PLANADVISER - March/April 2018 - 27

Just recently, Kulick sat down with a
42-year-old registered nurse to discuss
her 403(b) plan. Even though she had
started saving, thanks to automatic
enrollment, Kulick discovered she
would end up with an income shortfall
by age 78 if she stuck with her current
savings rate. Using CAPTRUST's retirement
planning tool, he calculated the
deferral rate needed to replace 80%
of her income until age 90. " She made
the change to her account on the
spot, " Kulick recalls. " After spending
20 minutes discussing her retirement
future, her confidence was visible and
it was a great feeling for both of us. "
Last year, during visits to a client
that has 13 locations, Kulick says, 57%
of employees took action and implemented
the advice from CAPTRUST's
Retirement
Blueprints-its
customized
retirement planning process; 43%
were already on track for their retirement
goals. The program resulted in
participants' average income replacement
rate rising from 57% to 72%
and average deferral rate from 6% to
12%. Of the client's 942 participants,
34% used CAPTRUST's financial wellness
and retirement planning advice
services last year.
In addition to in-person meetings,
employees can also take advantage
of the participant website and
CAPTRUST's advice desk. The firm
regularly sends employees newsletters,
webinar reminders and market updates
with an emphasis on scheduling individual
advice sessions, Kulick says.
It is this individualized approach,
coupled with plan design, that Kulick
says can make the real difference.
Through plan design benchmarking
projects in the past year, Kulick and
his team have worked with several
clients on adding automatic enrollment
and escalation; increasing automatic
deferral rates; reducing vesting
requirements;
expanding
eligibility;
and enhancing match formulas, among
other changes.
During the client onboarding
process, Kulick and his team generally
put a priority on re-evaluating
the plan's qualified default investment
alternative (QDIA), as, he says,
clients often tell him that they never
went through a " separate and distinct
process " to select their QDIA. Usually,
the default is the plan's target-date
fund (TDF) and, quite frequently, the
recordkeeper's proprietary solution,
Kulick notes.
The process begins with a deep
dive into the plan's demographics to
see how the QDIA is being used-the
team analyzes the age of the work
force; distribution behavior at retirement;
distribution options allowed
under the plan; savings rates; average
account balance by age group;
the
number of participants who are
retired or close to retiring; and the
demographics of participants who use
the TDF. Team members then share
this information with the plan sponsors
and show them how it might
change, say by 2028.
Over the last year, Kulick's team
has also paid particular attention to
considering possible changes to its fee
policy; completing fiduciary training
for all new client committees and new
committee members; and exploring
3(38) services with its clients as a way
to save time and manage risks. Kulick
is a 3(38) investment manager to onefourth
of his clients.
On a quarterly basis, Kulick meets
with plan sponsors to go over plan
demographics as they relate to the
clients' goals and maybe to discuss
changes in deferral amounts or asset
allocation. Success can, of course, be
measured by participation rates and
plan asset growth, but Kulick believes
the criteria should be specific to each
plan sponsor based on its objectives
and challenges.
In the instance that committee
members each have different objectives-or
maybe the company itself
cannot afford to enhance the plan
design with automatic features or safe
harbor matches-the challenge actually
creates an opportunity to start
over, in a way. " Sometimes, leveraging
provider technologies and communications,
working together to achieve a
common goal and getting back to the
basics of getting employees enrolled,
saving and properly invested, is the
best strategy, " Kulick says, adding that
he does not take his role lightly-i.e., to
" It has never been
harder to be
a plan sponsor,
and multiple
generations
are now directly
responsible for their
own retirement
savings. "
help hardworking Americans through
the decisions made by the committees
and boards he works with.
His client retention rate speaks for
itself; Kulick says he has never had
a client leave based on the service
it
received from him or his
team.
CAPTRUST's average client retention
rate since 2007, when it first started
measuring, is 98%, he says.
As for what lies ahead, Kulick says
that, as more employees retire, he
predicts plan sponsors will be looking
to advisers to help them with decumulation
strategies such as retiree financial
advice, retirement income products
and spend-down features in TDFs.
CAPTRUST is working with its
clients on " retiree-friendly " plan design
and distribution options,
in addition
to personalized advice. " Our team
has been conducting due diligence on
retirement income products for many
years now, and, while adoption rates
have been low, we believe plan sponsors
are concerned about [decumulation]
and will address this issue in the
years to come, " Kulick says.
Other issues that he believes will
continue to affect retirement plans are
fiduciary regulation, fees and payment
structures, and increased use of collective
investment trusts (CITs). " The fiduciary
landscape has changed rapidly,
with new legislation and market conditions
placing increased scrutiny on
defined contribution [DC] programs, "
Kulick says. -Corie Hengst
planadviser.com march-april 2018 | 27
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PLANADVISER - March/April 2018

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