PA: How is your team/process/structure unique? How has it evolved? Where will you be in five years?
What makes MHK Retirement Partners unique is our team-based approach to servicing our clients, from the boardroom to the break room employing a proactive, data-driven process that goes far beyond the basics of funds, fees, and fiduciary responsibilities. Our structure allows for personal and individual interaction with every participant to help them achieve retirement readiness.
What sets MHK apart is our unwavering commitment to retirement plan participants. MHK is a team that truly cares about participants’ ability to attain their retirement goals by driving conversations towards retirement readiness, focusing on steps participants can take today to reach those goals in the future. Utilizing Standard of (k)are, our propriety CEFEX-certified retirement plan management software solution, we are not only able to help participants build and implement an action plan, but also use the information from those employee meetings to facilitate decisions in the boardroom. We believe this is what makes MHK’s process unique.
Beyond our persistent commitment to plan participants, we have a large focus on educating plan sponsors and helping them to understand and manage their fiduciary responsibilities and associated liabilities. Our goal is to empower plan sponsors with knowledge to be better fiduciaries to their plan. With our assistance, our plan sponsor clients are better equipped to implement and document prudent processes and adhere to industry best practices. We believe that our unique way of servicing clients enables them to be confident their fiduciary responsibilities are being fulfilled.
Our process has and will continue to evolve to meet the changing needs of our plan sponsor clients and become more efficient in our delivery. Through service delivery standardization and focus on efficiency we are able to cover much more with our clients in a shorter amount of time than ever before; more effectively using both our and the plan sponsors’ time.
Through our commitment to learning and continuous evolution, in five years we strive to be even better at helping plan sponsors build strong retirement plans that allow their employees to retire successfully. Our mission is and will continue to be retirement readiness.
PA: What have you done in the past year to improve participants’ retirement readiness?
With retirement readiness as our mission, employee education has always been a staple of our service model. Throughout the last five years, the majority of our plan sponsors have implemented automatic enrollment and auto increase programs to promote better savings levels. Two years ago, we made mandatory employee meetings an emphasis. With that, we were able to meet with most of the plan participants in the companies we partner with, which coupled with the plan design updates, dramatically increased participation rates and deferral rates. We also obtained valuable information from plan participant including average risk tolerance, level of financial knowledge, income replacement needs, outside savings amounts (including spousal accounts), and overall retirement readiness. This gave us great insight to build better plans through other design changes, investment option additions, asset allocation models, and target date analysis.
This past year, our emphasis has been creating custom education campaigns designed to help those who we believe need it the most. We worked directly with plan committees and human resource (HR) departments to create custom presentation modules designed to achieve the goals identified by the committee. This is in addition to specific employee one-on-one advice campaigns which have taken our already strong employee education program to the next level. What made this change more effective is identifying those employees who could most use the help whether it be those who have not yet met with an adviser, are projected to have insufficient retirement savings, or are not maximizing the employer contribution. The results have been outstanding, and we will continue this emphasis over the next 12 months to further build better plans and help more people reach retirement readiness.
PA: As a retirement plan adviser, what do you take the most pride in?
We take the most pride in helping employees prepare to retire with sufficient income and delivering a superior service experience for the plan sponsor. We are extremely proud of our service model and the processes that enable us to deliver excellent service with efficiency. Focusing on constant improvement, we take the time each year to submit ourselves to CEFEX certification to ensure that we are adhering to the latest industry best practices. Furthermore, as a service provider, we understand our aim should be more than just checking the boxes. We try every day to do the little things that go beyond the services listed in our consulting agreement to truly make a difference in the lives of the people we partner with.
PA: What benchmarks do you use to measure plan and client success? How do you react to clients or prospects who don’t share your goals for their retirement plan?
If we are to achieve our mission of Retirement Readiness, being able to track and measure plan and client success is essential. At least annually, we track the plan’s participation rates, deferral rates (of both HCE’s and NHCE’s), percentage of employees maximizing the match, and the percentage of employees with a “diversified allocation.” In addition, through Standard of (k)are we utilize a plan summary called the “Plan Avatar” that rolls up the information derived from the employee one-on-one meetings. We utilize the “Avatar” to help define retirement readiness and identify demographics of plan participants at a more granular level. This allows us to measure the effectiveness of the education campaigns in improving retirement readiness. The Plan Avatar also tracks the plans’ average age; Retirement Target Age; Age at which participant plans to start taking Social Security; Current Age at which retirement savings will last until; Goal Age at which retirement savings will last until; Income; Monthly budget (Current); Monthly Retirement budget; Income Replacement Percentage; Retirement Income dependency on retirement plan versus other sources; Balance by source (Both inside the plan’s retirement plan and outside sources); Deferral Rates; Risk tolerance; Investment/401(k) Understanding (Expertise) level; Number of employees utilizing target date, risk-based model, other solutions.
This information has helped us immensely in building better plans through having more in-depth plan design discussions and creating custom education campaigns to meet the varying needs of each specific participant population, whether identified by age, location, risk profile, investment allocation, etc.
PA: What are the most important issues that your plan sponsors face with their company retirement plans and what specific actions do you take to assist them in overcoming those issues?
In the ever-changing world of retirement plan rules and regulations, there are a lot of responsibilities and liabilities placed on retirement plan sponsors. Plan fees are an area of much litigation, therefore a common concern of plan sponsors is understanding their fees and how to assess the reasonableness of those fees. Because of this, we have noticed an increasing pressure felt by plan sponsors to offer a plan with the lowest fees. This is in direct conflict with increased compliance requirements and demand for onsite education and one-on-one advice for the employees. These services can all be outsourced, but for a cost and at a time when sponsors are already feeling pressure to reduce plan fees. Additionally, the job market is tightening, and it has become increasingly more important for employers to offer a strong retirement program that will help to attract and retain talented people. Plan sponsors feel the pressure of having to balance offering a top of the line retirement program at a very low cost.
Along with achieving plan goals and offering top-notch service, we see it as our role to help sponsors assess the reasonableness of their plan fees in light of the services they are receiving. MHK reviews all plan fees with each plan sponsor client annually by providing the Investment Committee with an independent fee benchmarking report that outlines all fees, revenue-sharing, and investment expenses clearly and transparently. We then compare those expenses to averages based on the services being rendered by all parties. Our goal isn’t necessarily to always ensure the lowest fees possible, but instead to help the plan sponsor balance quality with price by offering a plan that meets their goals at a reasonable cost.
Business at a Glance
Number of plan assets under advisement – $586,790,238
Median plan size – $5,072,945
Number of plans under administration – 68
Total participants served – 10,793