Profile

• Publicly traded corporation
• Plans include: 401(k), defined benefit, and two non-qualified
• Bundled recordkeeping on 401(k); originally unbundled on DB
• 1,000+ employees in locations throughout the U.S.
• Client since 2001

Background

• Client traditionally relied on recordkeeping vendors for oversight of fees, performance, and practices
• Employee education provided sporadically by the vendor
• No benchmarking done regarding fees or performance
• DB plan came via acquisition

Challenges

• Multiple employee locations across the U.S.
• Lack of support from incumbent providers
• Testing issues within the 401(k) Plan
• Client's staff had no prior experience with DB plans
• Data challenges regarding DB and related non-qual

Strategy

• Conduct a complete analysis of all relevant aspects of the vendor-provided services for all plans
• Distribute RFP to benchmark potential 401(k) service providers
• Reduce costs for employees while improving in investment performance
• Improve administrative efficiencies
• Implement education campaign with specific goal of improving basic investment knowledge
• Build on initial campaign to provide customized, ongoing education
• Specific to the DB: analyze unbundled arrangement and pursue best possible structure; embark upon data clean up; tailor investment strategy to goal of termination (liability driven strategy)

Results

• 401(k) Plan moved to new service provider resulting in substantially lower employer and participant costs
• Subsequent asset growth in 401(k) inspired a second move several years later further reducing costs and improving investment options while adding increased transparency
• Migrated paper files for DB plan to electronic media, allowing pursuit of termination
• Moved DB to a bundled provider saving in excess of $100,000 per year in actuarial and custodial charges
• Liability driven strategy resulted in impressive gains in the market collapse of 2008; taking underfunded plan to overfunded status
• Terminated DB plan