your fiduciary responsibility and beyond sebc spring conference atlanta, ga 04.23.2013 401(k) plan...
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Your Fiduciary Responsibility and BeyondSEBC Spring ConferenceAtlanta, GA04.23.2013
401(k) Plan Benchmarking
Francie PurnellCorporate Director Retirement
PlansRepublic National Distributing Co.
Andrew MillerDirector Product Development
Principal Financial
Jason Chepenik, CFP, AIFManaging PartnerChepenik Financial
Agenda2
Plan Sponsor’s Perspective - Republic National Distributing Company (RNDC) Case Study
Provider’s Perspective - Principal Financial Consultant’s Perspective - Chepenik Financial Main Focus - Panel Discussion/Q&A
Plan Sponsor’s Perspective – RNDC Case Study
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RNDC Overview - Second largest alcohol distributor of premium wine and spirits in the U.S. with wholly owned operations in Alabama, Colorado, District of Columbia, Florida, Louisiana, Maryland, Mississippi, Nebraska, North Carolina, North Dakota, South Dakota, Texas, Virginia, and West Virginia. RNDC also operates in Arizona, Indiana, Kentucky, Ohio, Oklahoma, and South Carolina through venture partnerships.
RNDC is an active organization with seven acquisitions and two joint ventures over the last ten years.
Retirement plan offerings include two 401(k) plans, one defined benefit plan, and non-qualified plans.
Organizational structure and history can complicate plan management with different constituencies and involvement of geographic management.
Plan Sponsor’s Perspective –RNDC Case Study
4
RNDC 401(k) Plans Combined Overview Assets of roughly $375mm (up more than $110mm in last 36
months) Participants of roughly 6,900 Participation rate of just below 90% Deferral rate of just below 5.5% Auto-enroll with current discussions evolving on auto-increases
Last conversion/consolidation in October 2009
Most recent benchmarking of plan in June 2012 Proposals from the incumbent at contract renewal – improved pricing Third-party composites – helped establish reasonability Blind pricing from multiple providers – established current market Revisited pricing with the incumbent – minimized disruption to
participants and secured price concessions
Plan Sponsor’s Perspective – RNDC Case Study
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Move beyond plan benchmarking from 1.0 to version 2.0Benchmarking 1.0 – regulatory/compliance focus on what the plan sponsor “must do”
They have “popular plans” with roughly a 90% participation rate. They have “prudent” plans with sound investments and
“reasonable” expenses. Are these plans going to lead to successful retirement for
participants?
Benchmarking 2.0 – increased focus on positioning participants for financial success
Participant behavior - hardships and loans Participant retirement readiness Communication and education
Plan Provider’s Perspective – Principal Financial
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Take a holistic approachDefine what success means to you
Why are you benchmarking? Is your plan set up to recruit and retain employees and/or prepare
them for retirement? Ensure your needs are met and not being held to a rigid
benchmark.
It is more than just fees Look at services provided and offered. Look at range of investment options. Understand the team that is supporting the plan.
Plan Consultant’s Perspective – Chepenik Financial
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It is important to measure outcomes / efficacy of the planIncome replacement ratio – savings level
Total engagement / not necessarily participation – are they getting it
Financial wellness – or happy employees, leads to loyalty and productivity
Relevancy – discussion should be relevant to situation and especially to the employees
Utility – use the information to make decisions
Thank you
Francie PurnellCorporate Director Retirement
PlansRepublic National Distributing
Co.One National Drive, SW
Atlanta, GA 30336404-472-2294
Andrew MillerDirector Product Development
Principal Financial711 High Street
Des Moines, IA 50392 515-235-1020
Jason Chepenik, CFP, AIFManaging PartnerChepenik Financial
1010 Orange AvenueWinter Park, FL 32789