How do you harmonize retirement and pension plans after M&A?

After running illustrations for various companies over the years, we have observed the shift from Defined Benefit (DB) plans to Defined Contribution (DC) plans. While no single factor led to the decline of DB plans, many people still wish they were available. It is vital to ensure that the benefits provided to each group align with the organizational goals when creating a strategy. 😊📈💼 #organizationalgoals #strategydevelopment #benefits #alignment

It is crucial to avoid making any assumptions during this phase. The focus should be on evaluating the current retirement plans and measuring how they are recognized and perceived. To gain a better understanding of what employees and sponsors want from the retirement plan, conducting surveys is recommended. 📊 It is important to keep in mind that contributions, behavior, and account performance can lead to varying outcomes. 💰💻📈.

When harmonizing benefits packages, very often the highest level package is applied to all. You don't want to take benefits away from employees. And the solution is the simplest. Whether harmonization makes sense should be discussed very carefully in advance. What is the goal anyway? What data do I actually have available?

Based on my experience of over twenty years, I have found that effective communication is the most crucial step towards achieving success. It is essential to ensure that your messaging is aligned with the goal of improving outcomes for all stakeholders involved. 🤝💼 Additionally, you should consider different channels and timing for decision-making while planning the resources that you intend to provide at each step. 📅📊 #retirementincome #401koutcomes

Double-check both plans for compliance 🔍, including 5500s 📋, and consult M&A professionals 👨💼👩💼 before implementing 💡.

1. Conduct thorough due diligence to identify plan differences and potential issues. 2. Develop a clear strategy and timeline for harmonizing plans, considering workforce needs. 3. Communicate changes transparently to employees to maintain satisfaction and engagement. 4. Ensure compliance with regulations like ERISA and IRC to avoid future problems. 5. Monitor and evaluate the harmonized plans regularly to optimize performance and costs. For example, a client merged two 401(k) plans with different match formulas. By harmonizing to a single, more generous match, we boosted participation and savings rates, improving retirement readiness across the combined workforce.

👋 In light of the recent surge in ERISA litigation, it has become increasingly important for plan sponsors and committees to monitor and assess their plans and outcomes. To achieve this, it may be wise to establish a committee that is both qualified and engaged, with the added support of hired experts. By implementing these measures, governance can be improved, and the likelihood of improved outcomes and success if a DOL audit arises. #ERISA #governance #auditready #retirementplans #401k

Implementing a prudent process, educating committee members, purchasing fiduciary liability insurance, and creating meaningful benchmarks to compare plans are all considered best practices. #retirementplanning #financialplanning #bestpractices #investment #fiduciary