PLANSPONSOR - April/May 2018 - 40

keep ICMA-RC, but performing the RFP
enabled it to negotiate another fee reduction
in 2015, from 23 basis points to 10
basis points.
" I'm not the No. 1 fan of the procurement
process, because it's a lot of work.
But doing the full RFP was the best way
for us to renegotiate the fees, " Cockrell
says. " It paid off for participants. "
'The Cheesecake Factory' Menu
As it negotiated lower recordkeeping
fees, the committee also narrowed the
457 plan's investment menu. The plan
had over 150 investment options before
consolidating vendors in 2005, an action
that reduced the menu to 35. " Prior to
the change, we had what our consultant
would refer to as 'The Cheesecake
Factory' menu for our investment lineup, "
Akafia says. " We had numerous funds in
various categories, which our employees
found to be overwhelming and confusing,
and which oftentimes caused indecision
or failure to enroll. "
The committee discussed, philosophically,
what " menu " it wanted and for
comparison, as models, used the menus
of two other restaurants with Dallasarea
locations: Houston's, which has a
one-page menu, and In-N-Out Burger,
which has only a handful of options. " The
committee decided that employees would
best respond to the Houston's menu, so
they would still have a number of choices,
but not an overwhelming number like they
had previously, " Akafia says.
Before the 2015 RFP, the committee
had pared the menu down even more, to
30 options. In conjunction with that RFP,
the menu got further culled to 24 options.
As assets consolidated, the plan could then
move to lower-cost share classes in many
cases, Cockrell says.
The 457 plan now has an asset-based
fee generated exclusively through shareholder-service
fees-a type of revenue
sharing-between fund managers and the
recordkeeper. " Any excess fees between
the revenue generated through the investment
options and what is required for the
40 PLANSPONSOR.com April-May 2018
recordkeeping fee is returned to the plan, to
offset related expenses, " Cockrell explains.
She says the committee has talked about
moving to an explicit, flat administrative
fee but worries it " might discourage
members with small balances from joining
and retirees with larger balances from
retaining their funds in the plan. "
The committee now reviews investments
and investment fees every quarter,
Cockrell says. " For recordkeeping fees, it
is typically something we talk about every
year, or every other year. We look at: 'Are
we in line with our peers in the area?' "
The 457 plan committee is advisory in
nature, and the ultimate decisionmaker is
City Manager Glasscock. " All of our initiatives
ultimately funnel through Bruce, "
Cockrell says.
Plan Ambassadors
Education targeted to the city's diverse
work force also has helped improve
participation in the Plano plan. " You
have the public safety groups-the police
and fire-who typically earn more than
the rank-and-file employees in the city.
And just because of the nature of their
job, they tend to retire at an earlier age, "
DiCristofaro says. " So they pretty much
get the picture on the need to save on their
own, to supplement their retirement.
Most of the struggle with Plano, and with
similar plans, is in convincing the rest of
the work force that saving voluntarily is a
prudent move and that it will help them
Public DC Finalist
North Carolina Supplemental Retirement Board of Trustees
Raleigh, North Carolina
In 2016 and 2017, the North Carolina Supplemental Retirement Board of Trustees unbundled
services, consolidated recordkeeping and renegotiated investment fees-an effort
significantly lowering fees and steamlining processes in the state 401(k), 457 and 403(b)
plans. The unbundling alone brought an approximately $1 million fee reduction; participants
in the 401(k) and 457 plans now pay a $31 flat, annual recordkeeping fee. The
Supplemental Retirement Plan (SRP) staff and board also worked to lower investment fees.
The reduction of $2.2 million, or about 7%, was achieved through renegotiation with plan
investment managers.
Read the full finalist profile on plansponsor.com/PSOY2018.
move toward a retirement that's more
economically feasible for them. "
Plano's HR department periodically
runs reports on the participation breakdown
by department, and then the plan's
education subcommittee works with
ICMA-RC to do targeted education for
the departments. The written communication
has helped, Cockrell says, but the
most effective communication happens
when the 11 plan committee members
talk individually with employees in their
departments about the plan.
" Our police and fire department
members who have been on the committee
do a really good job of mentoring new hires
when they come into [their] departments.
They tell them, 'You should sign up for
the plan,' and when they're getting their
annual salary increase, they tell them,
'You should put some of that money into
the plan.' Before those employees know it,
they have sizeable balances in the plan, "
Cockrell says. " And our other committee
members are doing a lot of championing
within libraries or parks and recreation.
We have found that it's the most effective
way of getting people to sign up for the
plan. "
" They look at committee members
as ambassadors of the plan, " DiCristofaro
says. " They're not only providing effective
oversight of the plan, but they're taking
the message back to employees in their
department about why it's a good idea to
consider participating. -Judy Ward

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