Deals & People December 15, 2010

Keane Spins Off Risk Management Firm

Executives from The Keane Organization, a provider of specialty compliance and risk management guidance, have created a spinoff company, Risk Compliance Performance Solutions, LLC.
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A news release said the new company will focus on expansion and growth opportunities in the retirement plan and risk management arenas.

Headquartered in the Philadelphia region, RCP Solutions will be comprised of the Retirement Services and the Business Risk Management Solutions divisions that were formerly part of The Keane Organization.

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The company said it will expand call center operations and technology on the retirement side and has plans to re-engineer its proprietary risk management solution.

Former executives of The Keane Organization will continue in leadership positions at RCP Solutions. Steven Grossman will serve as Chairman, Dorothy Flynn will serve as Chief Executive Officer, and Caroline Castagno will assume the role of Chief Operating Officer, according to the announcement.

The Markets December 15, 2010

403(b) Plans Overcoming Obstacles

A snapshot of 403(b) plan sponsors by the Profit Sharing/401k Council of America (PSCA) finds employers and employees are staying the course in the face of a difficult economic and regulatory climate.
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PSCA’s 403(b) Plan Response to Changing Conditions finds the majority of 403(b) plan sponsors have made no changes to their matching contribution (73.3%) or to their non-matching organization contribution (74.6%) in the last three years. Fourteen percent of 403(b) plan sponsors that offered a matching contribution on December 31, 2007, have suspended it, with 40% of those organizations already restoring it.   

Of organizations that offered a non-matching contribution on December 31, 2007, 12.5% suspended it, with 30.2% already restoring it, according to a summary of the survey results.  

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Plan sponsors took a variety of actions in the last year in response to regulatory and economic changes; 47.9% of organizations increased their employee education efforts, and 22.6% of organizations added investment advice for participants. Thirty percent of organizations changed the investment lineup, including 48% of large organizations.   

According to the survey results, 403(b) plan sponsors are also scrutinizing fees more closely, with 49.7% of respondents doing so (74% of large organizations). Less than half (46.6%) of organizations have an accountable committee responsible for reviewing fund performance and/or plan compliance (82% of large organizations).  

Organizations indicated that participants are continuing to contribute to their plans; 40% of organizations reported no change to plan participation rates, and 37.9% indicated an increase in plan participation. Only 14.5% of organizations indicated a decrease. However, 92% of organizations that suspended the matching contribution reported a decrease in plan participation, and 44% of plans that restored their matching contributions reported in increase in participation.  

In addition, employees contributing to the plan are maintaining deferral levels. More than 50% of plans reported no change to participant deferral rates, and 11.4% indicated an increase. Only 13.1% indicated a decrease. Similar to decreases in plan participation rates, more organizations that suspended the matching contribution indicated a decrease in participant deferral levels (57.9%) than those that made no change (12.4%).   

PSCA’s 403(b) Plan Response to Changing Conditions reflects responses from 599 not-for-profit organizations that currently sponsor a 403(b) plan. 

The survey report is at http://www.psca.org/PUBLICATIONS/SurveysData/tabid/77/Default.aspx. 

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