Tag Archives: defined contribution administration

Milliman adds Holzer Health System as retirement services client

Milliman has added Holzer Health System as a defined contribution client. Holzer Health System is a multi-discipline healthcare system with more than 160 providers and 2,400 employees providing services in over 30 areas of expertise from 15 locations throughout Ohio and western West Virginia.

“We chose Milliman for their reputation of being a trusted service provider who values commitment to client service. In addition to service, the website is user friendly and includes robust tools to assist participants in planning for retirement. Partnership with providers is a critical decision, and Milliman’s unique ability to design services and systems to meet the needs of all our retirement plan participants was a strong factor in our decision making,” says Lisa Halley, vice president of human resources.

Milliman will provide recordkeeping, administration, communications, and compliance services for the Holzer Health System 401(a), 403(b), and 457(b) plans. The Robertson Group at Morgan Stanley headquartered in Columbus, Ohio, is the independent co-fiduciary investment adviser providing consulting services and participant education for the plans.

We look forward to an enduring relationship with Holzer Health System, and we are honored they selected us. At Milliman, our focus is to provide superior service and value that exceeds our client’s expectations. We believe that strong service and a commitment to the industry is what most plan sponsors want and need.

For more information about Milliman’s employee benefit services, click here.

A personal touch enhances 401(k) plan

One telecommunications company seeking an upgrade of its 401(k) plan’s design and administration determined that Milliman was able to provide them with the type and quality of services needed. Milliman consultants offered the company a three-pronged solution to address several operational concerns related to its 401(k) plan. The case study entitled “Service is in the eye of the beholder” by Dominick Pizzano highlights the approach.

Here is an excerpt:

(1) Plan design revisions. Milliman’s analysis of their situation revealed that several of the ongoing administrative burdens could be addressed through amending the plan. Suggested revisions included (a) removing the joint and survivor annuity requirements which had been included and continued in the plan even though by law the plan was not a type of plan that required such annuities and neither the firm nor participants had expressed any interest in using these payment options; (b) increasing the 401(k) deferral limit which had never been modified to reflect the higher limit that went into effect with a past law change; and (c) adding a $5,000 mandatory cash-out threshold. Milliman proposed amending the plan to incorporate these revisions.

(2) Implementing a more service-oriented administrative approach. There were several operational areas (e.g., loan applications, withdrawal requests, and qualified domestic relations order determinations) where the previous provider did not assume responsibility. Milliman assured the organization that if they made the switch to Milliman, they would be relieved of such tasks in the future as these services would fall within the scope of Milliman’s responsibility.

(3) The existing 401(k) plan currently offered participants a choice of 34 investment alternatives, many of which were similar in asset composition, expense ratio, and average return so as to be redundant. Analysis of the breakdown by fund indicated that many of these funds were not being used by participants. Accordingly, the current array of funds was creating more confusion than appreciation with participants. Milliman proposed to have its investment consultants analyze the existing funds and replace them with a more concise set of funds that would provide sufficient diversification opportunities for participants by covering each of the investment categories previously provided but doing so with a smaller number of funds carrying lower expense ratios. In conjunction with this smart-sizing of the plan’s investment alternatives, Milliman also proposed to have the plan offer Milliman’s InvestMap as an alternative for those participants who did not want to assume the initial task of designing a unique investment portfolio as well as the ongoing responsibility of monitoring fund allocations. By choosing InvestMap, such participants would have an age-appropriate allocation mix created for them upon their selection with such mix proportionately rebalanced as they approached retirement.

Painters and Allied Trades District Council 82 chooses Milliman for its defined contribution services

Milliman announced today that we have added the Painters and Allied Trades District Council 82 DC Plan as a defined contribution client. The plan covers collectively bargained members in the states of Minnesota, Wisconsin, and North Dakota with approximately 2,300 participants and $155 million in plan assets.

Milliman is providing recordkeeping, consulting, and communication services for the District Council 82 defined contribution plan.

We are thrilled that the Trustees of the Painters and Allied Trades District Council 82 DC Plan chose to hire Milliman. The Trustees decided to merge two different plans together and it was necessary they had a solid solution in place for their members. The Trustees were confident in our reputation for client service and the solution and approach we discussed resonated with them.

Iowa Sheet Metal Workers Local Union No. 263 taps Milliman for its defined contribution services

Milliman today announced it has added the Iowa Sheet Metal Workers Local Union No. 263 as a defined contribution client. The plan covers collectively bargained members in the state of Iowa, with approximately 450 participants and $20 million in plan assets.

Milliman is providing recordkeeping and communication services for the union’s retirement savings plan. DiMeo Schneider provides investment consulting services and Benefits Management Group, Inc. provides administration for the plan. Both assisted with the search.

Milliman is committed to the Taft-Hartley community, and everything about our business model revolves around strong client service. We believe this has a lot of appeal to plan trustees. Our value proposition is more than a commodity service, and the trustees clearly appreciated our client support team.

Benefits of self-directed Taft-Hartley DC plan

Implementing a daily-valued Taft-Hartley defined contribution (DC) plan that participants can self-direct offers advantages to both trustees and participants. Milliman’s John Donohue explains some of the advantage in his Multiemployer Review article “Taking the Taft-Hartley defined contribution plan to the next level.”

Here’s an excerpt:

When participants have been working in their occupations for 20 to 30 years, it is likely they have accumulated sizable account balances. Allowing them to self-direct their accounts during the early to middle years of their careers can have a significant impact in helping them achieve their retirement goals. For those participants who have little interest in choosing their investments or are too busy to pay attention to the benefit, investing their money into a qualified default investment alternative (QDIA), such as a target date fund, allows for an investment strategy that aligns the participant’s retirement date with his or her investment risk (i.e., portfolios shift to a more conservative allocation as the member gets older). A QDIA is a default fund for participants who do not make an election, and as long as certain criteria are met it affords plan trustees fiduciary protection under ERISA §404(c). Moving to self-direction enables additional fiduciary protection for trustees attempting to manage an investment allocation that provides expected returns for the long-term retirement horizon of a 20-year-old participant while mitigating the volatility risk of a 60-year-old participant nearing retirement. These two objectives fall on opposite sides of the investment spectrum and highlight a significant challenge that is extremely difficult to achieve.

As participants approach retirement, an important component of retirement planning is the ability to develop a holistic view of all benefits accrued: defined benefit, defined contribution, Social Security, etc. When a defined contribution plan is not valued daily, the participant is viewing dated information that does not take into account market fluctuations and contributions for the current period. Allowing the plan to be valued daily will enable them to view their account balances or request current information about their accounts. Therefore, the participant will have a better understanding of his or her retirement needs.

In the same regard, bringing increased visibility to the defined contribution plan for apprentices and journeymen allows them to create a strategy for how to invest their accounts. Based on their individual situations, participants can invest their balances more conservatively or more aggressively. There are also professionally managed investment tools and programs that can take into consideration all of the participant’s retirement accounts, such as outside assets, spousal accounts, etc. These tools can assist members with providing investment allocations of their defined contribution plans based on these other benefits.

Administering a 401(k) plan termination

There are certain circumstances that can result in a company terminating its 401(k) plan. Milliman’s Ginny Boggs was quoted in a recent Employee Benefit Adviser article discussing the steps involved with a 401(k) plan termination during the American Society of Pension Professionals & Actuaries (ASPPA) annual conference.

Here’s an excerpt from the article:

Until all assets within the plan are finally distributed the plan still remains in effect and cannot be terminated. During this time, Boggs recommends that advisers work with their clients on:

• Testing
• Distribution requests due to many participants wanting their money immediately and to assist with loan repayments
• Governmental forms and filings
• QDROs

Advisers should remind their clients to use up their forfeiture accounts through expenses, allocating to participants or offsetting final contributions

“You can’t have any unallocated assets going into plan termination and you do have to liquidate,” Boggs said. “You want to make sure the plan termination amendment encompasses everything that the plan document doesn’t already provide.”