Top of Mind


Learning from PLANSONSOR's Plan Sponsor of the Year Finalists

Two of our clients, the University of Massachusetts and the Oklahoma State University and A&M System, were selected by PLANSPONSOR as 2017 Plan Sponsor of the Year finalists.  My colleague, Jeff Snyder, had the opportunity to discuss the initiatives that made them worthy of recognition on the national level. In this edition of Top of Mind, we’ll take a closer look at these interviews to determine what retirement plan sponsors can learn from the exemplary work of these two institutions.

First of all, let me say that I LOVE case studies. I can write all day about what I consider to be best-in-class practice for retirement plans, but none of that compares to the merits of a plan sponsor putting these practices into action, finding out what worked and what did not, and sharing the practical results with others who can then apply such practices to their own plans. For those of you who take the time to watch the interviews linked above in their entirety, I believe that it is time well spent.

When I watched the videos, I was struck by the commonality of the work by the two institutions. Below is some of the most significant aspects of their efforts:

  • Consolidate, Consolidate, Consolidate — It struck me that as a result of their initiatives, the two finalists’ retirement plans are nearly identical (23 investments at OSU, 24 investments at UMass; one recordkeeper at OSU, two recordkeepers but a single plan administrator at UMass), despite beginnings that were anything but consolidated (10 recordkeepers and 500+ investments at OSU and 50 recordkeepers and countless investments at UMass, with an initial transition to 6 recordkeepers and 500+ investments). And the benefits of these consolidations were apparent: higher participant engagement, significantly lower fees, and much less in-house administrative work. If you have more than one or two vendors, your plan is likely behind the times.
  • RFP is Not a Dirty Acronym — Despite the Request for Proposal (RFP) process being the kryptonite for most plan sponsors,  both case studies emphasized that it helps to achieve results. In fact, UMass conducted two RFPs in the last eight years, which is consistent with the best-in-class (but not always followed) frequency of every 3-5 years. If you can’t remember the last time your organization conducted a recordkeeping RFP, you should probably make plans to do so.
  • Branding is Critical — If your plan is better known among participants as the “Recordkeeper XYZ retirement plan,” participant engagement will suffer. UMass quickly discovered this when they inadvertently distributed a communication under a recordkeeper’s name instead of their own and many people simply did not open it!  OSU went so far as to create a “State of Independence” logo (outline of the state of Oklahoma with stars in it) for their communications campaign. Bottom line: don’t allow your vendor to brand your retirement plan.
  • There is No Such Thing as Over-Communication — From focus groups to town halls, group and one-on-one meetings to printed communication (UMass sent no less than FOUR major mailings out in a three-month window), both finalist plan sponsors shared the importance of communicating changes as frequently and by as many means as possible. To paraphrase a quote from the OSU interview, don’t say too little because you are worried about saying too much; if you say too little, the “grapevine” effect will take over.

Once again, I want to congratulate all of our PLANSPONSOR 2017 Plan Sponsor of the Year finalists (OSU, UMass and the State of Delaware) for their outstanding achievements in transforming their retirement plans to some of the best in the country. And for plan sponsors reading this, I hope that you too can become Plan Sponsor of the Year finalists as well!

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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