August 22, 2005
Social(k) Allows Socially Responsible Investment Retirement Portfolios to More Fully Diversify
by William Baue
ExpertPlan administers a 401(k) platform that solves the problem of limited asset class
diversification by offering 25 SRI funds from nine fund families than span the spectrum.
Ever since the US Department of Labor (DOL)
issued the 1998 "Calvert letter" allowing
socially responsible investment (SRI) in company retirement plans covered by the Employee
Retirement Income Security Act (ERISA), more and more 401(k) plans
are adding SRI funds choices. All too often, however, plan administrators add just a smattering of
SRI funds, making it difficult if not impossible to diversify SRI retirement portfolios across
asset classes. Why not create a comprehensive platform offering a broad range SRI funds spanning
the gamut of asset classes?
That is exactly what Rob Thomas, a retirement plan
consultant with UBS Financial
Services, decided to do. Working outside his day job, he collaborated with ExpertPlan, a defined contribution retirement
plan platform provider, to launch the Social(k) Retirement Plan platform last week.
been working with companies for the past seven years providing a platform through ExpertPlan that
has a small selection of SRI funds, similar to other platforms available in the market," Mr. Thomas
told SocialFunds.com. "We made the decision to increase the number of funds offered, and took
existing technology from an established provider and built a better platform."
can be appropriate not only for individual employees wanting a full plate of SRI options, but also
for companies practicing corporate social responsibility (CSR).
"Today, many companies are
working hard to be better corporate citizens--from recycling to energy conservation, from community
involvement to corporate diversity, from shareholder advocacy to socially responsible investing,
these companies look to make positive contributions to local and global communities," explained Mr.
Thomas. "By offering a low-cost solution with a large number of SRI funds, we allow companies to
put their money where their mouth is and employees a chance to align retirement assets with their
What distinguishes Social(k) is its breadth of SRI choices, offering 25 funds
from nine fund families, including Calvert, Citizens, Ariel, Pax World, Domini, and Sierra Club, as well as SRI funds from mainstream firms such
as AXA Enterprise,
Berman, and Alger. However, Social(k) does not limit its choices exclusively to SRI options.
also offers about 30 regular fund families with over 300 funds to pick from, including actively
managed funds, index funds, and lifestyle funds--all no load or load waived since this is a
retirement plan platform," said Mr. Thomas.
Neither does Social(k) limit according to
business size, or even according to classification as a business.
"ExpertPlan has plans
for companies of all sizes, from start ups to companies with over 1000 employees--any size works,"
said Mr. Thomas. "Nonprofits with ERISA-qualified plans are welcome as well."
Social(k) website provides access to mutual fund performance data and fact sheets, as well as links
to fund prospectuses. When it comes to comparing mutual fund financial performance or social and
environmental priorities, however, Social(k) recognizes its limitations by leaving this kind of
consultation to financial advisors, such as those retained by companies to work with their
employees. Social(k) does offer assistance in setting up plans.
"Plan design and set-up
is done with the help of the ExpertPlan team that includes an ERISA attorney on staff," Mr. Thomas
said. "This is a fully bundled platform that includes the Third Party Administration work that
plans need to have done annually, which is all done online and is very easy to manage, according to
In terms of expense, the plan is user-friendly for participants.
"Transfers and exchanges can be made daily with no charge unless the funds are subject to
short-term trading redemptions, which the platform will process on behalf of the fund family," said
Social(k) allocates expense primarily to plan providers, charging participants
$40 per year but $950 annually to companies, as well as $750 to set up a new plan or $1,250 to
convert an existing plan.