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The Fiduciary Focus Blog

Evaluating Plan Assets & TIAA Contracts to Reduce Expenses: A 403(b) Case Study

A.J. Walker, AIF ® 24 July, 2019

case-study-blog

Guidance Point Retirement Services conducted a comprehensive fiduciary assessment with this client, resulting in a decrease in overall plan expenses.

profileClient Profile

  • Educational Services Industry
  • One 403(b)
  • 195 plan participants
  • Three TIAA Contracts
  • 19.6 million in plan assets
  • Prompted by 403(b) regulation changes to assess plan specifics

The Challenge    challenge

This client was referred to Guidance Point Retirement Services by another educational institution with similar plan specifics. TIAA also recommended Guidance Point Retirement Services as an option to consider during independent review and selection of a plan advisor.

When this client contacted Guidance Point Retirement Services their current plan had an appointed record keeper and administrator but no advisor. In fact, the client had never sought the counsel of an advisor at the plan level. When regulations for 403(b) plans changed the client was prompted to review their current plan to determine if:

  1. Investments were performing favorably
  2. The three TIAA contracts in place were fully optimized
  3. The Fiduciary Plan Governance was comprehensive

process The Process

The client appointed Guidance Point Retirement Services as plan advisor and requested a comprehensive fiduciary assessment. During the six months that followed the team at Guidance Point conducted an extensive plan review, evaluating the client’s:

  • Current fiduciary process
  • Overall plan design
  • TIAA contract structure
  • Fee structure
  • Investment performance
  • Operational compliance
  • Plan communication/education for participants

After the plan data and research outcomes were documented, the team at Guidance Point Retirement Services met with the client to present findings and provide plan recommendations for consideration.

results The Results

Key findings from the research:

  • Unveiled operational issues
  • Indicated that the plan administration and documents were not aligned
  • Determined that TIAA contract fees and investment costs could be reduced
  • Concluded that the current plan lacked structured fiduciary governance process with appropriate documentation

Based on the key findings from the Fiduciary Assessment, Guidance Point Retirement Services worked with the client to implement the following:

  • A low-cost investment menu to reduce overall plan investment expenses
  • A revenue capture account with TIAA to redistribute excess revenue to plan participants
  • An industry best practice fiduciary governance process that encompassed a:
    • Retirement committee charter
    • Policy statement
    • Fiduciary governance checklist

The client now maintains Guidance Point Retirement Services as plan advisor and works with the team on a quarterly basis to continually review and refine plan details.

Does this client’s scenario sound familiar? Get in touch with the team at Guidance Point Retirement Services for more information about conducting a Fiduciary Review of your plan.

Contact Us!

Guidance Point Retirement Services is an independent institutional investment advisory and retirement plan consulting firm. That means that we are a 100% fee-for-service consulting firm. Our recommendations are backed by years of experience and expertise, not reimbursements from affiliate networks. Our focus within the institutional marketplace, specifically with retirement plans, and our fiduciary focus structure enables us to be a trusted partner for our clients.

 

Topics: Fiduciary Governance Process, Higher Education, Healthcare