A private college wanted to modernize its traditional retirement program, including moving away from its longstanding relationship with a bundled mutual fund/annuity provider. Upon notification of the transfer of recordkeeping and plan assets, the provider informed the college that both its 403(b) and 401(a) plans were covered under contracts between the provider and individual employees, although no copies of the contracts could be found. The employer knew this was the case for the 403(b) plan, but it was unexpected news about the employer-sponsored 401(a) plan.

Despite the fact that it would require a massive administrative endeavor, the employer decided to move forward with its plan to amend the 401(a) plan to become a 401(k) plan and establish a new "403(b) Transfer" plan to allow employees to roll their existing 403(b) balances into the new fund options. Plan data would not be transferred from the prior recordkeeper, so individual accounts had to be established and all employees re-enrolled in the plans. The employees had to be informed of the recordkeeping change, educated about the transition and new investment fund options, re-enrolled in the plans and be given the opportunity to transfer their funds, if they so desired.

Communication key to a successful transition

The college's primary objective was to keep employees well informed throughout the transition. Milliman prepared a customized communications campaign to roll out over a six-month transition period; it began with employees receiving a schedule of events to keep them engaged in the process.

Early in the process, the college held "town hall meetings" on campus to lay the groundwork for the transition. With faculty regarding the prior recordkeeper as its retirement "security blanket" the college faced quite a challenge introducing Milliman. The town hall meetings, however, were well attended and the transition process began.

The plan changes were officially rolled out with a comprehensive newsletter, followed up with group employee meetings. The current recordkeeper was requiring employees to complete as many as seven distribution forms to transfer their accounts to the new trustee and fund options. In addition, employees learned that any portion of their accounts allocated to the annuity investment would be paid out in 10 payments over a 9-year period. Milliman developed forms that were color coded and distributed and reviewed them in detail with the employees at the meetings. Employees also were provided the opportunity to meet with Milliman and human resources representatives on an individual basis to complete their enrollment and transfer forms.

Enrollment surpasses previous participation

With the communications and education campaign complete, the final step was for employees to make their decisions on whether to transfer. Within weeks, Milliman received and processed more than 800 transfer checks totaling more than $32M in plan assets. In addition, pretax savings enrollment saw a 50% increase—from 30% with the prior recordkeeper to a 45% participation rate at the time of conversion.

The college was pleased with the smooth and successful transition to Milliman and now remains committed to plan awareness and education, focusing on continuing to educate employees about saving in the newly designed plan and investing for retirement.