PLANSPONSOR - October/November 2018 - 72

PLAN PROFILE
Fee Transparency
J
ohnson, Mirmiran & Thompson
Inc. (JMT) is an employee-owned
engineering/architectural company
with corporate headquarters in
Hunt Valley, Maryland, plus 38 other
offices. The firm offers consulting and
technology services for infrastructure
projects nationwide. In the 14 years since
Mike Kolar, assistant chief financial officer
(CFO), has been with JMT, the company
has tripled in size. He says, " It's definitely
been a company that is growing. "
This has had implications for
its KSOP retirement plan, which
combines an employee stock ownership
plan (ESOP) with a 401(k) plan. " We
ultimately reached 100% ESOP in 2011,
which we believe has been a factor in
developing the positive culture of the
firm, " Kolar says. " If the company
does well, then everyone's retirement
account does well. "
Because the retirement program
A KSOP plan sponsor eliminates revenue sharing
have increased pressure on plan fiduciaries
to evaluate fees, the plan committee
made the decision to strip out all
revenue sharing and move toward fixed
fees in the KSOP, Kolar says. " Much of
the decision was made in order to be fee
transparent, " he says. " We consulted
with the firm's adviser, Fiduciary Plan
Advisers at High Tower [also located in
Hunt Valley, Maryland] and completed
the process over a year ago. "
The goal for JMT was to drive out
Mike Kolar, assistant CFO, JMT
is an important employee benefit, the company is committed to
many best practices. " We kicked the tires a bit by establishing
automatic enrollment and automatic increase in 2016, " Kolar says,
adding, " We put everyone at a 6% contribution rate, with a 1%
annual increase unless they chose to opt out of that program. "
Each year, the firm makes a contribution to the ESOP
program that gets allocated to eligible participants. To qualify,
employees need to have worked 1,000 hours within their first
year of employment. " It exceeds most 401(k) matches that are
out there, " Kolar says.
In addition to a large overall focus on education-which
includes programs for field staff with limited connection to an
office-JMT has ambassadors at its different locations who are a
conduit to pass on information about the two plans.
With an awareness that federal fee disclosure regulations
SNAPSHOT
PLAN SPONSOR
Johnson,
Mirmiran
& Thompson
Inc. (JMT)
KEY PLAYER
Mike Kolar,
assistant CFO
PLAN
KSOP
embedded revenue sharing but not be
disruptive by making too many fund
changes. Fortunately, Principal Financial
Group, the plan's recordkeeper, had open
architecture and offered a full range
of share classes in each of its existing
funds. JMT simply stripped out the
revenue sharing and moved the funds to
the lowest-cost share class.
With this accommodation available
from the recordkeeper, Kolar says, " We
didn't have to negotiate. It has every share class available, and
High Tower was able to advise on that without any restrictions. "
Jania Stout, practice leader and co-founder of Fiduciary Plan
Advisors at High Tower, says a few funds did not offer a zerorevenue-share
class. In those cases, the lack was made up for by
utilizing fee leveling, which would credit the participant back any
revenue sharing used in that fund. " This ensures all participants
pay the same fee and everything is fully transparent, " she says.
A considerable amount of education was offered to counterbalance
any potential confusion. Kolar says, " We expressed to
them how there would be a new line item on their statement for
fees, when previously fees would have been buried in the return. "
Asked if participants were saving money by changing fund
classes, Stout says, in several cases, the plan was able to lower
the total cost, so it was a better deal for all. -Judy Faust Hartnett
401(k)
PARTICIPATION RATE: 89.7%
AVG DEFERRAL RATE: 8.9%
# OF PARTICIPANTS: 1,689
TOTAL PLAN ASSETS: $128,364,212
ESOP
AVG ACCOUNT BALANCE: $52,820
# OF PARTICIPANTS: 1,599
TOTAL ASSETS: $84,459,589
72 PLANSPONSOR.com October-November 2018 Art by Chris Buzelli
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PLANSPONSOR - October/November 2018

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