Our experience and dedication allow us to understand the unique challenges of a Country Club, and provide innovative solutions to meet their specific needs.
This club had problems getting the lower paid employees to contribute enough deferrals for decent discrimination testing results on the plan. Plus, employee turnover was high and there were too many terminated employees sitting on the books of the plan, dragging down the plan metrics and raising costs for everyone. Terminated employees can’t defer any more money and their account balances barely grow. This holds back the overall plan averages. Most providers price fees are based on “average account balance” measures. Thus, the terminated employees were preventing the employees who were still there working from being able to negotiate lower fees as the plan grew.
Our services to help clean up terminated employees was invaluable to this club. With terminated employees out of the plan, the average account balances improved, allowing for re-negotiation of plan fees from the 401(k) record keeper. Limiting terminated employees also is a fiduciary best practice because it is difficult to communicate effectively with employees no longer working at the club or potentially having changed their address.
This club also really benefited from our Welcome process for new hires. This process helps establish rapport right away and makes sure new employees have ample understanding of the benefit. Also, our professionals are able to often help the new employees rollover their previous 401(k) plans into the new plan, which helps raise assets in the plan and allows the new employee to consolidate their retirement assets for easier management and oversight.
We then suggested segregating employees into different types of targeted meetings. People that are already in the 401(k) plan don’t want to hear presentations about “joining the plan” and employees that not yet in the plan don’t want to be bombarded about “raising their deferrals in the plan” when they aren’t even contributing! Once these targeted meetings were used, testing results improved.
Our Value Proposition
Our expertise in the retirement plan arena of country clubs has allowed us to share bench marking research with our clients. This led to those clients being aware and able to shape their benefit program so they offered a more robust benefit than their immediate competition in the area. Our ideas surrounding terminated employees, newly hired employees and the targeted education meetings (with documentation) have all been very well received by the club community.