Client Successes
Read real-world examples demonstrating our retirement plan expertise and exceptional service.
Revitalizing a Retirement Plan for Optimal Performance
Problem
A Midwest-based machine manufacturer with approximately 400 employees partnered with Ekon Benefits after experiencing ongoing issues with their retirement plan, which was managed through a traditional banking relationship. While the bank provided basic services, their service limitation in retirement planning led to several critical challenges:
- Service Gaps: The current services were not meeting the client’s needs effectively.
- Underperforming Funds: The plan included several investment options that were consistently underperforming.
- Lack of Low-Cost Alternatives: Few index fund options were available, resulting in higher-than-necessary expense ratios.
- Limited Investment Flexibility: The client desired a broader and more diverse menu of investment offerings for participants.
Solution
To address these challenges, Ekon Benefits worked closely with the client to restructure and enhance the plan to :
- Expand Fund Offerings: Leveraging our direct relationships with mutual fund companies, we introduced a wider array of investment options—including specialty funds in sectors like technology and communications as desired by the client. These were clearly categorized and color-coded as “specialty” funds, distinct from the core, diversified investment lineup.
- Lower Expenses, Provide Better Monitoring: With Ekon’s guidance, the client reduced investment costs and established a clear system to monitor fund performance. The result: access to options with stronger historical performance, many trending toward top-quartile rankings.
- Enhanced Plan Features:
- Roth Contributions were added, allowing employees to make after-tax contributions and benefit from tax-free income in retirement.
- Flexible Payment Options were introduced, enabling employees to retain their funds within the plan after retirement—avoiding costly retail IRA rollovers.
Key Takeaway:
Partnering with Ekon Benefits enabled the client to overcome the limitations of its previous banking relationship. The enhanced retirement program offered a wider range of investment choices, lower fees, and additional features that benefited both the client and its plan participants.
Industry
Machine Manufacturer
Leveraging Fiduciary Expertise to Optimize Plan Performance
Problem
A successful distributor based in St. Louis, Missouri, partnered with Ekon Benefits to improve their defined contribution retirement plan. Previously managed by an insurance company, the plan faced key issues—primarily:
- Hidden Fees: The insurance company embedded fees within the mutual fund expense ratios, making it difficult for the client to track actual plan costs.
- Asset-Based Charges: All plan expenses were charged as a percentage of plan assets, limiting transparency and reducing long-term savings potential for participants.
Solution
To address these challenges, Ekon Benefits recommended transitioning to a co-fiduciary advisory model, resulting in several strategic improvements:
- Lower Overall Expenses: By isolating advisory and administrative costs from mutual fund expense ratios, we helped the client reduce total plan expenses. The implementation of this model, combined with the use of mostly indexed funds, resulted in significant savings.
- Tax Efficiency for the Business: Plan-related expenses, now paid directly by the company, became deductible as ordinary business expenses—rather than depleting the tax-preferred assets.
- Protection of Roth Contributions: In a Roth environment, separating plan fees from investment accounts ensures participant contributions—intended to grow tax-free—are not diminished by embedded fees, preserving their long-term value.
Key Takeaway
By adopting a plan structured without embedded expenses, the client transformed their retirement plan from an opaque, insurance-driven product into a transparent, efficient, and tax-savvy retirement solution. This approach delivered measurable cost savings, enhanced fiduciary oversight, and a stronger long-term outlook for both the company and its employees.
Industry
Distributor
Transforming a Union’s Retirement Plan with Age Based Asset Allocations
Problem
A Missouri-based Local Union’s defined contribution plan was operating under a traditional pooled investment structure. The plan utilized a trust account, with an investment advisor responsible for managing the overall allocation— with a 65% stock and 35% bond mix.
While this approach offered simplicity, it presented a few key challenges:
- Time Horizon Misalignment: The pooled structure did not take advantage of the longer investment horizons of younger participants.
- Communication Barriers: Implementing a directed investment model proved difficult due to participant communication challenges.
Solution
To help address these issues and improve long-term retirement outcomes, Ekon Benefits recommended the following enhancements:
- Implementation of Target Date Funds: We proposed replacing the pooled balanced fund with age-appropriate target date funds. This solution allowed for more tailored allocations based on participant age and retirement timeline.
- Improved Participant Outcomes: At Ekon Benefits, we modeled the potential financial impact of target date fund strategies versus a static 65/35 allocation. Our analysis showed that participants could achieve improved outcomes—approximately 25% to 30% better results—by utilizing higher equity allocations during earlier career stages.
Key Takeaway
This solution significantly enhances investment efficiency. By aligning investments with participant demographics, the plan now provides more strategic, age-appropriate growth potential.
Industry
Labor Union
At Ekon, we have hundreds of happy clients of varying sizes and representing countless industries. If you’re curious to understand how Ekon Benefits can enhance your retirement strategy, contact us today for a personalized consultation.
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