saw how simple it would be for plans with 100 or fewer participants to do the basic data input and money transferring themselves, because the software does all the bookkeeping work. Thus the creation of Pension Systems Corporation to build a run-it-yourself 401k system from the PSC full-service system with the goal of creating a highly affordable yet quality and flexible 401k system.

-- Pension Systems Corporation chose to have 401k professionals work with clients in setting up their plans/deciding on their plan customization options, then to have software professionals customize each client's software to its exact plan to keep the client's monthly administration tasks down to a minimum.

-- Pension Systems Corporation was able to create a system that takes most of its small business clients less than 15 minutes month to use and that costs them less than $1500 year (less than $700 a year for small businesses with only a very few employees).


[topic 3]

PRESS RELEASE

(Summary) In conjunction with Union Bank of California, Pension Systems Corporation developed 401k Easy Online, a web-based 401k plan administration service based upon the success of the 'run-it-yourself' pc-based 401k Easy.


 
FOR IMMEDIATE RELEASE
CONTACT:
James Gilbert
President, Pension Systems Corporation
(800) 660-0050
http://www.401k-network.com
Sharon Woodson-Bryant, Union Bank of California
(213) 236-4145;
sharonw.bryant@selectbenefit.com
Donna Ross, Union Bank of California
(818) 662-1300;
donna.ross@selectbenefit.com
http://www.ubocez401k.com


Union Bank of California, N.A., Pension Systems Corporation, Launch Web-based 401(k) Administration Service for Small Businesses

LOS ANGELES Union Bank of California (UBOC), N.A., and Pension Systems Corporation have jointly developed a web-based 401k plan administration service based upon their existing desktop product. The service allows clients to set up and manage low-cost, option-rich "run-it-yourself" 401k plans from any location connected to the Internet - be it via computer terminal, web-enabled mobile phone or PDA device; access via a toll-free automated voice response system is also available. Like the desktop product, the system is geared particularly toward serving small businesses of one to 100 employees.

"The small business market has been grossly underserved and we are pleased with Union Bank's decision to develop this unique web-based 401k service to deliver full featured, self-service 401k plans to small business and potentially save clients 60% to 80% a year relative to traditional plan administration costs," says Jim Gilbert, President of Pension Systems Corporation

The new online service called 401k Enginuity (www.401kenginuity.com) affords employers plan-specific, convenient access and rapid processing of data and information requests relating to all areas of 401k administration activity, including point-and-click plan compliance testing with results potentially in seconds. Other features include participant account access, investment education materials and enrollment seminars via web casting.

"Our company is a current user of the 401(k) Easy desktop product and have been very pleased with our 'hands-on' experience and are able to process and validate our 401k activity in approximately 15 minutes a month," says Clark E. Cook, Controller for CHSI of Nevada.

As with the desktop product, the online service allows the client to customize the options and services it wants for its plan. Employer matching contributions, participant loans, a broad selection of mutual fund investments from well-known mutual fund companies and other features are available. All the client's customized choices, including investments, are integrated into its online plan administration service.

"Our online service will not only retain the affordability and flexibility of our desktop product but also add the conveniences of online access to plan administration information and provide expanded plan sponsor and participant functionality," stated Donna Ross, senior vice president and manager of UBOC 401k administration in a joint UBOC / Pension Systems Corporation press release.

UBOC intends to launch its online service in 2003.

Based in San Francisco, UnionBanCal Corporation is a bank holding company with assets of $35.8 billion as of March 31, 2001. Its primary subsidiary is Union Bank of California, N.A., the second largest commercial bank in California with 244 banking offices in California, six banking offices in Oregon and Washington and 18 international facilities. UBOC's Institutional Services & Asset Management Division has more than $138 billion in assets under administration servicing the 401k, employee benefit trust, custody, corporate trust and investment management markets. Their website is located at www.uboc.com.

Pension Systems Corporation, Inc. is a Los Angeles-based California corporation and an affiliate of Pension Service Associates (PSA), which has been providing full-service defined contribution retirement plans to small and midsize companies since 1982. Pension Systems Corporation developed 401(k) Easy, a desktop "run-it-yourself" 401k service, from PSA's experience and successes in the small plan marketplace. A retail web-based product called 401(k) Easy Online is now being offered. Licenses for 401k Enginuity, the enterprise Internet-ready plan administration software are now offered to financial institutions, TPAs, HR service providers, and others by Pension Systems Corporation, an affiliated company. Call (800) 660-0050 or e-mail James Gilbert at jgilbert@401k-network.com for more information.

 


(Summary) Pension Systems Corporation created the patented run-it-yourself 401k Easy, heralded by The Wall Street Journal "...allows small businesses to manage 401k plans as easily as a consumer navigates family finances with programs such as Quicken."



Reprinted from THE WALL STREET JOURNAL.

Web Helps Small Firms Start 401(k)s

YOUR MONEY MATTERS

By JEFF D. OPDYKE

Staff Reporter of THE WALL STREET JOURNAL

Tom Hendricks's employer recently adopted a 401(k)-retirement plan for him and his colleagues. Big deal, you say? Well, actually, it is. Mr. Hendricks and the 13 managers who oversee trust-fund operations for a California union have never had access to the hugely popular retirement accounts because of the expense and complexity of running them.

Now, though, cheap and efficient technology is changing those notions. Easy-to-use software and low-cost, back-office support - much of it available online - are opening retirement-savings benefits to an estimated 27 million small-business workers who don't have retirement plans. It's also allowing companies with inflexible and meager plans to upgrade to more appealing, full-blown 401 (k) s by pushing down administrative costs and challenging the idea that small-business owners can't manage the rule-bound accounts. "There's been a whole lot of mumbo jumbo used in this industry to create a Tower of Babel that running a 401(k) is tough," says Jim Gilbert, who has spent 15 years in the industry designing and overseeing retirement plans. Mr. Gilbert, president of 401(K) Pro Inc., Los Angeles, recently introduced a software program called 401(k) Easy - which allows small businesses to manage 401(k) plans as easily as a consumer navigates family finances with programs such as Quicken. "This is not brain surgery," he says.

Mr. Hendricks, who heads up the administrative office for the Southern California International Brotherhood of Electrical Workers-National Electrical Contractors Association trust fund, began looking for a 401(k) for the managers on his staff, who are not covered by the union or electrical employers. (The trust-fund office is the intermediary between workers and employers.) But plans administered by outside suppliers were so expensive - $17,000 in one instance - "that I shut the book immediately," Mr. Hendricks says. Some providers "didn't want to talk to us when they found out how small we were." Instead, he found the answer to the group's retirement needs on the Internet for less than $1,000 - in Mr. Gilbert's program. Now, his office controller, who has no background in back-office plan administration, is running the retirement program for the group, which is one of two test sites for 401(k) Easy.

Big financial-services firms are jumping into the game, too, setting up and administering 401(k) s at prices small businesses can afford. In October, Boston's giant Fidelity Investments introduced "e401k," the industry's first Internet-only 401(k)- plan. Safeco Corp., a big Seattle insurance and mutual fund firm, plans soon to introduce its own Internet option for small-business 401(k) s. Small shops are "the new opportunity" in 401(k) s, according to Steven Sundberg, an assistant vice president at Safeco.

Fidelity's e401k is geared specifically for businesses of between five and 50 workers. It allows employers such as Giage Ltd., a 26-person Cincinnati software firm, to build a retirement plan directly online, and requires that employees access accounts only over the Net. The cost: a $750 set-up fee and yearly charges of $1,750, plus $20 a participant. By comparison, the average 401(k) can cost $5,000 a year or more - a price "that would have been a ‘preventer' for us," says Christopher Baucom, chief financial officer at Giage. Fidelity also handles onerous compliance tests for an added fee. With a smaller, less-flexible 401(k) plan that Reprinted from THE WALL STREET JOURNAL Giage once had, one Internal Revenue Service form took Giage " a whole day to complete and was just a mess" says Mr. Baucom. Fidelity entered the market because internal surveys showed that 401(k) s "haven't been affordable on the very small end," says Peter Smail, president of Fidelity Institutional Retirement Services Co. "That end is grossly underserved." Federal lawmakers tried to promote broader retirement coverage for small-business employees several years ago by creating simplified retirement plans. The legislation reduced or eliminated some of the most onerous rules, but imposed on employers certain contribution mandates.

For example, Collins, Butler & Co., a 24-person accounting firm in Enid, Okla., opted against a simplified Safe Harbor 401(k) because it required the firm to contribute 3% of income to a plan for each employee - a costly proposition. A traditional 401(k) doesn't require that, so long as certain tests are met. Instead, John Garrison, managing shareholder, turned to 401(k) Easy after spending the last three years running the company's plan in-house with a homemade spreadsheet. He expects the new software will cut his 401(k)-administration time to less than an hour a month from about five hours. "A lot of companies are going to look at something like this," Mr. Garrison says, "and see that there's finally a good way to administer a 401(k) plan at a reasonable cost."

The idea of businesses managing their own 401(k) plans in-house, however, doesn't sit well with some financial advisers. "People who have tried [to run their own plans] have botched them up pretty badly," says Richard Kaplan, chief executive officer at Benefit Planning Inc., a Marina Del Rey, Calif., employee-benefits consulting firm that administers 401(k) plans for employers. Indeed, mistakes can prompt IRS "penalties that can be severe," says David Wray, president of the ProfitSharing/401(k) Council of America, a Chicago trade group. An employer mistake, he says, can nullify an entire plan and impose immediate tax burdens on all participants. Of course, complicated rules and high fees aren't the only reasons many small companies have spurned 401(k)s. "They're too constrained financially, or the owner wants a pension for himself, but doesn't want to make matching contributions for employees," says Annika Sunden, associate director for research at the Center for Retirement Research at Boston College.

Attitudes are changing, though. A recent survey by Spectrem Group, a San Francisco financial-services consulting firm, found that 167,000 small businesses, representing roughly 1.6 million workers, expect to add a retirement plan in the next two years. In today's tight labor market, Ms. Sunden says, a growing number of small businesses are deciding that they can't afford not to offer retirement benefits if they want to hang on to hard-to-replace workers.
Reprinted from THE WALL STREET JOURNAL

[topic 4]

We Have Taken the 401k to a Higher Level

When 401k plans first came on the scene in the late 1970's, all the industry focus was on the big, big companies. Lots of employees meant lots of investment dollars meant lots of revenue for the 401k providers and investment companies. Everything from fee schedules to service regimes was set up to capture and service big 401k plans.

But the big plan market got all divvied up. By the late '80s and early '90s some 401k providers developed pared-down 401k plans with which to approach the less colossal companies. They called the plans "bundled" or "turnkey" plans, because using them was designed to be as simple as turning a key.

-- Bundled/turnkey plans usually come as a preset package of administration plus investments; "prefabricated" is an alternate adjective that's often used.

-- Turnkey plans are highly simplified, pared-down versions of the full-fledge 401k plans offered to high-paying companies.

-- Turnkey plans take the decision-making out of creating a 401k plan; they're like buying an off-the-rack suit: it may fit fine or it may not, but you're stuck with it if there's little tailoring available.

-- Turnkey plans offer a reduced price in exchange for reduced service, far fewer investment choices, and inflexible plan "options."

-- Many small and mid-sized companies have adopted turnkey plans, frustrated by the lack of flexibility and truncated service but glad, nonetheless, to have at least some kind of 401k plan for their employees. 401ks rank #2 in employee benefit choices; only health insurance gets more votes.

About the time the idea of turn-key plans was first coming to market, our affiliated company recognized the need for a 401k product that suited more than just the largest companies. The turn-key plans being developed were not necessarily the best answer.

Pension Systems Corporation created a semi-bundled plan that merged the simplicity and lower cost of turnkey plans with the flexibility and scope of many Fortune 500-type plans.

-- PSC developed an innovative approach that allowed its plans to include investments from multiple mutual fund companies -- for no additional charge. Not only were clients NOT limited to some preset investment bundle, they had an almost unlimited array of mutual fund families from which to select their plans' investments.

-- PSC used IRS-approved prototype documents that allowed for the most popular options.

-- PSC created an administrative system that complimented rather than replicated the administrative work being performed by the third-party administrator, saving everyone time -- and money. PSC then passed these savings on to its clients.

-- PSC was one of the first (and still remains one of the few) 401k providers to offer MONTHLY employee statements, and MONTHLY compliance testing -- all at no additional charge.

[topic 5]

We Specialize in Affordable, Flexible 401ks for Small and Medium-Sized Companies

While most vendors in the 401k industry were scrambling for the big company 401ks, Pension Systems Corporation affiliate Pension Systems Corporation (PSC), was concentrating on creating plans suited to small and medium-sized companies. PSC made sure its plans contained the diverse features and offerings small-scale companies needed yet at prices they could afford.

-- Since the mid-1980's PSC catered to small and medium-sized companies, providing them with quality full-service plans. Pension Systems Corporation was founded as the smaller plan run-it-yourself 401k specialists.

-- Over the years, many of PSC and Pension Systems Corporation clients' businesses have grown substantially. Because PSC and Pension Systems Corporation 401k plans allow for wide investment selection and a range of plan options that can be amended at any time, the plans have been able to grow and adapt to clients' burgeoning work-forces.

Both PSC and Pension Systems Corporation focus on keeping their 401k plans flexible to clients' needs and changes in those needs because however affordable a plan may be, it's of little use if it is ill-suited to your needs.

-- Flexible means investment choice -- real investment choice, like the entire lineup of MyDiscountBroker.com self-directed discount brokerage account investments, not some mini-mix of proprietary investments.

-- Flexible means giving employers say over their plan's participation requirements.

-- Flexible means not mandating employer contributions, but allowing them for companies that want to contribute to their employees' accounts.

-- Flexible means letting companies select the rate at which they'll make matching, profit-sharing and or qualified non-elective contributions, if any.

-- Flexible means letting companies choose the vesting schedule(s) they want for any employer matching and/or profit-sharing contributions being made.

-- Flexible means letting employers choose how often they want to open up their plan to new participants (annually, quarterly, monthly...)

-- Flexible means creating plans employers are proud to offer to employees; plans with the inherent flexibility to grow and adapt to any changes in needs over the years.

[topic 6]

We Know That Employees Appreciate Investment Choice

Even if plan participants only rarely change or add to their investment mix during the life of their 401k participation, employees like to know they HAVE choices.

-- Receiving a 401k enrollment package that offers only a few investment choices rarely goes over well. Investors feel tentative, penned-in -- uncertain that this 401k, however convenient, will really be the best long-run savings vehicle for them.

-- Receiving a 401k enrollment package that offers a broad spectrum of investments gives employees the confidence that, however their savings goals and temperament may change in the years between now and retirement, this 401k can meet their needs -- whatever those needs may be.

-- No spectrum of investments is broader than the complete lineup of MyDiscountBroker.com self-directed discount brokerage accounts available with MyEZ401k!

-- Stocks, bonds, mutual funds, and more are all available with MyEZ401k through MyDiscountBroker.com's self-directed discount brokerage accounts.

 

[topic 7]

We Know Employers Like Saving Money But Need Quality and Asset Security

The driving force behind Pension Systems Corporation's run-it-yourself 401k software is making 401k plans affordable to small and mid-sized companies and appealing to their employees.

-- Quality is never compromised in pursuit of a low price.

-- The 401k plans are employer-trusted so clients save themselves the annual trustee fees they'd have to pay with many other plans.

-- Providing clients with quality service, quality tools, tremendous investment choice and plan flexibility are Pension Systems Corporation's driving forces.

 

[topic 8]

We Know Employers Like Our Money-Back Guarantee

As you may have surmised, we really believe in 401k plans and strive to create the best 401k plans possible. We've spent years designing, developing, refining and testing our run-it-yourself 401k system and are confident that we've come up with a product that can meet a wide variety of 401k needs yet is easy to use.

To help potential 401k clients gain the same confidence in our innovative approach to 401k affordability, we back 401(k) Easy with a money-back guarantee:

-- If, for any reason, you're dissatisfied with 401(k) Easy and contact us within 60 days of receiving your customized system, we'll refund the annual fee you paid for 401(k) Easy (the annual fee is the fee that varies with plan size; click here to view a pricing chart, or visit our Pricing and Price Comparisons section of this website).

-- We cannot, however, refund the first-year-only one-time 401k plan and 401k plan administration software customization fee.

Because the customization fee is nonrefundable, we highly recommend people try out 401(k) Easy before ordering their customized system:

-- You can download a copy of our 401k software that's been customized to service a fictitious plan right from this website. The download is ABSOLUTELY FREE, and it includes an interactive tour to introduce you to the 401k software's features. Go to our 401k Software page for details and to access the download.

-- You can, alternatively, have us send you the sample customized 401k software on CD-ROM. There's a $35 fee to cover our costs, but if you later purchase an actual 401(k) Easy system, we'll apply the $35 to your purchase. Visit our 401k Software to request we send you a CD-ROM of the sample customized 401k software, or e-mail us with your request.

The above pretty much covers our 401(k) Easy money-back guarantee, but feel free to visit our official 401(k) Easy Money-Back Guarantee page.

back to page topics

 

 

[topic 9]

Our Roots Stretch Back to the 401k's Early Years

Pension Systems Corporation founder, James Gilbert, has been a professional 401k investment advisor for more than 20 years. His career began shortly after the time when the 401k plan first was introduced.

-- In his early years, Jim became frustrated by the unwillingness of traditional 401k providers to create 401k plans that fit the needs and budgets of small and medium-sized companies.

-- The 401k providers were applying fee schedules and service regimes (not to mention high participation minimums) to all 401k clients despite that the parameters were relevant only to large companies.

-- The few available "lower-cost" 401k plans were turnkey plans, which were off-the-rack 401k plans with severely limited investment availability and inflexible plan "options" (such as no loans, preset participation eligibility parameters, and no employer contributions -- or worse yet, mandatory employer contributions at a preset rate).

-- In 1986 Jim and some like-minded colleagues formed Pension Systems Corporation (PSC) with the goal of creating affordable, flexible 401k plans for small and medium-sized companies.

-- PSC created The 401k Solution, an IRS-approved prototype 401k with multiple, pre-approved option choices to give clients plan flexibility while keeping administrative costs down.

-- PSC created an administrative system that complimented rather than replicated the administrative work being performed by the investment custodian(s), saving everyone time -- and money.

-- For the first time, small and medium-sized companies had access to flexible, quality 401k plans they could afford.

PSC continues to provide full-service 401k plans as well as 403(b) plans (for nonprofit organizations), SEPs (for self-employed persons) and other government-sanctioned retirement savings plans. Pension Systems Corporation handles all the run-it-yourself arrangements.



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