Defined Contribution in Review

Industry developments over the last 90 days

3Q18

Quarterly Highlights
A summary of plans and sponsors making the news

Quarterly Highlights

A summary of plans and sponsors making the news

PLANSPONSOR Names its 2018 Plan Sponsors of the Year

PLANSPONSOR announced its Plan Sponsors of the Year, a program that recognizes retirement plan sponsors that show a commitment to their participants’ financial health and retirement success. Common themes included:

Participant Education

PolyQuest, Inc., Hendrick Motorsports and Boston Medical Center were highlighted for their comprehensive employee education programs.

Auto Features

United Hardware Distributing Company and Harris Teeter were recognized for implementation of auto-enrollment and auto-escalation programs.

Employer Match

Nu Skin Enterprises and the Illinois Health and Hospital Association enhanced their employer match strategies to help participants.

Learn more about these awards in the full 3Q18 edition of the 

DC in Review Guide.

Medical Providers Enhance Plan Design for More
Retirement Savings

Several hospital and medical centers have been in the news for modernizing plan design to help participants. Following the merger of two health care systems to create the Illinois Health and Hospital Association, officials implemented a strategy to harmonize and modernize the retirement plan benefits. After learning that comparable U.S. health care organizations averaged 7.6% in employer contributions nationally and 8.7% in the Chicago area, the organization decided to target an 8.5% employer contribution consisting of a 2.5% non-elective contribution plus a 6% match.

The plan then reduced the number of core menu options to eight, introduced a new target-date fund default and reduced asset-weighted investment costs to 15 basis points. Finally, a new investment committee was established that included a charter, training and written acknowledgment that each member understands his or her fiduciary responsibilities. The plan would then document its work throughout the year.

In another area of the country, Boston Medical Center took steps to ensure their employees are receiving a comprehensive benefit offering. The nonprofit teaching hospital partnered with several organizations for this
purpose, including:

  • An online lending service that consolidates and refinances student loans
  • The Massachusetts Affordable Housing Alliance, which offers a first-time home buying program
  • The Boston Home Center, a division of the mayor’s office, which educates employees about mortgage programs and how to qualify for favorable terms
  • A nonprofit group that helps employees improve their credit score

Also, Boston Medical Center's retirement plan now encourages retirees to remain in the plan and has achieved a 94% retention rate among terminated employees in the last year. The investment committee has established a retirement income replacement ratio of 80%, including Social Security, and approximately 90% of Boston Medical Center participants are on track to meet this target.

Landscape Structures Inc. Outsources Investment
Oversight to Fiduciary

Landscape Structures Inc., a Delano, Minnesota-based playground product manufacturer, has hired a 3(38) advisor to select and monitor the plan’s investment options. The plan now has an astounding participation rate of 95%, and the average deferral is 7.64%.
The advisor constructed five risk-based allocation models to serve as the plan’s default option; the models use the investment managers from the plan’s core lineup
At a participant level, the advisor is available to provide individualized fiduciary advice for a flat fee
Landscape Structures pays for the advisory and record-keeping fees in addition to offering a 50% match on 8% plus an employee stock ownership plan (ESOP) contribution
The advisor constructed five risk-based allocation models to serve as the plan’s default option; the models use the investment managers from the plan’s core lineup
At a participant level, the advisor is available to provide individualized fiduciary advice for a flat fee
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The advisor constructed five risk-based allocation models to serve as the plan’s default option; the models use the investment managers from the plan’s core lineup
At a participant level, the advisor is available to provide individualized fiduciary advice for a flat fee
Landscape Structures pays for the advisory and record-keeping fees in addition to offering a 50% match on 8% plus an employee stock ownership plan (ESOP) contribution
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