PA: What have you done in the past year to improve participants’ retirement readiness?

Graystone Consulting: Aside from reducing fees, conducting financial planning meetings, helping clients select providers to enhance their plan, offering personalized financial plans for our participants and working with providers to build customized education campaigns, we made a commitment to balance every investment committee meeting with plan management reports from the provider. This focus redirected the conversation in each committee meeting from mostly investment returns to the overall success of their plan and their employees’ retirement readiness. 

In several cases, we worked with actuaries to “optimize” the plan design and increase the retirement readiness scores of participants. We found this to be very effective, almost a way to automate retirement readiness and make it easier for the participants. Essentially, projected income replacement ratios were calculated based upon various plan designs. In one case, a safe harbor match was initiated with nonelective contributions, auto-enrollment, a contribution accelerator and target-date options—all of which were benchmarked versus their peer group. At the end of the day, the company selected the approach with the highest replacement ratios, and the participation rate went from 47% to 98.76%.

Finally, we discussed the idea of re-enrollment with each client, and many organizations took our advice to automatically enroll all eligible employees and do a re-enrollment into target-date funds (TDFs), to potentially significantly improve asset allocations and investment outcomes.

PA: Describe a difficult client relationship issue and how it was resolved.

GC: It seems as though turnover among human resource (HR) departments and investment committees is at an all-time high. Of course, it is difficult to maintain consistency, keep projects moving forward and bring new members up to speed during this type of change. To combat this issue, we maintain committee meeting minutes for most of our clients—unusual in this industry; keep an up-to-date fiduciary audit file, including plan documents, performance reviews, plan management reports, etc.; and also have created a “plan milestones” one-page history of the plan. Instead of discussing the same issues over and over, we use the milestones piece to educate new committee members.

PA: As a retirement plan adviser, what do you take the most pride in?

GC: One of our newest clients is a well-known school with roots going back to 1831. We helped it consolidate providers, streamline and enhance the investment menu, lower total plan costs, build a fiduciary process, and offer many additional tools and services for the employees. During our individual meetings, we had the opportunity to meet many educators with 20, 30, 40 or even 50 years of tenure with the institution. Without a doubt, spending time with these employees, helping them make good decisions and helping them prepare for retirement is what we love to do.

PA: What changes to your practice or service model are you planning for 2015?

GC: First of all, we added a new individual to our team who has a strong human resources (HR) and finance background. Not only does she have her MBA, she also built the benefit plans for several startups as well as established organizations. 

Next, in anticipation of the pending fiduciary redefinition efforts in Congress, we slightly redesigned our group to focus exclusively on our fiduciary services. Our two partners who focus on more transactional retail relationships formed their own group, and our team will work on a strictly advisory basis. 

We also completely redesigned our reporting process to always include provider data, participant success measures, retirement readiness scores and other metrics such as average deferral rates and participation levels. We are also streamlining the process to reduce the copies printed and the “thickness” of the investment analysis through PDFs sent in advance to committees.

BUSINESS AT A GLANCE

PLAN ASSETS UNDER ADVISEMENT: $2.9 billion

MEDIAN PLAN SIZE (IN ASSETS): $25 million

TOTAL PLANS UNDER ADVISEMENT: 65

TOTAL PARTICIPANTS IN PLANS SERVED: 100,000