Case Study

A Fortune 500 telecommunications service provider was interested in evaluating its current 401(k) plan design. It wanted to evaluate such factors as:

How do participants perceive the plan?
How does the plan compare to offerings at peer companies?
Does the plan assist participants in preparing for retirement?
Does the plan serve the needs of different employee groups (e.g., new hires, mid-career employees, etc.)?
Is there a better way to spend the match dollars being contributed to the plan?

SBA delivered the following scope of services:

Current-State Assessment
SBA extracted participant-level data from our client’s record keeper and added additional identifiers from payroll. We then created a cross section of data based on available plan statistics, such as account balances and deferral percentages, along with location, division, and employee type information.
Employee Interviews
SBA developed a script and conducted individual one-on-one, focused phone interviews with selected employees. The objective of the interviews was to pose questions in order to reach definitive conclusions regarding the value employees place on different aspects of the plans and of alternative plan features. The results were consolidated in an electronic format that could be queried in different ways and included in the analysis.
Peer Group Analysis
SBA performed a focused benchmarking effort against our client’s named peer group. This analysis assessed plan features that prospective employees might find particularly appealing.
Alternative Plan Design Modeling
SBA developed alternative plan design recommendations. Each alternative design was modeled at a detailed level taking into account such factors as plan cost, participant group “winners” and “losers,” and considerations for implementing a new plan design.