PLANSPONSOR - April/May 2018 - 52

responsibility for us: Its job is to make the
decision as to whether to hire or fire us. To
get Landscape Structures out of the [investment]
fiduciary environment, it can't have
any say on the funds in the plan. "
Hiring a plan-level 3(38) adviser made
sense to Caslavka and his colleagues. " We
realized we could get the same end result
with our plan investments. So why take
fiduciary responsibility for the investments
when, for a small fee, we can get
an advisory firm to do that? " he says. But,
in their fiduciary role of evaluating intellicents,
plan committee members always
study the advisory firm's investment analysis
to ensure they are comfortable with
its decisions, he says.
As part of its plan-level 3(38) work,
intellicents also puts together the five
risk-based custom funds-composed of
the plan's underlying core investments-
that now serve as the 401(k) plan's automatic
enrollment default. " As the 3(38),
we determine what the asset allocations of
those custom funds are and the specific
funds used in each, " Arends explains.
New hires who neglect to make
investment selections get automatically
enrolled into the default risk-based fund
that intellicents classifies as best for their
age range. Auto-enrolled participants
will get moved into more conservative
risk-based funds, over time. Employees
already working at the company who want
to invest in one of the risk-based funds
can either choose for their allocation to be
static-i.e., remain in a less conservative
fund, past 40-or enroll in the default
investment, in which case they automatically
will get moved down the risk spectrum
over time. More than half of participants
who affirmatively elected the riskbased
funds chose to go into the default.
LSI pays the full intellicents advisory
fee, plus the full recordkeeping
fee and other administrative fees. " I've
been here 27 years, and we've always
done it that way, " Caslavka says. " There
has never even been a discussion about
doing it another way. We would rather
have the company take care of that and
52 PLANSPONSOR.com April-May 2018
have participants gain as much in their
accounts as they can, instead of having
money pulled out of their account for
those fees. "
Participant-Level 3(38) Work
Landscape Structures also hired intellicents
to take on a wide-ranging 3(38) fiduciary
adviser role at the participant level.
Previously, it had tried hiring an advisory
firm to give employees advice. " It wasn't
for a flat fee, though, " Caslavka says. " The
firm was getting paid based on the investments
our employees picked, and it also
was trying to sell participants other products.
We weren't comfortable with it. "
Intellicents offers individual participant
meetings on-site several times a year,
and participants also can call the firm or
go to its office. Its participant-level work
for Landscape Structures includes both
traditional retirement plan-type advice
and traditional wealth management-type
advice. A new hire with no 401(k) plan
experience may want advice on how much
he should save in the plan, for example. A
longer-tenured employee may want advice
on picking a 529 plan to save for his child's
college education. " Our fee is a flat fee, so
we have taken out any inkling of a conflict
of interest, " Arends says.
Getting Results
In 2016, the sponsor started working with
behavioral economist Shlomo Benartzi's
90-10-90 benchmarking goal: 90%
participation, 10% average deferral and
90% of participants adequately diversified.
As of last August, the 401(k) plan had
94.87% participation, a 7.64% average
deferral and 80% participant use of intellicents'
asset-allocation tools/advice.
" One of our committee's objectives
is to reach the 90-10-90 goal in about
five years, " says Caslavka, who looks to
plan design and intellicents' personalized
participant education to help achieve
that. He says, " We have to create an environment
that fosters participant engagement. "
-Judy Ward
Total Retirement Offering Finalists
UCB, Inc. Smyrna, Georgia
The U.S. branch of global biopharmaceutical company UCB, Inc., has focused on its
401(k) plan fees since it terminated its defined benefit (DB) plan last year. The firm worked
closely with provider ADP to leverage its technology advancements and reduce recordkeeping
fees by 46% from 2014 through 2017. In addition, it decided to expand which
participants pay advisory fees, reducing the Spectrum Investment Advisors' per-participant
fee by half. To be transparent and to follow industry best practices, it made this change so
that all of its participants-both active and terminated-with a balance are now charged
a low adviser fee. Additionally, UCB has shifted its 401(k) investment menu more toward
passive funds and eliminated revenue sharing.
RLI Corp. Peoria, Illinois
Participants in RLI Corp.'s 401(k) plan have an average balance of about $180,000-
40% above the average participant balance among midsize insurers. The property and
casualty insurance company does not target percentage goals for employees' pre-retirement
replacement income. The company instead wants to provide a benefit that allows
employees to achieve their personal retirement goals. It feels its plan design and total
employer contributions, averaging over 14% for the past five years, will let them do
that. Employees have access to both a 401(k) and an employee stock ownership plan
(ESOP), and the firm believes that the two plans play complimentary roles in its work
force management.
Read the full finalist profiles on plansponsor.com/PSOY2018.

http://www.plansponsor.com/PSOY2018 http://www.PLANSPONSOR.com

PLANSPONSOR - April/May 2018

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