In 2007, Blue Prairie Group (“BPG”) was retained by a large, Wisconsin-based chain of convenience stores to provide ongoing strategic retirement and investment consulting services to the 401(k)/profit sharing plan. As part of its original scope, Blue Prairie Group designed and managed a series of custom target dates funds for the client, who had been recently selected as the new recordkeeper as part of a due diligent search process led by BPG.
In 2011, based on a series of recommendations made by BPG, the client made the decision to move the custom target date funds to a stand-alone, custom target date recordkeeping-trading platform administered by AllianceBernstein. At the time, the plan had roughly $120 million in total plan assets and 7,000 participants.
After an in-depth analysis, BPG recommended moving to the AllianceBernstein platform for custom target date funds.
- Pricing – BPG was able to reduce plan costs by leveraging AllianceBernstein’s access to institutional pricing from best-in-class managers.
- Risk Control – The move allowed for more sophisticated asset allocation, greater risk control and better volatility management.
- Customization – The AllianceBernstein platforms provided a more custom approach to glidepath design and development, as well as complete open investment architecture.
BPG also advocated for a number of plan design changes, including the addition of auto enrollment and auto escalation features, to increase participation and encourage greater long-term savings.
Finally, BPG negotiated a new, lower-cost fee structure with the recordkeeper to move from an asset-based recordkeeping fee to a flat-dollar, per-participant recordkeeping fee.
- Moved from a trustee-directed profit sharing plan to a participant directed 401k plan.
- Reduced asset-weighted expense ratio from 0.88% to 0.40%, a savings of 54 percent.
- AllicanceBernstein serves as the 3(38) named fiduciary to the custom target date funds.
- Added auto-enrollment to the plan, and increased plan participation from 86 percent to 91 percent.
- Increased the plan’s average deferral rate from 3.4 percent to 6.3 percent.
- The BPG Plan Health Score™ is currently 88 percent, well above the national average of 59 percent.