In certain circumstances, your plan’s custodian may receive additional compensation in connection with your plan, often referred to in the financial industry as “float” income. The intent is to avoid having any portion of a participant’s retirement plan account not earn an investment return, such as when new deposits or transactions are made after 2pm ET and therefore cannot be invested until the following business day. In such cases, Vestwell will automatically invest all such balances into a float income program; Vestwell will also invest proceeds from transactions that participants initiate in order to generate cash to cover the payment of any fees associated with the transaction.
Participant accounts will be earning interest on these un-invested balances without any action on their part. Vestwell’s main custodian partner, Folio, publishes the interest rates used to calculate float income here. Participants will see their interest earned through the program on the transaction log of the portal and in their monthly benefit statements.
- Interest rates for float income automatically adjust depending on the balance in the participant’s account. Interest rates and tiers can change at any time based on current market conditions without notice to participants or the Plan Sponsor.
- Interest is calculated daily and posted to participant accounts monthly.
Who is Our Custodian?
Your custodian is outlined in your Plan Services Agreement. For most Vestwell plans, the custodian is Folio Financial. Folio refers to their float income as their Cash Sweep program and you can find additional information about it here as well as in the Fact Sheet on your portal. See the Terms and Conditions of the Customer Agreement, which is referred to in the Vestwell Plan Services Agreement, for additional information about Folio.
Folio Financial, Inc. and Folio Investments, Inc. are affiliates of Goldman Sachs & Co. LLC and subsidiaries of The Goldman Sachs Group, Inc., a worldwide, full-service investment banking, broker-dealer, asset management, and financial services organization.
All investments involve some degree of risk. This information about the Folio Cash Sweep program is provided for educational purposes only. The cumulative effect of fees and expenses can significantly reduce the return on investments and we encourage you to review the prospectus, fund fact sheets, and other information before making any financial decisions regarding your retirement plan. Vestwell is not providing you with financial, legal, or tax advice and you may wish to consult your own advisor for further guidance or advice before making any investment.