BUNDLED VS UNBUNDLED

The bundled provider is typically an investment or insurance company that provides investment offerings, recordkeeping/administration and educational services. Generally, no customization of these plans is allowed. This is the "one-size fits all" approach. Additionally, the plan sponsor (you) will be expected to provide data as the provider requires. There is little flexibility or customization in how data can be submitted or received.

The unbundled approach is one in which you become the "bundler". Plan sponsors use a combination of independent service providers for each critical task. The plan sponsor has the ability to select the "Best in Class" service providers. In these arrangements, the service providers specialize in their fields and can provide for customization and flexibility for investments, administration functions, plan design and participant services.

These arrangements are often referred to as the "open architecture" arrangement. This term is used because the arrangement not only allows for flexibility between service provider selections, plan design and participant services, but also allows for full transparency of fees!

Areas of Difference Between Bundled and Unbundled Solutions:

In a Bundled arrangement, you are required to perform certain tasks; whereas in an unbundled arrangement, the TPA will do them. Here are some differences regarding a Bundled arrangement:

• You are required to upload contributions in a specified format to the provider's system.
• You are required to review/approve/sign-off on all distributions and loans.
• You are required to upload compensation and update census to the provider's system.
• You are required to prepare an extensive year-end package (Form 5500 information).
• Typically no review of plan provisions after the plan document is written.
• Typically no one individual person assigned to be plan representative.
• Fees are usually not transparent.

• We provide you with transparency of fees.
• We provide you with an all inclusive fee schedule for administration.
• We provide you with flexibility on how to submit contributions.
• We handle processing of all distributions and loans and other participant services.
• We specialize in testing throughout the plan year and review all possible avenues to pass testing or reduce refunds.
• We review the plan provisions annually and make recommendations where needed.
• We review IRS legislation continually and make specific recommendations if applicable to you.
• We assign one highly experienced administrator to work directly with you and a back-up administrator when your administrator is absent for any reason.

THE "ULTIMATE UNBUNDLED SOLUTION"

We take the unbundled approach one step further – MVP Plan Administrators, Inc., in partnership with your financial consultant and the custodian, have created the ultimate in unbundled services.

We have brought together the foremost professionals in the qualified plan industry to create a unique "partnership". Working together, we view your company uniquely. We will customize the design of your retirement plan to your company. You don't think your company is a "one size fits all" and neither do we.

We work together, sharing data and information so that you do not have to coordinate and communicate with four or five different people. The flow of information among your service providers is seamless and transparent to you.

HOW THE "OPEN ARCHITECTURE" ARRANGEMENT WORKS

• You select the investment advisor/broker you want, who acts as the investment advisor or financial consultant.
• Typically, the investment advisor/broker selects the custodian where the assets for the plan will be held.
• MVP Plan Administrators, Inc. acts as the record-keeper and/or third party administrator (TPA) for the Retirement Plan. MVP is your contact for all purposes for your Retirement Plan, except for specific investment-related questions, which should be directed to your advisor/broker.
• MVP Plan Administrators, Inc. is the conduit through which data flows. Therefore, you provide yearly census data to MVP, and we filter the data to satisfy the administration and compliance needs of the plan. Additionally, we are the conduit for placing trades for contributions, transfers, distributions, loans and all activity for the plan investments through the selected custodian.

HOW FEES ARE ASSESSED AND ALLOCATED

• know what the fees are
• know who is being paid
• know how much they are being paid
• know for what services they are being paid

• Mutual fund companies have built into the internal fund expenses their sales costs and the costs of providing the holders of the mutual fund with an account statement, prospectus, etc. This is often referred to as a 12(b)(1) fee and/or shareholder service fees.
• In an open-architecture arrangement, these costs are rarely incurred by the mutual fund company since the investment custodian holds the plan assets (mutual funds) and provides these shareholder services.
• The custodian negotiates with the mutual fund companies to return a portion of the mutual fund expense as described above. Mutual fund companies may be willing to return some of their revenue, because they cannot justify keeping all of the internal fund expenses when they are not providing the services.
• Furthermore, the custodian does not incur significant sales costs and does not provide account statements to the actual mutual fund shareholders (plan participants). Therefore, they will keep very little, if any, of these returned "revenues".
• The custodian forwards this revenue on to the TPA/Record-keeper (MVP) who provides account statements to the mutual fund shareholders (plan participants).
• Many TPAs will keep this revenue and not disclose what is going on "behind the scenes".
• However, not only does MVP disclose all revenue sharing arrangements and uses 100% of the money forwarded to offset already existing and contractually stated fees. Therefore, this revenue sharing is not really revenue at all! It is a reduction in the cost of the already fully disclosed fees.

FINALLY.....