Broker Check

DC Investment & Recordkeeping Repricing

Background

WILLIAMS GROUP was engaged to assist an Agricultural company that managed a $350 million defined contribution plan. Benchmarks revealed that the portfolio was underperforming, record keeping expenses and investment expenses were above market. The plan sponsors investment committee had no experience with benchmarking for DC plans and wanted to investigate market opportunities while retaining the existing recordkeeper.

Challenges

  • Negotiate with existing recordkeeper to move from a percentage of assets to a flat dollar amount per head and reduce costs to plan sponsor.
  • Perform target date analysis to determine appropriate glide path, investments structure (active vs passive) and document for fiduciary file.
  • Renegotiate existing fund line up to reduce participants cost.

01

Source Data

02

Benchmark Recordkeeping Data

03

Investment Analysis & Review Performance Track Records

04

Final Selection of Investments

05

Finalize Recordkeeping Fees & Contracts

06

Transition Oversight

Process

  • Source data from 2000+ plan sponsor record-keeping costs in negotiating with current vendor plan record keeping fees.
  • Performed due diligence of participants by age, savings rates, asset allocation, and retirement readiness to determine appropriate target date fund (TDF)solution.
  • Reviewed performance track records and perform in-depth investment analysis of the underlying funds within the TDF solution.
  • Renegotiated investment fees for 8 out of the 16 funds that make up the plan matrix.
  • Negotiated and reviewed fees and contracts
  • Provided oversight during blackout period.

Outcome

  • Converted recordkeeping fees from a percentage of assets to flat dollar per participant, reduction in cost by 50% resulting in $200,000 in annual savings to plan sponsor.
  • Negotiated reduced fees for eight investments resulting in $200,000 in annual savings to participants
  • Transitioned TDF to a new TDF series with a more appropriate glide path, investment mix and consistent performance.
  • The transition to new funds and TDF solution was accomplished without a hitch.