Retirement Plan Benchmarking and Analysis

A detailed retirement plan analysis resulted in improved market knowledge for providing quality retirement benefits to employees, a reduction of risk exposure to plan compliance issues, and enhanced financial performance of the organization's retirement plan.

Background
A midsize health care system in central Ohio with over 650 employees needed an independent, objective analysis of the company's retirement plan. The driving force behind the analysis was to review, document, and provide the necessary due diligence to meet the retirement plan committee's fiduciary responsibility of offering a benefit to their employees that provided adequate services and fund offerings at a reasonable cost. In addition, the committee wanted to ensure the benefit was comparable to other options when benchmarked against similar plans.

Challenge
In partnership with the health care system, Findley Davies assisted by performing an in-depth analysis of their retirement plan. Findley Davies recognized that several plan services and expense issues should be addressed. These issues included expensive plan operation, underperforming investments, unacceptable service levels, administrative errors, compliance issues, investment advisor not acting in a co-fiduciary capacity, limited understanding of the plan, and a lack of focus on retirement security.

These problems caused great strain on the Plan's investment rates of return, a dependence on the use of internal resources, IRS and Department of Labor penalties, and potential participant lawsuits. As a result, participants lacked confidence in the retirement plan benefit and the retirement committee was overwhelmed by the responsibility of selecting and offering quality investments.

Solution
During this engagement, Findley Davies conducted a review of all materials and held interviews with participants, the plan sponsor, and vendor representatives to clearly identify and document complete plan services and related expenses. Findley Davies reviewed the competitiveness of the product used to service the retirement plan, confirmed compliance with ERISA and fiduciary responsibilities, determined the competitiveness of participant and plan sponsor services through benchmarking with industry standards; and assisted with the search, evaluation, and selection of a Registered Investment Advisor.

Results
Based on the conclusions drawn from this analysis and recommendations made by Findley Davies, the health care system took action to revise their retirement plan by:
  Addressing underperforming, comparatively expensive fund offerings;
  Successfully executing a reduction in overall plan expenses; and
  Conducting a review of services and expenses provided by the servicing investment advisor and engaging an advisor to act on their behalf in a co-fiduciary capacity.

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