A Plan Sponsor offers three different retirement programs to their employees and wanted to minimize their fiduciary risk by identifying plan defects from an investment, expense and administrative standpoint.
The Plan Sponsor was not clear on the services being provided by each vendor on their retirement plans and was concerned about their fiduciary risk and responsibilities.
Marsh & McLennan Agency formerly Benefits Resource Group (“Marsh & McLennan Agency formerly Benefits Resource Group”) analyzed each retirement plan offered by the plan sponsor in order to identify and minimize their fiduciary risk and discovered the following:
- Plan sponsor administrative inconsistencies with payroll and terminated employees.
- Plan sponsor risk included multiple layered expenses and varied expenses along with varied fund performances in each plan.
|Investments/Expenses||Plan 1||Plan 2||Plan 3|
|Average Investment Expense||.54%||.95%||.88%|
|Fund Performance Analysis||Plan 1||Plan 2||Plan 3|
|Number of funds available||21||32||94|
|Average Peer Percentile of Funds (1=best, 100=worst)||49 1-yr
- Marsh & McLennan Agency formerly Benefits Resource Group alerted company on several processes that the vendors were not completing and mitigated future risk by identifying all fiduciaries and providing education on their obligations.
- Marsh & McLennan Agency formerly Benefits Resource Group recommended an investment committee be established for the plan.
- Marsh & McLennan Agency formerly Benefits Resource Group recommended implementing an Investment Policy Statement.
- Documented communication process to participants regarding the various share class charges and associated surrender periods.
- Marsh & McLennan Agency formerly Benefits Resource Group recommended a consolidation to a single vendor.
- Potential savings to participants:
- Year 1 $47,415
- Year 5 $272,671
- Year 10 $665,107