How to Successfully Rehab a Hospital Retirement Plan
If you ask for hard numbers to back a particular case involving positive outcomes, it’s something Chad Larsen’s more than happy to provide.
An area of obvious (and well-deserved) pride for Larsen and his team at MRP, a Colorado- and Utah-based retirement plan and wealth management services shop, is an area hospital they’ve worked with since 2001.
At the time, the hospital had a participation rate of approximately 50 percent in their defined contribution plan. In the time since, the hospital went through a “soft freeze” initially of their defined benefit pension plan, and then a “hard freeze” in 2017.
Thankfully, the plan sponsor is extremely mindful of their employees and goes to great lengths to help them plan and prepare for retirement.
When the hard freeze hit, the hospital contacted Corey Whitehead and Paul Lamb of the MRP Team. It wanted to know if MRP could work with their actuaries and their committee to devise a comprehensive education and engagement program.
It also wanted MRP to help employees better understand the changes to their defined benefit pension plan and the enhanced (bridge) contributions that would be made to the defined contribution plan.
To its credit, the hospital also wanted one-on-one sessions (over and above MRPs regular engagement) made available for every impacted employee—if the employee so elected—to walk them through the numbers. What was going away, what was going to replace it and how it would individually affect them were fully explained.
Here’s what happened:
MRP Employee Engagement Activity—By the Numbers
- Employee group meetings: 17
- Employee one-on-one meetings: 538
- Number of new employees enrolled in the DC plan: 44
- Number of increased deferrals: 144
- Number of employees signed up for auto escalation: 87
- Number of employees helped with roll-ins to the DC plan: 48
- Estimated roll in amounts to the DC plan: $1. 9 mil
- Number of individual retirement projections run for employees: 232
- Number of beneficiary updates: 152
- Number of employees assisted in logging into the website for the first time: 84
- Number of investment allocation reviews for employees: 354
- Number of Social Security reports requested and/or provided: 105
These results (and 500-plus individual sessions!) occurred over a 75-day period with four MRP retirement specialists committed to the project to ensure deadline and deliverables were met.
The extent to which the firm was involved was something new, a level at which they had not previously engaged. The results were well-worth the extra effort. The hospital is thrilled at the service they were provided, and the fact their employees largely avoided the angst and anxiety that often accompanies a change. The participants understand how their retirement savings are affected, and the importance of continuing to save. Ultimately, it was a win-win for all involved.
Chad J. Larsen is president and CEO of Denver, Colorado-based MRP.