MRIC
Michigan Retirement Investment Consortium (MRIC)
Many of you have heard the acronym "MRIC" but do not necessarily know what it stands for. The following was an article published in 2009 by the Grand Rapids Press that we hope will help explain MRIC a bit better.
"School district consortium hires Midwest Capital Advisors to offer employee retirement plans"
Published: Wednesday, September 23, 2009, 10:01 AM
The Grand Rapids Press / mlive.com
GRAND RAPIDS -- A local investment advisory firm is one of six vendors chosen by a consortium of school districts created to advise employees on their retirements savings plans.
Michigan Retirement Investment Consortium -- with 232 school districts, including all those in Kent County and Grand Rapids Community College -- has contracted with Midwest Capital Advisors to offer 403(b) and 457 retirement plan options for more than 100,000 employees.
Those plans have an estimated $1 billion in assets.
The deal will lower account-administration fees for employees, said Mike Hagerty, the Kent Intermediate School District's assistant superintendent for administrative services and co-chairman of the consortium board.
"The internal management fee has really been cut in half," he said. "These districts came together to really get purchasing power. It's a great example of schools working together."
Internal Revenue Service rules that took effect this year require more employer oversight of 403(b) plans, which are the public-sector equivalent to a 401(k). The districts formed the consortium to outsource the work to a third party, TSA Consulting Group.
TSA is charging the consortium an $18-per-account annual fee, Hagerty said. That's about 20 percent less than the fee quoted to KISD on its own and is more than made up by the fee reduction from vendors, he said.
The consortium, which won an achievement award from Michigan School Business Officials this year, wrote a plan with new investment options.
The other vendors are AIG Retirement, The Legend Group, MEA Financial Services, PlanMember Services and Waddell & Reed.
Hagerty said those five offer traditional, full-service investment models with paid advisers. Midwest Capital, a 6-year-old Grand Rapids firm, was chosen in a separate bid proposal as a lower-cost option for employees with more online, Web-based direction than an individual representative, he said.
The local firm's contract offers an alternative to "overdoing the service, at a price," said Hank Swain, chief operating officer for Midwest Capital.
"Our offerings are so much lower in cost because I think we're giving the right kind of service," Swain said. "Ours is pretty simple.
"There clearly is an economy of scale here. We are able to really get this thing skinnied down to where it's a very small percentage (fee)."
