Client:
Global Manufacturing Company
Background:
- A cash balance plan managed by a Wall Street brokerage firm
- A 401(k) plan with a large recordkeeper, but no independent consultant
Concern:
Cash Balance Plan – The Company had:
- Outgrown the brokerage “manager of manager” model
- Wanted to take a more institutional approach to asset allocation and manager selection to achieve better investment results
401(k) Plan – The Company was very satisfied with their recordkeeper from an administration stand point. However, they wanted a firm that could:
- Take fiduciary status on the plan
- Make investment recommendations to the in-house committee comprised of the top executives of the corporation
- Address their concern with participant level fees
Resolution:
FIA was hired to provide a retainer suite of services which included overseeing the cash balance plan and the 401(k) plan.
Ongoing Success:
The Company
- Implemented a custom low volatility asset allocation for their cash balance plan that tied into the CFO’s volatility risk budget
- Hired institutional managers, including alternative managers and index funds
- FIA now meets with the committee to monitor progress versus objectives
FIA:
- Benchmarked all plan investments and recommended replacing certain funds and adding certain asset categories
- Streamlined the investment fund lineup with best in class institutional funds with low expenses
- Significantly lowered plan fees
- Monitors the funds and fees on an ongoing basis
- Worked with The Company and the recordkeeper to develop a customized communication plan
- Rolled out the positive changes to participants