Managing two 401(k) plans that serve participants in its multiple business units, officials at News Corp., New York, decided to go on a defined contribution diet to trim the fat and build muscle.
Trimming the fat meant a comprehensive restructuring to reduce costs for the two plans with combined assets of $1.8 billion. News Corp. negotiated lower fees for some existing options, replaced other options and switched, where possible, to collective investment trusts.
Building muscle meant creating identical menus for both plans, removing redundancies, simplifying choices and eliminating revenue sharing.
It will be awhile before News Corp. can do a complete physical exam of its plan design and investment modifications because most changes took effect last month. Still, early signs look promising for the 401(k) plan that covers participants at Dow Jones & Co. and for the 401(k) plan that covers several other News Corp. businesses, including HarperCollins Publishers LLC. “The old investment lineups were good lineups, but we felt there was a context to improve,” said Marco Diaz, senior vice president and head of global benefits for News Corp. “We reviewed pricing. We wanted to take away the obfuscation of revenue sharing. We wanted to determine the right mix of active and passive investments.”
The various changes at the two plans will save the 12,308 participants an estimated $2.24 million in annual record-keeping and investment fees, he said. The review of the two plans began soon after the latest iteration of News Corp. became an independent company in July 2013.