With defined contribution (DC) plans becoming the primary and often only retirement plan offered to employees, the stakes for fiduciaries are higher than ever. Pavilion can navigate the right strategies for your organization. As an experienced DC consulting firm, we currently consult with over 100 clients representing over $85 billion in assets, as of December 31, 2017. We consult on services such as plan investments, fees, plan design, operational compliance and overall fiduciary governance, just to name a few.
Using a holistic approach, we review and advise on all areas of plan management.
Long-term success of a DC plan requires thoughtful design, execution and oversight. We support clients with each of these crucial aspects, incorporating best practices to help maximize the success of participants in reaching a secure retirement, while reducing risks of plan fiduciaries.
A key part of our service includes assisting in establishing a governance process, guiding principles and success criteria for the plan and the organization. We apply lessons from behavioral finance—for example, “nudging” interventions such as auto-enrollment and auto-escalation features—that have proven to increase retirement savings. In addition, we can assist in integrating and testing disparate benefit structures that are the result of a merger or acquisition.
We support clients in reviewing and managing a plan’s investment funds. Our services include developing a suitable investment strategy and policy, designing the investment menu and providing ongoing monitoring and reporting. We can also assist a client in determining if utilizing new products/solutions such as:
- Custom target date funds
- Risk-based portfolios
- Managed accounts
- Income replacement solutions
- White label, multi-manager solutions to aid participant decision-making
Outsourcing investment decisions in DC plans is a growing trend, as the investment and regulatory landscapes continue to increase in complexity. Through our discretionary consulting services, we handle the responsibility of selecting and monitoring investments vehicles—and investment managers—under the plan. We bring diverse capabilities to the table, such as periodic rebalancing and rules-based tactical allocation of plan investment options.
Part of our core service is monitoring the client’s vendors involved with the retirement plan (e.g., administrators, trustees) to assess whether their services are relevant, delivered and competitively priced. We conduct a fee analysis and benchmarking diagnostic at the outset to identify the overall plan fees and determine the reasonableness of these fees. Periodically thereafter, we will conduct a market check-up to confirm the plan fees continue to be reasonable. We will also ensure that vendors are delivering what they have committed to, and that plan sponsors are aware of changes that vendors make in their services offerings.
As a core part of our service, Pavilion also conducts DC provider/vendor searches.
The U.S. regulatory requirements surrounding retirement plans are complex and ever-changing. Clients can rely on us to help them navigate and meet their fiduciary responsibilities, including:
- Providing tools, including due diligence worksheets and checklists, to demonstrate compliance to guidelines.
- Delivering on-going fiduciary training to plan committees and other key stakeholders.
- Conducting operational reviews to evaluate compliance across critical areas of the plan.
- Providing a quarterly regulatory update on proposed changes in regulations or laws.