403(b) Curriculum Library


Case Study: College Streamlines and Simplifies Retirement Plan Offering

With a finger on the pulse of their retirement plan participants, Saint Anselm College in Manchester, New Hampshire, realized the need to streamline their $80.5M* retirement plan to help participants focus on the important aspects of retirement readiness.

Realizing that participants were struggling with making a decision between the plan’s two recordkeepers, rather than focusing on enrolling in the plan itself, the college made the decision to simplify. To do so, they conducted a competitive request for proposal (RFP) process, during which they realized that their plan could be managed more cost-effectively, while also taking advantage of operational and technological efficiencies, and expanded services and features (such as outsourcing of salary deferral changes, implementation of a Roth feature, and improved communication and education).

Saint Anselm also sought assurance that the plan had appropriate oversight of investment performance and fees. Equally as important, they wanted to improve the participant experience by providing a simplified plan design that offers a streamlined, “best-in-class,” tiered investment lineup with state-of-the-art recordkeeping services, fund specific investment advice, and continued education to better prepare their participants for retirement.

The Results

After the selection and implementation of a single recordkeeper, Saint Anselm streamlined the investment array from over 70 investments to just 22. The new investment offering provides plan participants access to an optimized lineup of both actively managed and passively managed investment options, including a small array of low cost in-plan annuity options, providing a source of lifetime income in retirement. The College also elected to implement a Qualified Default Investment Alternative (QDIA) option, selecting a target date fund for those participants who did not make investment decisions.

Administrative costs for the plan were reduced by about $90,000 annually, and the savings will continue to increase as plan assets grow. In addition to the cost savings for the plan, the College implemented fee levelization to assure that all participants pay the same level of administrative fees, regardless of their investment selections.

To ensure that all participants understood the changes to the plan, a thorough communication and education program, with both group and individual meetings, was enacted. The new recordkeeper conducted 14 days of individual one-on-one meetings, as well as multiple days of workshops and information tables, which resulted in additional meetings with participants. At these meetings, participants received information in a variety of formats that was geared toward the goals of the plan, such as increasing savings rates, promoting investment diversification, positioning employees for a smooth transition to retirement, and improving retirement readiness. Ultimately, these efforts led to increased employee deferral rates (from 7.71% to 8.62%), with 50 employees increasing their savings rates during the transition (almost 12% of the population) - a significant accomplishment given the already strong deferral rates. Additionally, the participation rate for elective deferrals stands at over 95% and the average participant balance is in excess of $103,000.

Finally, Saint Anselm voluntarily converted from a church plan to an ERISA plan, following all fiduciary best practices.

Conclusion

Saint Anselm College’s commitment to providing a valuable retirement plan benefit for their participants was recently recognized by PLANSPONSOR, and the College was selected as a finalist for the 2018 Plan Sponsor of the Year in the Nonprofit <$100M category.


*The Saint Anselm College retirement plan had $80,517,643 in assets as of 6/30/2018

Note: Plan results are dependent on each plan’s circumstances and may not be replicated for all plans

Note: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.

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