October 12, 2017

2014 RPAY – The Kieckhefer Group

Reported by

PA: How is your team/process/structure unique?

The Kieckhefer Group: Our backgrounds and extensive knowledge of different parts of the industry help our plan sponsors and participants. Rob Kieckhefer has a background in engineering design and statistical analysis, which he has used to create model portfolios, unique asset utilizations and retirement-readiness forecasts. At the recommendation of the Wisconsin department of the Treasury, Rob was appointed by the governor to sit on the College Education 529 Plan board, which has more than $3.5 billion in assets and 250,000 participants. After taking the 529 plan out for bid, selecting a new recordkeeper and a new low-cost investment menu, Rob has been actively involved in monitoring the plan.

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John Persa, a certified financial planner (CFP), is an attorney with more than 40 years of experience in the financial services industry. Prior to joining The Kieckhefer Group, John helped build a mutual fund business for a nonprofit organization. After the business grew into a multi-billion-dollar operation, John joined a prominent Milwaukee mutual fund firm and helped to establish its 401(k) business.

Janet Ganong was trained by the largest 401(k) plan providers on back-office processes, procedures and relationship management. She was later promoted to the field for participant education. She also is a member of the American Society of Pension Professionals & Actuaries (ASPPA) legislative affairs committee.

Our three key partners bring their diverse skills and backgrounds to the team and, in turn, bring the benefit of multidimensional knowledge and experience to plan sponsors and participants. Retirement plans are our primary focus. We have not used the 401(k) plans to build a wealth management practice. We have a cost-effective way for participants to save for retirement. Our plans offer some of the best and most diverse investments, at arguably the lowest costs available.

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

TKG: We have changed our conversation with the plan sponsor. Plan health has been measured by participation and deferral rates. Now we are enlisting the plan sponsors to take ownership for helping their participants become aware of retirement readiness and income replacement. Using retirement income calculators and other recordkeeping tools, we have taken our education program to new levels. Reaching a successful retirement means setting and attaining intermediate and long-term goals for participants. For the highly compensated, we introduced nonqualified deferred compensation (NQDC) plans and cash balance plans.

PA: How have you been able to lower fees for clients?

TKG: We help reduce fees primarily with four steps: First, while taking on the role of negotiator, we proactively challenge the recordkeeper over its fees and revenue sharing and proactively cap our own fees. Second, we regularly take plans out for bid in order to identify service improvements and fee reductions. Third, we use index funds and collective trusts. Fourth, we build custom portfolios, using the core investments, without additional fees.

When Rob served as moderator at the 2013 PLANADVISER National Conference (PANC) panel on the topic of low-cost 401(k) plans, he shared our approach and incorporated our four steps into the presentation.

PA: Describe any particularly noteworthy investment initiatives you have led with your customer base in the past 12 months.

TKG: We proactively initiated an in-depth review of target-date funds (TDFs). We established a process and 10-step procedure for analyzing and screening the funds. We condensed the 120-page report into an executive summary to use with our plan sponsors. To help other plan sponsors and advisers, we wrote an article for PLANSPONSOR magazine outlining the process, which was published in the NewsDash then picked up by Retirement Weekly and numerous other media outlets, including a feature article in USA Today’s Money section on January 7. As a result of our TDF screening process’ publicity, we have been in a position to actively encourage the use of index funds to reduce the internal expense ratios. We also have been a big proponent of using TDF collective trusts.

BUSINESS AT A GLANCE

Plan assets under advisement: $910 million

Median plan size (in assets): $5 million

Total plans under advisement: 51

Total participants in plans served: 10,000

October 12, 2017

2014 RPAY – Innovest Portfolio Solutions

Reported by

Dexter Reaves

PA: What is your mission statement?

Innovest Portfolio Solutions: Innovest delivers custom investment-related solutions through independent research and extensive expertise, with uncommon service for plan sponsors and fiduciaries. We equip plan sponsors to effectively manage fiduciary liability in the areas of investments, vendor management and cost control. We take a proactive, custom approach to help plan sponsors improve retirement outcomes for participants.

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

IPS: Participant retirement readiness is the biggest challenge facing plan sponsors today. The decisions they make in terms of investments, plan design and costs have significant influence on participants achieving a comfortable retirement.

We improved the potential for investment success of our plan sponsors’ participants by creating streamlined investment menus with low-cost investment products. We helped our plan sponsors design custom model portfolios to aid participants in asset allocation. We counseled our plan sponsors on plan design issues such as auto-enrollment and auto-increases to better prepare participants for retirement. We discussed modifying match formulas and enrollment forms to increase savings rates.

PA: Describe any particularly noteworthy investment initiatives you have led with your customer base in the past 12 months.

IPS: We consult to a $600 million public sector 457 plan. To mitigate participant confusion stemming from a multiple-provider structure and to reduce plan costs, the cornerstone of this complex engagement was frequent communication with the committee and participants.

We began our multifaceted approach by benchmarking the client’s defined contribution (DC) plan against DC plans of 11 similarly sized city plans on issues such as plan governance structures, investment structure and number of providers. We conducted 24 focus group meetings with participants to increase their grasp of the plan’s key objectives. To gain a better understanding of plan participants and employees, we created a survey focusing on their retirement goals. We facilitated a two-day retreat to educate the committee on fiduciary responsibility, plan fees and expenses, and investment structure.

We also developed a comprehensive request for proposals (RFP) with three pricing scenarios accounting for the current multiple provider structure. We crafted a detailed review of the responses, including key considerations for the committee. Throughout the process, we facilitated weekly/monthly meetings to communicate progress to the city council and participants. Ultimately, we consulted with the committee on its selection of a single provider for the plan.

In our work with the committee, we negotiated contractual agreements and educated it on fiduciary decisions regarding the differences between general fixed-account solutions and custom stable value solutions. We reviewed and suggested an education plan for participants to improve retirement readiness, which included quantitative goals and milestones to gauge success.

The committee may now consider implementing tools to help participants be better prepared for retirement that were not an option before, such as automatic enrollment and automatic increases. Through our efforts, not only have the overall plan quality and participant services improved, but participants will save more than $1.5 million in fees per year.

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

IPS: We are most proud that the participants of our plan sponsors have a better chance of a successful retirement. In a recent meeting with a retirement plan vendor with which we share 15 clients, we found that our plan sponsors’ participants have larger average account balances, contribute at a higher rate and are better diversified than the whole of the vendor’s client base.

We are gratified that plan sponsors who accept our plan design advice actually improve retirement readiness for their employees. We are proud that we will have helped plan sponsors reduce costs for their plan participants by more than $1.5 million this year.

BUSINESS AT A GLANCE

Plan assets under advisement: $5.2 billion

Median plan size (in assets): $25 million

Total plans under advisement: 98

Total participants in plans served: 100,000