Profile
2,000 employee hospital with multiple vendors in their retirement benefits program.
The Challenge
Changes in tax law and reporting requirements had made it increasingly cumbersome to deal with multiple record-keepers, administrators and vendors. Employees were confronted with a mixed bag of variable annuity funds and fixed accounts, including proprietary funds and some with unnecessary higher costs.
The Objectives
After reviewing the hospital’s retirement benefits program, the Cannon team set the following objectives:
- Streamline the retirement benefits program
- Make administration and reporting processes more efficient
- Cut costs
- Improve services
- Improve account offerings
The Solution
Our strategists recommended the hospital go with a single vendor in order to make administration, reporting, and record-keeping easier and more cost-efficient. We further recommended that the vendor not offer proprietary funds (which often feature higher costs), but rather choose the most appropriate and cost-effective funds from among different fund families.
Based on these recommendations, the Cannon team helped hospital officials implement these suggestions by choosing a vendor who offered open-architecture mutual funds with a solid fixed-investment option from an insurance company. The plan now offers participants at least two options in each asset class category. We also helped design new loan provisions, withdrawal provisions and contribution sources. A Roth 403(b) option was included in the plan.
We held system-wide group meetings over several weeks to explain all of the changes and new options available. Separate educational meetings were held on the Roth 403(b) component. The hospital now has one record-keeper, one custodian, and one administrative team—Cannon Financial Strategists.