Challenges

There were two major problems with its participant-directed defined contribution pension plan: below-average participation and inefficient asset allocations among those employees who did participate.

The company’s administrator was deeply concerned that the plan’s education program had become ineffective and employees might not be able to achieve financial independence in their retirement.

Company leadership sought to engage an independent advisor, but they weren’t sure where to go for an unbiased review of their current program. Ultimately, they reached out to McKinley Carter.

Solution

The team at McKinley Carter first reviewed the company’s records to quantify the average employee age, income, plan participation, accumulated balance and asset allocation. This would help them design a relevant education program.

McKinley Carter's Retirement Plan Services Division then initiated a thorough review of the current plan's investment lineup and all options available on its platform. This would help them design asset allocation models based on risk tolerance and time horizon and balance risk with return.

Finally, McKinley Carter’s workplace education team launched a series of education programs, including one-on-one guidance on plan participation, risk assessment and coordination with any existing financial plans. These personalized consultations continued to be offered periodically throughout the year. As a result, plan participation increased the first year and continued to improve thereafter.

Outcome

The McKinley Carter team continues to meet regularly with the company’s executive management, providing updated guidance about the plan, reports on the current investment lineup and recommendations for investment revisions and educational programs.