The Employees' Retirement Nest Eggs

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This is an example of what we may do for a client's corporate retirement services.


A growing Southern California based engine parts manufacturer is transitioning into a professional executive group from being family operated for almost 40 years. The company sponsored 401(k) Plan has been offered for 15 years and has a small mandatory match but the Plan was never effectively promoted or communicated to the employees. A new Vice President of Human Resources VP was hired who knew the value of the 401(k) and was committed to maximizing its use by the employees to build their retirement nest eggs. The HR VP also wanted to find additional retirement opportunities for the newly hired executive group.

Our firm would identify the new VP HR as a key company advocate dedicated to improving the 401(k) Plan communications, education, investment offerings, participant services to ultimately benefit the employees. The VP HR was also aware of the need for improved Plan compliance. At the time of beginning to work with the Company, the 401(k) participation rate was 28%. No enrollment or re-enrollment meetings were being held, no investment policy statement or retirement committee existed, no review or benchmarking of investment performance or fees were taking place. There was no focus on enhancing participant services or educating the trustees.

We would work closely with the VP HR, lobbying other key people at the Company and engaging the employees directly and consistently, . Webinars would be held for sales people in the field. A review and benchmarking of all plan investments, fees, administration and record keeping would be done that resulted in an enhanced investment menu, lower fees and more stream lined administration and record keeping processes. These efforts would also contribute to the annual independent plan audit running more smoothly and with less billing time.

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An investment policy statement would be drafted and approved by the Plan trustees and the new retirement committee.


Educating the trustees and retirement committee on fiduciary, compliance and legislative issues would occur on a regular basis. Participant services would be enhanced to include one on one investment education access as well as access to web-based services to facilitate better long-term decisions to reach retirement goals.

In the second year, the highly compensated employees would max out their employee contribution capacity and this leads to due diligence to form a nonqualified deferred compensation plan for this group. This new Plan would give key employees an additional means to save for retirement and a robust financial planning tool. 
A long term incentive bonus program would be created for the key employees, and this group would be given the opportunity to elect to defer some of this entire bonus, along with their regular and sales compensation, to their accounts in the nonqualified deferred compensation plan.
Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Investing involves risk and you may incur a profit or loss regardless of the strategy selected. You should consult a Financial Advisor before implementing any investment strategy. This is a hypothetical example and not meant to reflect the situation or any actual client or the performance of any particular investment. You should
 consult a Financial Advisor before implementing any investment strategy.