Vanguard Expands Small Business 401k Service to TPAs

VALLEY FORGE, PA (April 10, 2013)—Vanguard is helping more workers to invest for retirement by expanding the availability of its popular low-cost 401(k) plan service for small- to mid-size businesses to plan sponsors that work with third-party plan administrators.

Vanguard Retirement Plan Access™ was introduced in October 2011 to bring low-cost funds to a market long in need of a high-value, reasonably priced retirement plan package combining investments, recordkeeping, and other services. The service was initially directed toward plan sponsors, as well as fee-only advisors and planners who work with sponsors.

Vanguard Retirement Plan Access is now also available to third-party administrators (TPAs), which typically provide plan design, compliance, administrative support, and other assistance to plan sponsors. As a result, these sponsors can continue to work with their TPA while gaining low-cost investments and recordkeeping for their participants.

The decision to expand the availability of Vanguard Retirement Plan Access was prompted by increased demand for the service, which is approaching $2 billion in assets under management after only a year and a half of existence. A growing number of sponsors of small- to mid-sized plans work with TPAs; in fact, Cerulli Associates predicts that TPA-influenced assets will increase to 22.5% of 401(k) assets in 2014.*

“Giving plan sponsors greater choice in how they offer this key benefit to their employees can mean more people in the United States will be able to save for retirement with low-cost investments through a high-quality retirement plan,” said Jing Wang, head of Vanguard Retirement Plan Access.

“Industry research has shown that Americans will save more through 401(k) and other defined contribution plans with proper incentives and services,” said Chris McIsaac, Managing Director of Vanguard's Institutional Group. “Making Vanguard Retirement Plan Access available to a wider group may encourage more plan sponsors to offer plans that are low cost, effective, and easy-to-use—all of which is good news for workers who need help saving for retirement.” Mr. McIsaac noted that Vanguard has been a long-time advocate of expanding defined contribution plan access, improving plan design, and increasing fee transparency.

Vanguard Retirement Plan Access is available to a range of plans, from start-ups to those with $20 million-plus in assets. The service helps plan sponsors and financial professionals fulfill their fiduciary responsibility to select and monitor appropriate investments by offering them a flexible platform that supports thousands of investment options. It emphasizes Vanguard’s low-cost, broad-market index funds, including the Vanguard Target Retirement Funds, to provide participants with diversified market exposure. Sponsors may also construct their plan’s investment lineup using non-Vanguard funds and ETFs.

Ascensus Inc., a nationally recognized recordkeeping firm, provides a range of services on Vanguard’s behalf. Depending on whether a plan sponsor accesses Vanguard Retirement Plan Access directly or through an advisor or TPA, these services can include plan design, recordkeeping, administration, call center, compliance testing and documentation, participant education materials, dedicated plan sponsor and participant websites, and trustee services.

All investing is subject to risk. Investments in Target Retirement Funds are subject to the risks of their underlying funds. Mutual funds are subject to risks, including possible loss of principal. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date. An investment in a Target Retirement Fund is not guaranteed at any time, including on or after the target date. Investments in bond funds are subject to interest rate, credit, and inflation risk. Diversification does not ensure a profit or protect against a loss in a declining market.

About Vanguard

Vanguard, headquartered in Valley Forge, Pennsylvania, is one of the world’s largest investment management companies and a leading provider of company-sponsored retirement plan services. Vanguard manages more than $2.15 trillion in U.S. mutual fund assets, including more than $270 billion in ETF assets. The firm offers more than 170 funds to U.S. investors and more than 70 additional funds in non-U.S. markets. For more information, visit vanguard.com

# # #

*From Cerulli Associates Inc.’s “U.S. Retirement Markets 2012” report.

All Vanguard asset figures are as of March 31, 2013, unless otherwise noted.

Optional services to be provided by third-party providers that are not affiliated with Vanguard.

Vanguard Marketing Corporation (“VMC”) is the distributor of the Vanguard Funds and a subsidiary of The Vanguard Group, Inc. VMC is a registered broker-dealer, member FINRA and SIPC. Retirement plan recordkeeping and administrative services are provided by The Vanguard Group, Inc. (“VGI”). VGI has entered into an agreement with Ascensus, Inc. to provide certain plan recordkeeping and administrative services on its behalf. Ascensus is not affiliated with VMC, The Vanguard Group, Inc., or any of its affiliates. Ascensus is a registered trademark of Ascensus, Inc.

For more information on Vanguard funds, visit vanguard.com, or call 800-662-7447 to obtain a prospectus. Visit our website, call 800-662-7447, or contact your broker to obtain a prospectus for Vanguard ETF Shares. Investment objectives, risks, charges, expenses, and other important information are contained in the prospectus; read and consider it carefully before investing.

Vanguard ETF Shares are not redeemable with the issuing Fund other than in Creation Unit aggregations. Instead, investors must buy or sell Vanguard ETF Shares in the secondary market with the assistance of a stockbroker. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.

Mutual funds and ETFs are subject to risks, including possible loss of principal. Foreign investing involves additional risks including currency fluctuations and political uncertainty.

Vanguard Marketing Corporation, Distributor of the Vanguard Funds.