The age-old debate of using a bundled vs unbundled model for a 401k plan has troubled plan sponsors for years. Try a Google search for “Bundled vs. Unbundled 401k“. Every provider and 401k resource seems to list the pros and cons of each model and then either promote their strategy or leave the plan sponsor with all the pros and cons, still wondering which service model is best for their 401k plan.

Bundled vs Unbundled 401kBundled 401k Plans
The bundled 401k providers advertise simplicity and affordability. The provider will generally offer investment, recordkeeping, TPA (third party administrator) services and education services. A bundled 401k service model is essentially the one-stop-shop for a 401k plan. Sounds great, right?

Unbundled 401k Plans
The unbundled 401k provider comes along and explains that the individual roles involved in 401k administration and recordkeeping are distinct and specialized roles, and you won’t receive the same quality of service with a bundled approach. It’s the tailor, shoemaker, watch repair, cleaners, jewelry store and barber one-stop-shop equivalent for the 401k business. When you consider the roles and responsibilities of the third party administrator, recordkeeper, financial investment advisor and various other roles that may be included in a custom 401k plan design, perhaps the one-stop-shop will not compare with the quality of service that you get by choosing specialized service providers to build that best 401k team. Unfortunately, this solution is often impractical for small businesses that lack adequate knowledge, resources and funding to support a team of separate providers to build a custom 401k plan.

Meeting Your Fiduciary Responsibilities
Aside from the superior quality of service that you have with an unbundled 401k plan, you are in a better position to meet your fiduciary responsibilities within the guidelines of ERISA (Employee Retirement Income Security Act) as outlined by the Department of Labor. The inherent conflict of interest that stems from the merged, yet multifaceted role in bundled 401k plans has been the source of self-dealing allegations and ERISA class action lawsuits.

The Solution to the Bundled vs. Unbundled Debate
Great news for Plan Sponsors! There is a third service model which offers the best of both worlds. You retain the benefits of the bundled model with the flexibility of the unbundled model. Consider RPG Consultants the shopping mall of the 401k industry. We partner with 401k retirement plan vendors to provide a full-service custom co-bundled 401k platform that is tailored to meet your business goals and objectives.

RPG Consultants offers TPA and recordkeeping services, although clients have the flexibility of using only TPA, only recordkeeping or both TPA and recordkeeping services. Although a bundled model can raise the concern of conflicting interests, we avoid any risk of conflict by distinctly separating administrative (TPA/Recordkeeping) services from any investment-related services. The combination of any investment-related role may pose conflicts as the financial advisor or plan provider may be tempted to offer or recommend investments that increase their profits, despite the fact that it may not be in the client’s best interests. In accordance with the standards set forth by Erisa and our commitment to  following the spirit of the law, we believe that any investment related job should be separated from administrative responsibilities.

Features of the RPG Service Model

  • Build your team with our VIP partners or bring new partners to the team.
  • Our recordkeeping platforms offers true-open architecture investment choices of any mutual fund family, ETF, and managed strategy to ensure that your plan has diverse investment options with full honest fee transparency and disclosure.
  • Our collaboration with the 401k partners streamlines the plan design and administration, which in turn reduces costs and eases the responsibilities of the plan sponsor.
  • The recordkeeping and custodian services provided by separate entities ensures a system of checks and balances by verifying the plan assets through two separate channels.
  • Our distinct and separate service roles, backed by our CEFEX-certified standards of excellence, ensure that our plans are always in full compliance with IRS and DOL regulations and serve the best interests of our clients.

RPG Consultants is a leading recordkeeper and third party administrator (TPA) for 401(k) and other types of defined contribution plans, with deep actuarial expertise managing defined benefit and cash balance plans. Our goal is to understand your business and your strategic objectives to provide you with a complete, custom-tailored solution. For more information, please contact us at or 212-947-4800 ext 225.