Case Study #4: Construction Company Takes Care of Employees
A custom builder with a family culture transferred their 401k to a new provider and sought assistance for:
- Transitioning to their new 401k vendor
- Educating and re-engaging participants
- Reinstating their match
- Assisting the CFO with streamlining processes
How we developed the solution:
As part of cost-saving measures and to improve service, the client first switched vendors and then sought an advisor. The advisor was hired to help employees get re-engaged with their 401k plan, to provide strategic guidance for reinstating the company match, and to help reduce the CFO's workload.
First, we provided project management support for the transition, helping to iron out details, setting expectations, and intervening where necessary to make the process easier for the CFO as well as the employees. We also assisted with the content of participant notices, keeping employees informed about the timeline of the transition, and helping to streamline decisions based on our knowledge of their company and how the plan could best function.
Since the company has a tradition of treating employees like family, they felt strongly about making sure employees were set on the right path to being able to retire when they wanted to. We implemented automatic enrollment and spent significant time with all employees after the transition making sure their transferred assets were allocated to their investment preferences and risk tolerances. We also performed a gap analysis, showing an employee the gap between the amount they were on track to achieve in retirement versus what they hoped to have, and answered questions about how to better increase likelihood of reaching the retirement they desire. Last, we made sure they were aware and took advantage of the option to automatically increase their deferral rates over time.
When it was time to reinstate their match after the economy started to recover, we planned a match that fit within their company budget and was an easy formula for employees to understand. We rolled out the good news at their end-of-year company meeting with deferral change worksheets and payroll calculator estimates at the ready so they could easily see what increasing to get the match would cost them, what the company match amount would be, and increase to the match rate.
The CFO was buried in work. The housing industry was slowly rebounding, but their company was known for their excellent reputation, customer service, and quality product. They faced higher demand than most in their area and had low inventory of new homes. It was important to help her decipher what was absolutely necessary versus nice-to-have in putting together her prudent processes so she could turn her attention back to working on new land deals. Being sensitive to her time, we worked with her staff for them to take some of the easier tasks and constructed a quarterly service plan with her to make sure we systematically covered important aspects of the plan throughout the year in advance of deadlines.
From here, we will continue to help with the plan ongoing by overseeing the investments, assisting with meeting fiduciary responsibilities, educating participants, advocating for the plan with service vendors, and being the CFO’s plan quarterback.