Case Study #1: Local Non-Profit Organization

Board asked for guidance regarding:

  • Starting a new plan
  • Employer contribution amount
  • Helping Employees: average age of staff was 32, tech savvy, not investment savvy

How we found the solutions:

Plan design and employer contribution amount

Working within their overall budget constraints, we calculated several options for contributing to employee accounts as across-the-board contribution and then in the form of matching.  Considerations included average turnover, maximum and minimum participation, and coordinating with other benefit costs. Some Board members preferred awarding employees a contribution without asking them to contribute while others preferred a matching arrangement to better engage employees with their retirement. We arrived at a compromise of an employer contribution for every employee with small match on top. The formula we chose helped them qualify for safe harbor plan design as well, so they could avoid nondiscrimination testing.

Deciding on vendors

The Board requested a few vendors to be included in the RFP and allowed us to go to any others we thought would be appropriate. Top priorities were keeping fees low, favorable participant experience, fiduciary support tools, and allowing the organization to pay a chunk of the fees. Last, in order to reduce admin burden on the staff, we looked at solutions that would coordinate with their payroll system to reduce the amount of manual entry.  Luckily, their payroll provider had a payroll bridge file to many providers. We narrowed the field and conducted due diligence on the final four options, then brought three to the Board for consideration, outlining the strengths and weaknesses of each. The Board opted for a local third party administrator to provide hands-on service, and a recordkeeper with an excellent participant experience as well as options for low cost investments. Finally, we negotiated the pricing with the winner and assisted with the plan set-up.

Helping Employees

We constructed the line-up with options for invest-for-me, help-me-invest, and invest-on-my-own. Participants also enjoyed the one-on-one meetings where they were able to ask questions about their situation in a private setting and learn how to use online tools.

Ongoing, we provide assistance overseeing their plan by reviewing a quarterly agenda that covers different aspects of their plan, monitoring the investments according to their investment policy statement, and helping their employees better understand how to use their plan.