We received an RFP from a manufacturing plant owned by a foreign based company. Their HR team had totally turned over in the midst of our proposal opportunity. They were being serviced by a name brand mutual fund, but it had no advisor. They had mostly target date funds, low participation and low contribution rates.
We redesigned the plan to include auto enrollment and auto escalation and increased the matching contribution. We replaced the basic fund lineup with asset allocation models designed by an advisor, and showed participants how to become more retirement ready. A Blackrock service, called Future in Focus, played an important role also. As a result of our efforts, we won this $46 million plan.
Best Practice Learned
- Brand name solutions don’t always include the proper plan design, especially when they are not local to the plan sponsor, as we were.
- Advisors can generally provide better investment alternatives, including asset allocation models, than target date funds.