401(k) Case Studies
Engineering & Construction
A national engineering company found flaws in the construction of their 401(k).
They brought in EVOadvisers to evaluate their plan and recommend improvements. We found its design was based on a 1990’s insurance platform and had not been upgraded to current best practices. EVOadvisers simplified the design of the plan for ease of administration, lowered costs, introduced a diversified set of efficient, low-cost mutual funds, and optimized the interface for employees, making it a more compelling employee benefit. Here’s a snapshot of what changed.
Disclosure: This testimonial was given by a current client. No cash or non-cash compensation was provided for the testimonial. We are not aware of any material conflicts of interest on the part of clients giving a testimonial resulting from their relationship with EVOadvisers.
Simplified the plan.
Before
An insurance company acted as record keeper and fund provider.
Investments —
- High-cost insurance investment options – not mutual funds with ticker symbols — making it difficult to find out their true cost.
- Difficult for employer to benchmark and research the investments.
- Compliance: No plan oversight / investment committee processes and limited monitoring of fees and investment performance.
After
EVOadvisers provides a main point of contact, coordinating an experienced record keeping and third party administration team at Employee Fiduciary.
Investments —
- Diversified, low cost investment options with pre-built EVOadvisers allocation models.
- All mutual funds with tickers — so employees can do all the research they want. No opaque insurance “separate accounts.”
- Compliance: Addition of investment committee processes and annual monitoring of fees and performance.
Maintenance — Simple process to let employer know key dates and timelines to be in compliance with regulations.
Amplified the experience.
Before
Service — Insurance company provided basic support through a call center.
After
Service —
- Experienced support team to help answer plan sponsor questions.
- Provide proactive support and at-a-glance reference tools to meet plan deadlines and ERISA reporting requirements.
- Participant advice days, giving employees the opportunity to meet with a CFP® professional to discuss their 401(k).
- Customized videos and resources pertaining to their 401(k) to help onboard new employees.
- Ongoing advice on optimal plan design to meet employer’s evolving needs.
Investments —
- Monitor investment positions and update models annually.
- Offer transparency to participants through use of low-cost, publicly-traded mutual funds.
Quantified (and lowered) the costs.
Before
Total annual cost: $54,288
Costs for administration were not disclosed. The full cost of the plan was taken from employees’ retirement accounts through a mix of high fund expense ratios, a “wrap fee,” and “revenue sharing” costs. None of these were tax deductible business expenses.
After
Reduced plan costs by more than 66%
Total annual cost: $22,460*
- Administration costs: $17,256 (tax deductible business expense)
- Investment expense: $5,204 (average fund expense ratio: 0.08%)
*Costs are from the time the plan moved to EVOadvisers management.
