A medical practice in Opelika, Alabama

80 Participants, 18 physicians; 401k/PSP

At first they thought their plan was in great shape and were looking for a lower cost provider.

Participation in the plan was below 50%, but they didn’t see that as a problem. Their thoughts were that the cause was from the educational level and intelligence of their employees, and had NOTHING TO DO with the plan itself. Upon an in-depth review of every facet of the plan, there were three things wrong:

• First, they had 19 fund options in the plan! Even worse, 12 of those options were of the same Large Cap Value category. This created confusion and a sense of futility in the employees to assess which investments made sense. It seems that when a fund didn’t perform—at least the way they thought it should—they simply called up their broker to add another fund. They had never set up guidelines for an “exit strategy” out of the unfavorable fund option
  
  
• Second, their broker only came out to enroll newly eligibles. No consistent education program was in place, and
  
  
• Third, the plan had a tortuous vesting schedule, and was out of date with current needs.

Our solutions: we came in and advised the client to first create an Investment Policy Statement, and then stick to its guidelines with periodic oversight; eliminate all of the redundancy of the investments; and finally, force the broker to commit to regular “re-enrollment/education” meetings for the employees.

A specialty medical practice in Ocala, Florida

45 participants, 15 cardiologist/cardio-anesthesiologists; 401k/PSP

Plan had changed providers 5 years previous, into an annuity-based platform from one that was mutual fund-based. Poor deferrals.

An in-depth analysis discovered:

• There were too many funds available, hitting virtually every investment category (15)
  
  
• The broker never showed up to help employees
  
  
• There was no fiduciary oversight of the plan nor the investment options
  
  
• Investment Allocations of the employees was NOT in line with age/retirement targets of the employees (i.e., young employees with 100% of the funds in the money market, etc.)

Our solutions: we designed a “Retirement Plan” committee of select physicians and staff, along with an “Investment Management” subcommittee for investment oversight. We created the template for the Investment Policy Statement and set forth guidelines for benchmarking the funds. We also set a mandate for regular education/enrollment meetings. We also created the template showing them how to compare the performances of the sample menus of five providers that quoted on the plan.

A photographic supply company in Atlanta, Georgia

10 employees, one owner; 401k/PSP

This plan sponsor had been neglected by a former friend who also was their agent of record on the plan. Highly educated employee universe, top to bottom. Yet very low deferral percentages. Plan was “Top-Heavy”.

An in-depth analysis showed:

• No employee meetings about the plan took place since it’s inception
  
  
• The plan utilized an inferior, expensive and much out-dated investment methodology, utilizing individual annuities for each employee
  
  
• Plan design revealed several out-dated ideologies that thwarted participation (no portability; 5-year cliff vesting, etc.)

Our solutions: First, we negotiated with the current service provider to move this small plan into a single group variable annuity platform, with NO penalties for annuity termination. Investment core menu will also be limited to no more than 7 or 8 choices. Investment Fiduciary services instituted: Creation of Retirement Plan Committee/Investment Management subcommittee; Creation of Investment Policy Statement; hard-scheduled quarterly investment review meetings; re-aligning and introduction of certain new plan provisions; named The 401k Advisory Group, Inc. as the “Investment Advisor” to the plan, providing 401k investment advice.