A Multnomah Group case study
A client, a large university, continually sought to adopt new initiatives, products, and services in pursuit of improving plan performance and participant satisfaction. This client had maintained a particular vendor relationship for over 90 years; despite work from both parties the relationship had become stale, leaving the client in search of new ideas. The client was also not eager to potentially cause disruption to a Plan that had operated without any major problems for nine decades.
In 2011, this client retained Multnomah Group to evaluate the plan from top to bottom and develop a strategy through which the vendor could meet the unique needs and goals of the institution. Additionally, Multnomah Group would create a process for the institution to implement, measure, and enforce that discipline. At the outset of the engagement the client outlined the following goals:
The goals were ambitious, but the constraints perhaps more so. The client wanted to change how the plan looked, felt, and operated, but also maintain vendor relationships that were woven into the fabric of the university.
Coming up to speed on a new plan, sponsor, and committee is a top priority when evaluating how a plan operates and determining opportunities for enhancements. We began our engagement with a top to bottom plan review, including:
Multnomah Group was able to identify a number of areas where restructuring could lead to increased efficiency, cost and ease in administering the Plan.
First, with the goal of simplifying the Summary Plan Descriptions provided to participants, the sponsor had been maintaining two separate plans. This structure resulted in increased administrative costs due to separate mailings, annual audits, and legal costs associated with the maintenance of two separate plans.
Second, the service contract was vague in terms of articulating the vendor’s role in ensuring compliance with various rules and regulations under ERISA, as well as identifying what those services would cost. In order to comply with specific rules under ERISA as well as its fiduciary duty, the client needed assistance to help determine whether the fees being paid were reasonable.
Finally, the Plan document dictated that fiduciary responsibility for the plan lay with the Board of Directors. Meaning, the Board was responsible to (for example) evaluate services and investment products, and determine whether the features of the Plan were in fact helping participants reach their retirement goals. The Board wanted guidance to help them understand their duties and to develop methods to effectively and competently meet their duties.
Multnomah Group provided guidance and recommendations to the client in order to implement the following changes to the Plan and its administration:
Overhaul of the Plan Structure
Renegotiation of the Service Agreement
Creation of a Retirement Plan Committee Charter and Development of Fiduciary Responsibility Procedures
Development of an Investment Policy Statement and New Investment Philosophy
Developed an Education Policy to Improve Plan Understanding
To find out how the Multnomah Group can help your organization achieve its goals, please feel free to contact one of our consultants.
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