October 11, 2017

2016 RPAY – Graystone Consulting – The Parks Group

Reported by

PLANADVISER: Tell us about your practice and how you and your team members got into advising retirement plans.
The Parks Group: For more than three decades, our team has focused on bringing comprehensive consulting services to the retirement plan marketplace. Over the course of numerous market cycles, significant market corrections, and important changes to the legislative landscape, our institutional consulting team has successfully navigated these challenges in the focused and passionate effort to help more plan participants retire successfully. We fully realize that our valued client relationships allow us to positively impact the quality of retirement for thousands of 401(k) plan participants, and through our comprehensive fiduciary process have helped protect the interests of many plan sponsors as they seek to address their fiduciary duties.

Tom Parks, founder of The Parks Group, began his journey in 1981 at the institutional consulting group of EF Hutton. Through many organizational changes, corporate mergers and an array of corporate cultures, Tom’s singular focus on helping employees suitably prepare for retirement has remained unchanged. He has, however, embraced change in the marketplace and was one of the first adopters of encouraging plan participants to consider professionally managed portfolios within their investment menus.

PA: What is your mission statement?
PG: The Parks Group at Graystone Consulting is passionate about helping plan sponsors maximize their fiduciary protection. Our mission—through the development of a prudent fiduciary process—is to provide our institutional clientele with fiduciary protection. This is accomplished by providing plan sponsors with a “paper trail” of decision‐making designed to help address the considerable challenges posed by the mandates of the Employee Retirement Income Security Act (ERISA).

To that end, we work diligently with our clients to develop an investment process that is structured to help protect the plan sponsor while helping guide plan participants towards successful retirement outcomes.

PA: Describe any particularly noteworthy initiatives you have led with your customer base in the past 12 months (investment, education, plan design or communication).
PG: The Parks Group at Graystone Consulting focuses its efforts to include putting forth plan design recommendations designed to have “inertia” work to the benefit of the individual participant. Over the past 12 months these recommendations / initiatives have included:

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

  • Implementing automatic enrollment
  • Establishing higher default rates (i.e. moving from 3% to 6%)
  • “Stretching the match” (redesigning the match formula to encourage increased employee savings)
  • Implementing auto‐escalation
  • Increasing the auto‐escalation rate from 1% per year to 2%
  • Raising the contribution maximum to 10%, 12% or 15%
  • Instituting re‐enrollment procedures, which have dramatically improved plan success measures
  • Changing the “information architecture” for plans (i.e. listing long‐term performance first)
  • Changing the qualified default investment alternatives (QDIAs) to include only automatically diversified, professionally managed portfolios

These plan design initiatives have resulted in significantly improved participant success measures for many of our 401(k) clients.

PA: Describe a difficult client relationship issue, and how it was resolved.
PG: Our work in the retirement plan marketplace has been particularly effective with several new clients. Near the end of 2014, our team began working with a new client in the health care industry that maintained five defined contribution plans. Our team had multiple interactions with the plan’s Recordkeeper as well as with the plan sponsor’s retirement plan committee and its board of directors.

The following objectives were accomplished over a nine‐month period:

  • Redrafted multiple Investment Policy Statements (IPS) to re‐assign committee responsibilities, streamline the decision‐making process and align the IPS with ongoing quarterly investment monitoring criteria.
  • Conducted a full investment due-diligence process on the investment menus. The result was one simplified investment menu consistent across all five plans that reduced the number of investment choices offered (while still offering appropriate diversification opportunities) and was more participant friendly.
  • Followed a thorough due-diligence process to select a target-date series that is appropriate based on the goals and objectives of the combined plans and specific employee demographics.
  • Changed the QDIA  to align the plans with current regulations.
  • Utilized a Fiduciary Benchmarks report to identify recordkeeping cost savings opportunities. The recordkeeper subsequently lowered its fees by 0.11%, which amounted to roughly $300,000 annually in dollar terms.
  • Worked with the recordkeeper to uncover an additional $400,000 in revenue to help offset future plan costs.

PA: As a retirement plan adviser, what do you take the most pride in?
PG: The process we have refined over many years of experience supports plan sponsors in fulfilling the extensive responsibilities of a fiduciary, maximizing their resources and—most importantly—helping their employees retire on time, successfully and with dignity.

PA: What benchmarks do you use to measure plan and client success? How do you react to clients or prospects who don’t share your goals for their retirement plan?
PG: On an annual basis, The Parks Group performs a fiduciary benchmark analysis for each client to assess their plan’s fees and participant success measures. Among others, we compare the plan’s participation rate, contribution rates for non‐highly and highly compensated employees, percentage of participants maximizing the company match and percentage of participants invested in automatically diversified options to a benchmark group comprised of similarly‐sized plans.

In addition, we look to the average tenure of our consulting relationships as a way to demonstrate the quality of the services we provide. We are pleased to report that the tenure of our average institutional client relationship is more than 10 years, with several relationships dating back more than 25 years.

BUSINESS AT A GLANCE

LOCATION: Milwaukee, Wisconsin
TOTAL ASSETS UNDER ADVISEMENT: $7.6 billion
MEDIAN PLAN SIZE (IN ASSETS): $75 million
TOTAL PLANS UNDER ADMINISTRATION: 55
October 11, 2017

2016 RPAY – MHK Retirement Partners

Reported by

PLANADVISER: How is your team/process/structure unique? How has it evolved?
MHK Retirement Partners: What makes MHK Retirement Partners unique is our team-based approach to servicing our clients, from the boardroom to the break room in a proactive, data-driven process that goes far beyond the basics of funds, fees, and fiduciary responsibilities. Our structure allows for personal and individual interaction with every participant to help them achieve retirement reediness.

What sets MHK apart is our unwavering commitment to retirement plan participants. MHK is a team that truly cares about participants’ ability to attain their retirement goals by driving conversations towards retirement readiness and focusing on steps participants can take today. Through the creation and utilization of our propriety CEFEX-certified retirement plan management software solution, Standard of (k)are™, we are not only able to help participants build and implement an action plan, but also use the information from those employee meetings to facilitate decisions in the boardroom.

Beyond our persistent commitment to plan participants, we have a large focus on educating plan sponsors and helping them to understand their fiduciary responsibilities and associated liabilities.  In addition to education provided to fiduciaries at regularly scheduled plan reviews, we host fiduciary training focus groups for our plan sponsor clients throughout the year.  Coupled with a Fiduciary Training Program and implementation of industry best practices, we are able to educate and empower plan sponsors with knowledge to be better fiduciaries to their plan. We believe that our unique way of servicing clients enables them to recognize their responsibilities and be better equipped to understand how to implement a prudent processes to manage their liabilities and ultimately serve their fiduciary duties more effectively.

PA: What have you done in the past year to improve participants’ retirement readiness?
MHK: Retirement readiness is our mission. As a part of our standard process, we implement design options including auto enrollment and automatic increase features, but feel that these items fall short to achieving retirement readiness.

At MHK Retirement Partners, we have moved beyond only focusing on increasing participation and deferral rates to focusing on the necessity of retirement plans to provide income replacement in retirement. Through Standard of (k)are™ we are able to not only measure, but track the retirement readiness of every single participant with whom we meet. Over the past year, we have captured a true picture of retirement readiness for over 3,400 participants we’ve met with one-on-one. Through Standard of (k)are™, MHK is able to measure and track the retirement readiness of the participants at the individual level and then report back to the committee with a summarized report of how many of their employees are expected to have sufficient savings to replace income to age 80, 90, 100, and beyond.

With Standard of (k)are™, MHK has been able to define and standardize a process around retirement readiness that has resulted in efficiencies allowing us to reach even more individuals. We have increased participant retirement preparedness in our plans through regularly scheduled onsite group education meetings, one-on-one meetings between advisrrs and participants and MHK’s virtual Participant Outreach Program.

After seeing a glimpse of the retirement readiness for their employee population, sponsors become more committed to understanding the goals required to improve retirement readiness. Drawing upon these goals outlined in an Education Policy Statement, we develop a custom education program driven toward our clients’ goals and education objectives. We also focus on showing the participant, through the calculator, the benefit of a company match and the added years of income replacement in retirement because of the company’s contribution to their account. This stresses the importance of taking full advantage of the match, and it helps cultivate an appreciation for the company contribution.

Through Standard of (k)are™ we are able to measure, track, and monitor whether the goals and objectives outlined in the Education Policy Statement are being met, and more importantly,  improve the retirement readiness of the employees.

Our most recent example of this was pre Standard of (k)are™, when we struggled to meet with a participant population in a one-on-one settings. With the implementation of the program, we were able to provide the sponsor a small sample of their employees’ retirement readiness, which in turn created a desire for the plan fiduciaries to understand the retirement readiness for their population as a whole.  Subsequently, the committee implemented an Education Policy Statement that included mandatory one-on-one meetings for all employees. The results were an outstanding improvement for the participants’ retirement readiness. We were able to increase the average deferral rate from 5.1% to 8.0% and now 292 participants have a better understanding of their current retirement outlook and more importantly what they need to do to continue to improve their retirement readiness.

PA: As a retirement plan adviser, what do you take the most pride in?
MHK: At MHK, we take great pride in exceeding the expectations of plan sponsors and participations. We know our hard work is paying off when we see plan sponsors embracing their fiduciary duties and considering participants’ best interests in every decision that is made. We celebrate participants setting themselves on the path to retirement readiness with concrete goals and subsequent action. We believe we set the standard for how retirement plans should be serviced.

PA: What benchmarks do you use to measure plan and client success? How do you react to clients or prospects who don’t share your goals for their retirement plan?
MHK: While MHK does monitor the traditional plan success metrics such as participation and deferral rates, we have elevated beyond these simple metrics to measure and track the retirement readiness of each individual employee. We feel that the old metrics are often used because the industry views those as the only way to approximate whether an employee population is “on track” for retirement.

Through Standard of (k)are’s™ Avatar feature, we are also able to “personify the plan” to the sponsor by presenting the average age, target retirement age, deferral, outside savings, retirement income needs, plan dependency, risk tolerance, investment allocation, and the age at which retirement savings would run out.  It is this level of data that helps us truly define the benchmarks to measure plan and client success.

Some of the most challenging relationships are those with plan sponsors that do not have a good understanding of their fiduciary duties. Our standardized investment committee process through Standard of (k)are™ facilitates fiduciary best practices while simultaneously educating the committee members so we feel our clients do share our goals and vision through a strong partnership. If a company’s committee does not share our goal of implementing best-practice fiduciary processes, and doing everything we can to promote participants’ understanding and retirement readiness, there cannot be a partnership.

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

BUSINESS AT A GLANCE

LOCATION: Middleton, Wisconsin
TOTAL PLAN ASSETS UNDER ADVISEMENT: $450 million
MEDIAN PLAN SIZE (IN ASSETS): $3.8 million
TOTAL PLANS UNDER ADMINISTRATION: 72

«