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PLAN SPONSOR OF THE YEAR Finalists

Public DC

The State of Delaware

Ken Simpler

TOTAL PLAN ASSETS/PARTICIPANTS: $629.1 million with Voya, plus approximately $300 million with legacy vendors/32,731

PARTICIPATION RATE: 37% blended average for the 403(b) and the 457; 401(a) participation rate unavailable

AVERAGE DEFERRAL RATE: 4.81%

Last year, the State of Delaware consolidated its three defined contribution (DC) plans—a 403(b), a 457(b) and a 401(a)—with one recordkeeper. Previously, the three plans had a total of 15 recordkeepers between them, and that posed challenges. Among the three plans, for example, participants had thousands of investment options, State of Delaware Treasurer Ken Simpler says.

The state’s Deferred Compensation Council decided, in 2015, to hire adviser Cammack Retirement Group Inc. to do a needs assessment, evaluate investment options, and assist with a recordkeeper request for proposals (RFP) for the three plans. “The 457 plan had not been put out to bid since its inception, in 1999, and the council also wanted to explore possible vendor consolidation in the 403(b) plan,” Simpler says. Further, “the council was interested in making the administration of the plans more efficient.”

The RFP went out in August 2015. In addition to Voya Financial, ultimate winner of the business, eight other recordkeepers responded. The selection committee reviewed all proposals and scored them based on established goals and evaluation criteria set out in the RFP, Simpler says. “Greatest weight was placed on improvements to the employee experience, education and outreach capabilities of the new provider, [as well as fee] savings to participants,” he says.

Voya’s selection was announced last May, and the plans went live with the new recordkeeper in mid-September—a mere four months for transitioning 30,000 participant accounts and more than $600 million in assets, says John Meyer, director, contributions and plan management at the Office of State Treasurer in Dover, Delaware.

“The biggest challenges during the planning phase of the transition were assembling the project teams and communicating to all the respective parties,” Meyer says. “Due to the condensed time frame, the planning and the implementation phases of the transition overlapped. Our biggest challenges [there] were communicating changes with participants over the typically quieter summer months and reaching our retired employees who remain as participants in the plans.”

The move has meant that participants now have a streamlined, open-architecture investment menu with three tiers. That menu consists of the American Funds Target Date Retirement Series, in tier one; 14 core funds and Morningstar managed accounts that utilize those 14 core funds, in tier two; and a self-directed brokerage option, in tier three.

Participants also now pay all fees on an asset basis and receive statements with investment, recordkeeping and other administrative charges broken out individually. Beyond that, the recordkeeper-change improved participants’ service options, which now include a redesigned custom website, mobile capability and access to four full-time, dedicated Voya representatives available on-site every workday for one-on-one meetings.

To help participants understand the changes beforehand, for six weeks the transition team held a total of 85 meetings across the state. Meyer says these aimed “to communicate the transition time frame, to educate participants about the new three-tiered investment structure, and to encourage one-on-one meetings with Voya advisers.” —Judy Ward

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