At Glens Falls Hospital, replacing virtually the entire investment lineup of its 403(b) plan was only part of the overhaul engineered by executives as they tried to increase diversification, reduce overlap, cut costs and improve plan design.
The hospital acted because improving the retirement savings plan will “help attract and retain talent,” said Kyle Brock, vice president of human resources for the hospital in Glens Falls, N.Y., whose 403(b) plan serves 2,300 participants.
The new investment lineup, which took effect in December, is the latest in a series of steps taken by executives of the $170 million Glens Falls Hospital Partnership Plan.
The changes began in November 2015, when the plan outsourced and automated its administration; previously documents were processed manually by the human resources department. At the same time, the plan started auto enrollment and auto escalation.
Subsequently, plan executives added a target-date series as a qualified default investment alternative, negotiated lower fees on investment options, cut plan administration costs and changed record keepers.
“We rebuilt the plan from the ground up,” Mr. Brock said. “We looked at the plan from an investment, policy and benefit standpoint.”
When comparing Glens Falls with other clients, “these changes may have been a bit more than normal,” said Kevin Murray, the plan's consultant and a Wellesley, Mass.-based director of Cammack Retirement Group. “However, we had the perfect storm” of plan improvements, he said.
Unlike many 403(b) plans that have reduced the number of investment options, the Glens Falls plan has a few more choices — 22 vs. 19 — than previously. Executives removed some investment overlap, added six asset categories to improve diversification and added the target-date fund portfolio.
Both the new and old lineups offered funds from multiple providers with a mixture of passive and active investments.
The new lineup has overall lower investment fees, but Mr. Murray didn't provide an aggregate number.