SURVEY SAYS: Managing Multiple Retirement Plans

Last week, I asked NewsDash readers, “Does your firm, or do have clients that, sponsor multiple retirement plans?” I also asked about certain aspects of plan administration.

More than three-quarters (75.5%) of respondents serve in a plan sponsor role, while 21.2% serve as TPAs/recordkeepers/investment managers, and 3% are CPAs.

The vast majority (90.9%) of responding readers sponsor, or have clients that sponsor, multiple retirement plans. Of those that do, 22.6% have separate personnel working for the plan sponsor that handle each plan type, while 74.2% do not, and 3.2% do not know.

About one-quarter (25.8%) of respondents that sponsor multiple plans or have clients that sponsor multiple plans reported there are separate committees for each plan, while 64.5% reported there are not, and 9.7% do not know. Recordkeeping and administration are bundled for each plan with one plan provider, according to 48.4% of respondents, and are not bundled, according to 51.6%.

One-quarter (25.8%) of responding readers said participant education/communication is combined for each plan, while two-thirds (67.7%) said it is not, and 6.5% do not know.

Verbatim comments from readers clearly show managing multiple retirement plans is complicated, with one reader summing it up as, “If our plans had Facebook accounts, each relationship status would be ‘It’s complicated.’” But, a few expressed confidence in their ability to handle it; “Plan sponsors have been multi-tasking since way before multi-tasking was ‘cool.’” A couple shared information about how they handle education and committees. Editor’s Choice goes to the reader who said: “Yep, I do and do it quite well…despite having one hand tied behind my back by the plague of overwhelmingly odious regulations and the scourge of auditors anally focused on the barn door rather than where the horse is heading.”

Verbatim 

As a Human Resources Outsourcing firm, we have many clients that have multiple types of retirement plans. Unfortunately, a lot of them have trouble figuring out one plan let alone two.

Most of our clients with multiple plans offer a DC/DB combination. However, we have a control group with two separate DC plans who share a common fiduciary. Based on my anecdotal experience with her, this is a function that shouldn't be combined, as she has difficulty tracking everything involved.

We have multiple DB plan formulas for our Plan Sponsors. We are a local government DB administrator. It is very complex.

We have a smaller population of about 2200 employees. Even though we have separate committees, they are comprised of the same members. Then there's me handling administration for both plans and keeping the committee updated. We do more education for the 401(k) plan and sometimes will include information about the pension plan. We do a lot of communication around both plans as we bring it all together to show how we are helping to prepare employees for retirement.

Cash Balance Plan for partners only (no education, separate recordkeeping) Profit Sharing and 401(k) plan for partners and staff Associates' 401(k) plan for associate attorneys Profit Sharing and 401(k) plans bundled recordkeeping and education.

If our plans had Facebook accounts, each relationship status would be "It's complicated."

The qualified defined contribution plan communication is combined. The non-qualified plan and defined benefit plan have separate communications.

Yep, I do and do it quite well...despite having one hand tied behind my back by the plague of overwhelmingly odious regulations and the scourge of auditors anally focused on the barn door rather than where the horse is heading.

We use the same independent TPA as recordkeeper for both plans, and use the same carrier for investments for both plans. It's always tougher to administer the DB plan, especially coordinating between the carrier and TPA. We use the same financial rep for both plans.

Plan sponsors have been multi-tasking since way before multi-tasking was "cool"...

NOTE: Responses reflect the opinions of individual readers and not necessarily the stance of Asset International or its affiliates.