Profile

• Not-for-profit
• Plans include: 401(k) and defned benefit
• Bundled recordkeeping
• 260 employees
• Client since 2006

Background

• Client utilized same bundled provider for nearly 20 years
• Client relied on the recordkeeping vendor for all oversight
• No benchmarking done regarding fees or performance
• No knowledge of specific liabilities under multiple employer DB plan
• Employee education was provided sporadically by the vendor

Challenges

• 401(k) Plan inadvertently emphasized investment in after tax contribution
• 401(k) Plan design was harmful to participation, testing and administration
• No formal review of investments offered in either plan
• Numerous testing issues
• Participant asset allocation was skewed to one investment option
• Lack of support from incumbent provider

Strategy

• Conduct a complete fee analysis of funds and administrative cost
• Identify favorable plan design changes
• Reduce 401(k) plan level costs
• Draft and implement investment policy statement
• Lead education campaign for home office personnel and employees

Results

• With legal counsel implemented Plan design changes that helped reduce workload and improved discrimination testing results
• Initial negotiations with bundled 401(k) provider resulted in immediate savings of $60k in annual ongoing fees and increased rate on fixed rate investment
• Created and implemented an investment policy statement
• Trained Client's staff & officers to enhance understanding of administration and investment oversight
• Oversaw subsequent RFP for 401(k) that resulted in a significantly lower cost investment menu for participants with complete fee transaparency
• Oversaw change in market value adjustment formula that took a substantial exit penalty and turned it into a bonus payout
• Conducted multiple rounds of employee education to boost general investment knowledge & awareness of asset allocation strategies (dramatically reducing reliance on the one fund previously utilized most by participants)
• Benchmarked previously unknown liability under multiple employer DB and determined exit terms should the Client wish to pursue that option