PLANSPONSOR - April/May 2018 - 44

had one-on-one meetings with employees.
" We had three of our CFPs [certified
financial planners] out for a week,
meeting with employees, " says the plan's
adviser Paul Sommerstad, senior ERISA
[Employee Retirement Income Security
Act] consultant at Blue Prairie Group
in Chicago. " We met with nearly 200
employees, and, in the end, we had only
two who were passively enrolled into the
plan: Everyone else who got enrolled made
an active decision to enroll in the plan. "
These one-on-one employee meetings
had two goals beyond participation,
Sommerstad says. " We encouraged
employees to defer at least 6%, so they
would maximize the new employer match.
And 85% are now saving at least 6%, " he
says. " Second, we wanted to help people
with their asset allocation. "
Blue Prairie encouraged employees
who did not want to make their own assetallocation
decisions to utilize the new
plan's default, BlackRock LifePath Index
Funds. " Twenty-nine percent of the plan's
assets were in the BlackRock funds before
the meetings, and 42% were in those funds
afterward, " Sommerstad says. " We encouraged
employees to bring their log-in information
for [recordkeeper] Fidelity with
them to the meeting, so these changes
could be made right there and then. "
A Focus on Fees and Governance
IHA also consolidated from two recordkeepers
to one, effective January 2017.
" We conducted an RFI [request for
information] that led us to maintaining
Fidelity, " Muehlfeld says. " But Fidelity
reduced its fee, due to our newly merged
plan's increased asset size. " The renegotiated
recordkeeping fee is approximately
25% less than the average fees participants
paid to the two recordkeepers premerger,
she says.
Also effective January 2017, IHA
moved to fee levelization, eliminating
revenue sharing where possible and crediting
back to participants the revenue
sharing in the three remaining plan funds
that pay it. At that time, the plan moved to
44 PLANSPONSOR.com April-May 2018
a 32-basis-point (bps) annual, asset-based
participant fee " to ensure an equitable fee
approach, " Muehlfeld says.
The relaunched plan additionally
included a streamlined investment lineup
and significantly reduced investment
fees. " We wanted to create an investment
menu that offered diversity but
eliminated any redundancies, " Muehlfeld
explains. " Counting the target-date suite
as one option, the number of investments
was reduced from 13 to nine. " Before the
plans merged, their asset-weighted investment
expenses ranged from 30 bps to 46
bps. " After the plans merged, the assetweighted
investment costs had dropped to
15 basis points, " she says.
The merged organization also has
strengthened plan governance. The Illinois
Hospital Association had handled governance
via a finance and audit committee of
the board of directors, and MCHC had had
an internal group of senior leaders serving
on its benefits committee and overseeing
its 401(k). IHA has a five-member plan
committee: Farrere, Muehlfeld, one
finance staff member, one executive from
an IHA business unit, and the president
and CEO of affiliate HealthCare Associates
Credit Union. The committee oversees
both organizations' plans.
The newly formed body put together
a charter and got fiduciary training from
Blue Prairie Group. Each committee
member also signed a document acknowledging
that he understood the governance
structure, the committee charter and his
fiduciary duties.
To keep on track with good governance,
the committee has what Farrere
calls a " matrix " -a schedule of the
committee's work during the year. It specifies
when the committee will do what:
" The point is to keep all items from the
investment policy statement [IPS] in front
of us, " she says. " That way, we make sure
we're doing everything we say we are doing
in the IPS. " -Judy Ward
Nonprofit DC <$100mm Finalists
Saint Anselm College Manchester, New Hampshire
Saint Anselm College started working on a recordkeeper consolidation for its 403(b) plan in
2015, shortly after hiring Cammack Retirement Group Inc. The college had two providers,
dating back over 25 years, preventing the plan from achieving economies of scale-and
leading employees to think Saint Anselm sponsored two retirement plans. After selecting
TIAA as its one recordkeeper, it reduced administrative costs by about $90,000 annually.
The plan also moved to open architecture for investments, did an investment-focused re-enrollment
and voluntarily converted from a church plan to an ERISA [Employee Retirement Income
Security Act] plan, providing its participants with safeguards and protections.
The First Church of Christ, Scientist Boston, Massachusetts
The decision to freeze its defined benefit (DB) plan, in 2013, led The First Church of
Christ, Scientist, to consolidate 403(b) recordkeeping services with a single provider. As a
result, it implemented a 3% nonelective employer contribution and increased the employer
match to 100% of up to 5%. For the first five years after the freeze, the church made
an additional age-/service-based contribution, ranging from 2% to 10% of pay, for preretirees.
In January 2014, the plan began automatically enrolling new employees at 2%
and increasing them by 1% annually up to 5%. Under its new recordkeeper, now part of
Transamerica Retirement Solutions, the sponsor, last year, negotiated a 35.5% reduction
in recordkeeping fees, primarily due to the increase in assets into the DC plan after the
DB plan's termination; last year, the sponsor negotiated a further 22.5% reduction and
changed to a participant leveled-fee approach.
Read the full finalist profiles on plansponsor.com/PSOY2018.

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PLANSPONSOR - April/May 2018

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