Profile

• Publicly traded corporation
• Plans include: Two 401(k) and two non qualified
• Bundled recordkeeping for all plans
• 10,000 plus employees
• Client Since 2009

Background

• Client traditionally relied on the incumbent recordkeeping vendor for oversight of fees, investment performance and practices
• Limited benchmarking on fees or performance
• Use of retail mutual funds within investment menus

Challenges

• Multiple locations throughout the U.S.
• Length of time with incumbent vendor (over ten years) masked issues and created an artificially high comfort level in regard to service, support and fees
• Incumbent vendor had recently experienced a change in ownership, management team and service structure
• Membership in Client's oversight Committee had recently changed
• Presence of a separate account stable value product
• Overly specific investment policy statement (IPS) that potentially over-promised actions and deliverables
• Custom risk-based models

Strategy

• Realign existing IPS with more realistic parameters (in coordination with outside ERISA counsel)
• Evaluate existing service agreements and administrative processes, recommend changes
• Reduce plan level costs and investment expenses
• Realign investment menu with revamped IPS parameters
• Remove reliance on revenue sharing for payment of plan expenses
• Improve employee awareness and overall investment knowledge
• Launch a custom request for proposal process to assist in the benchmarking of existing fees, services and processes

Results

• Worked with legal counsel to implement a revised IPS
• Facilitated extensive research and training for new Committee members
• Transitioned plans to new, bundled provider with a better-aligned service structure
• Retooled internal administrative functions to improve accuracy and efficiency
• Increased investment category coverage within the investment menus
• Implemented a "Zero Rev" approach to the fund line-up improving fee transparency
• Switched to an off-the-shelf, risk-based product in lieu of the custom risk models
• Reduced annual recordkeeping expenses by nearly 50%
• Reduced average weighted expense of investment menus by over 60%
• Coordinated new education effort with additional tools and resources for participants