We were recently engaged by a plan sponsor to assist them in the review and ongoing oversight of both their defined benefit and defined contribution plans. The goal of the organization was to ensure these benefits were competitive for both the employer and employee. This is really no different than what employers are doing with health insurance and many other vendor relationships.
As we started to review their current plans, we decided what they needed was a ‘Reboot’. In my mind, this fresh start for their plans entails a review of all vendors who touch these plans to ensure competitiveness of fees, efficiency for the human resources staff, and better benefits for employees.
In the review of the defined contribution plans, we moved the two plans to a single vendor, streamlined and improved the investment options, and saved 30% in fees. We also asked the winning vendor to rethink how they interacted with employees from an educational standpoint.
The company now has a dedicated education specialist onsite who is receiving great reviews for how she interacts with employees and speaks ‘to them’ and not ‘above them’. As a result, the HR dept. is getting rave reviews and the education specialist is booked through 2013 to meet with employees one-on-one and provide group meetings with specific departments who were hard to reach in the past.
In addition, we took a fresh look at the pension plan and moved those assets (as well as the administration and benefit payments) to the defined contribution vendor. This saved the employer approximately 25% and allowed all employees to view these benefits online at a single website. Again, the HR dept received rave reviews for the convenience this offered to employees. The final piece of the DB plan was the actuarial relationship the employer has had for years. They respected the work being done and it was determined the pricing was fair. This relationship was left 'as is' and the recordkeeper is currently working with them going forward.
This ‘Reboot’ has given the company a fresh start, which created a better benefit for employees and streamlined the administration of these plans for the HR department while also reducing costs.