When Less is More

A Multnomah Group Case Study


An independent, non-profit research institute with 401(a), 403(b), and 457(b) plans split between two low-cost vendors, seeks to improve participant outcomes while further reducing the cost of investing to participants. The client had established two service providers running separate portfolios of proprietary investments available to participants. One provider was TIAA-CREF, providing proprietary annuity and mutual fund investments. The other was Vanguard, providing the entire menu of Vanguard investment products. 

Providers competed for participant enrollments by providing onsite employee counseling sessions. However, because a two-vendor environment can inhibit fiduciary governance and operational efficiencies when all plan data needs to be consolidated by the client, The client engaged in a search process to evaluate potential solutions. The objectives of the client search were as follows:

  1. Minimize the cost of investing to participants
  2. Outsource compliance with IRS and Department of Labor disclosure and reporting requirements
  3. Improve the operational efficiency and internal controls of the plan
  4. Improve and streamline employee communication

The unique challenge for a shared TIAA-CREF / Vanguard client revolved around the already significantly below average cost of investing for participants, and loyal vendor followings by participants to both providers.  How would the client consolidate the providers without having the change be perceived as a reduction of choice and increase in participant fees? The client determined that the best way to evaluate alternative vendor structures was through a competitive search process.


The client retained Multnomah Group to assist in the vendor search and assessment process. Responses were solicited from incumbent providers as well as a pre-screened array of alternate providers outlining costs, education strategies, and service guarantees.

The client was able to narrow the search to incumbent providers to the plan and further negotiated with the providers to establish a unique approach that achieved all the operational and fiduciary governance benefits of consolidation, while maintaining many of the features participants were concerned with losing.

The client retained TIAA-CREF as the provider in an open-architecture arrangement. Many of the Vanguard investment positions were retained in the new investment array at TIAA-CREF in less-expensive share classes than their retail structure at Vanguard. The client permitted the plans to establish new brokerage account agreements under the consolidated plan, thereby allowing participants who wished to keep Vanguard funds that were not available in the new array to do so in a brokerage account with TIAA-CREF. The client negotiated with TIAA-CREF to waive the Vanguard trading fees under the new brokerage arrangement so participants who wished to continue making periodic purchases would be permitted to do so.

Vanguard participants were mapped to TIAA-CREF, but any participant who wished to avoid mapping could establish a brokerage account with TIAA-CREF and retain their investments in their current share class and cost structure.


Minimize Cost of Investing to Participant

  • Average weighted cost of participant investing reduced by 12%
  • Participant paid recordkeeping and administration costs reduced by more than 50%
  • Significant reductions in client workload as administrative items and disclosures were outsourced to provider 

Outsource Compliance with IRS and Department of Labor Disclosure and Reporting Requirements

  • TIAA-CREF assumed responsibility for Form 5500 filing, SAR and404(a)-5 distribution, limits monitoring, and compliance testing
  • Service guarantees were established to ensure good governance and oversight of outsourced items

Improve the Operational Efficiency and Internal Controls of the Plan

  • Vendor, payroll, and data conversion revealed opportunities to improve internal controls and reduce the opportunity for routine operational failures

Improve and Streamline Employee Communication

  • Negotiated 6 days a month of employee onsite counseling
  • Branded employee communication and education plan to highlight employer and create retirement awareness
  • Increased supplemental contribution rates by 0.4%
  • Increased supplemental participation rates by 5%

To find out how Multnomah Group can help your organization achieve its goals, please feel free to contact one of our consultants.

Multnomah Group, Inc.
Phone: (888) 559-0159
Fax: (800) 997-3010