Pentegra :: Outsourcing 401(k) Plan Management



Expanding retirement plan services for business customers is often a challenge for banks. Due to the technology demands of the 401(k) and pension business, the bank may find that outsourcing the "back office" operations of their retirement plan business is the best way to enhance services for their customers and focus on control of the client relationship.


Typically, banks build their retirement services business among local customers and service their book of retirement business in-house. While banks are often strongly committed to expanding their retirement services practice, there comes a point in time where they reach critical mass in terms of resources that can be allocated to both sales and servicing existing relationships. Banks will often consider building their own retirement services platform, acquiring another firm, or partnering with an outsourcing provider that can offer them the best combination of services and cost. Often acquiring another firm presents culture issues and added expense, building a third-party administrator business from scratch is similarly expensive, but the non-banking revenue that retirement plans provide is too valuable for the bank to pass up.

Knowing that they want to focus on future growth opportunities, banks will often determine that it is more efficient to outsource plan administration and recordkeeping of their retirement business to free up staff to focus on servicing and expanding their retirement business. The key is finding the right outsourcing partner. The challenge lies in finding a retirement services provider that the bank can work with as a true partner, not just a vendor, to expand their retirement services capabilities, yet remain at the forefront of the client relationship.


  • Focus on servicing existing clients and growing business
  • Reduce overhead expense
  • Streamline administration
  • Enhance technological capabilities
  • Maintain dominance of the bank's brand with clients


Banks can begin a search process with an RFP to a number of potential retirement plan vendors. Specifically, they should seek vendors that offer a range of services, including sales support, plan sponsor and participant education, plan administration and recordkeeping, compliance services, and plan consulting. Look for vendors that can provide customized solutions, including a customized sponsor and participant website, and full sales and marketing support to help you expand and grow your existing business. And, because this is a technology-driven business, banks should only consider vendors with a superior, state-of-the-art recordkeeping system and web interface.

Pentegra provides the opportunity for commercial banks and trust companies to offer a fully outsourced, private-label retirement product. Working in conjunction with yourcurrent client service practice, the product is tailored to let you focus on meeting the needs of your clients, offering a highly flexible platform that allows you to choose the services that you want to outsource, and those which you want to provide directly-based on what works best for your business model.