PLANSPONSOR - April/May 2019 - 46

Centre Lane Partners, LLC
Plan Sponsor of the Year Honoree
I
n September 2017, when HighTower
Fiduciary Plan Advisors began to
work with Centre Lane Partners, LLC,
a private equity firm in New York, with
ownership stakes in 20 companies,
" our first goal was to look at all of the
companies in its portfolio and make
sure we had the right plan design for
each, " says Jania Stout, practice leader
at the advisory firm. " I was impressed
with how involved Quinn Morgan and
Rory Kirkpatrick were in making sure
the proper plan design was in place to
help the employees save for a better
retirement. "
Centre Lane and HighTower
decided to introduce automatic enrollment
at a 6% deferral rate paired with
a 1% annual escalation up to a 15% cap.
Morgan, co-founder and a managing
director of Centre Lane, wanted to
make sure the portfolio companies used the correct design to
encourage their workers to save and prepare for retirement.
" Quinn and Rory were 100% behind this plan design, " Stout
says, adding that it is highly unusual for a private equity firm to
take an interest in the retirement readiness of employees resulting
from this type of business relationship.
Centre Lane and HighTower's second goal " was to streamline
the investment options in all of the plans and to strip out all
revenue sharing from the funds, " Stout says. " We implemented
a fund lineup across the board that we felt set participants up for
the most success. "
The same summer it had selected HighTower, Centre Lane
also issued a request for proposals (RFP) for a recordkeeper
and selected Vanguard to assume that role for all of the plans.
Centralizing HighTower as the plans' 3(38) fiduciary adviser
and using Vanguard as the exclusive recordkeeper has reduced
participants' fees, on average, about 40%, Stout notes. " This has
been a huge win for the employees. "
Founded in 2007, Centre Lane began to more actively
oversee the retirement plans of its investment companies about
seven years ago, says Kirkpatrick, a managing director. It made
sense to the firm because " we are consistently involved in the
major decisions of our portfolio companies. While this initiative
46 PLANSPONSOR.com April - May 2019
Photo by James Rajotte
Managing Director Rory Kirkpatrick
doesn't result in a direct financial
impact on the portfolio companies'
bottom lines, it has significant indirect
effects, is meaningful to the company
employees, and aligns well with our
focus on employee engagement and
satisfaction. We've received very positive
reactions from both the companies
and their employees, " he says.
Ten companies in the portfolio
have implemented auto-enrollment.
To further facilitate participation
at some that are retail companies, the
firm combined open enrollments for
both the health care and the 401(k) plan,
says Stout. " Making it more of an event
creates more traction and has convinced
1,500 workers at the retail companies "
to join their company's plan.
" Because we are a 3(38) fiduciary,
when we meet, the first topic we review
is how the investments are doing and whether we made any fund
changes, " Stout says. " Then we cover fiduciary training for them
and close out with plan demographics and success stories at
some of the companies, whether it was increased participation or
a financial wellness topic that got a lot of traction. "
Stout says working with Centre Lane's portfolio companies
is inspiring because of the power of collaboration. " The energy is
pretty unique, " she says. -Lee Barney
Plan at a Glance
NUMBER OF 401(k) PLANS: 20-one at each of the companies
in the firm's portfolio
PLAN ASSETS IN DB PLANS: $2 million - $10 million
PLAN ASSETS IN 401(k) PLANS: $50 million - $250 million
PARTICIPATION RATE: 50% - 90%
AVERAGE DEFERRAL RATE: 7.72%
AUTOMATIC ENROLLMENT/ESCALATION: Yes/Yes (at 10 companies)
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PLANSPONSOR - April/May 2019

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