Your responsibilities as the sponsor of a retirement plan are more significant than you may realize. It’s not enough anymore to simply hire a service provider to manage the plan and offer it to your employees. As a plan sponsor, there is a tremendous amount of fiduciary responsibility, and decision-makers are held to an expert standard in the eyes of the Department of Labor (DOL).
If they don’t have the skills to meet such stringent standards, plan sponsors need to retain outside experts to guide them through the decisions that must be made on a recurring basis, or risk running afoul of the law.
“Many plan sponsors rely on their providers to do everything for them,” says Andrew Gracan, retirement plan advisor at First Commonwealth Financial Advisors. “Because of this, not only is there a misunderstanding of their fiduciary obligations but the tendency is to run the plan on auto-pilot unless there is a major operational issue to be addressed. However, due to ramped-up enforcement and litigation surrounding retirement plans, it’s important for plan sponsors to understand their obligations and have processes in place to ensure their plans are compliant,” Gracan says.
Smart Business spoke with Gracan about key issues plan sponsors must address.
Why are plan sponsors most at risk right now?
Retirement plans and the activities of their fiduciaries are being placed under a microscope. No longer do participants have multiple plans to rely upon in retirement. The 401(k) plan is the primary retirement vehicle for the majority of today’s workforce, and the burden of savings rests on the employee. With personal savings rates and Social Security in a questionable state, a retirement epidemic is waiting in the wings.
Second, the financial crisis has exacerbated this potential epidemic and taken a toll on participant account balances, drastically changing retirement expectations and causing HR issues for companies in their workforce succession planning function. Finally, 401(k) participants bear the majority of the costs and risk associated with their plan, a dramatic change from the traditional defined benefit plan.
As a result, the government has enacted sweeping legislation through the Plan Sponsor and Participant Fee Disclosure regulations. The first wave of required fee disclosures goes into effect July 1, 2012, and with participant level fee disclosures going into effect Aug. 31, plan sponsors are assessing how their plans and their participants will be affected.
Plan sponsors also face the burden in a major increase of DOL investigations. For the past few years, the DOL has provided plan sponsors a comprehensive educational campaign focusing on helping them understand their fiduciary responsibilities. However, the time for enforcement has begun. In 2011, the EBSA closed 3,472 civil litigations, with 2,301 resulting in monetary settlements of $1.39 billion.
Why is now a critical time for business owners acting as plan sponsors?
Due to the increased government focus, litigation and negative publicity associated with retirement plans, it is important to understand the fiduciary obligations that go hand in hand with sponsoring a retirement plan. Plan sponsors are realizing it is important to be familiar with the fiduciary requirements that are placed upon them and the service providers they hire, as they are personally liable for these decisions. In addition, enforcement and legislative actions are forcing plan sponsors to take a proactive role in understanding the reasonableness of fees being charged to their plans and determining whether conflicts exist with the service providers.
What is the biggest mistake plan sponsors make with retirement plans?
The biggest mistake is not realizing that ignorance is not a viable defense. If plan sponsors don’t fully understand their fiduciary responsibilities or processes, it is their responsibility to hire a ‘prudent expert’ who does. Oftentimes sponsors view retirement plans as a product rather than a process and assume the service provider (or nonfiduciary broker or financial consultant) is giving them the necessary fiduciary guidance to mitigate risk. However, this is a major misconception, especially if the service providers are giving fiduciary advice but not taking written liability for it.
Completely understanding your fiduciary obligations, whether or not service providers are taking written fiduciary responsibility for their actions, and whether or not there are inherent conflicts of interest that exist with the service provider, are paramount to the process of being a prudent fiduciary.
How will the requirement of detailed fee disclosures affect plan sponsors?
The most imminent task will come from the plan sponsors disclosures scheduled to be delivered on July 1. The new regulations are designed to provide plan sponsors with a full disclosure of fees charged to the plan, and sponsors must ask if their fees are reasonable, how to determine whether fees are reasonable, and whether they should hire an expert to determine reasonableness.
How can plan sponsors mitigate risk?
Plan sponsors must fully understand their fiduciary responsibilities and the role their service providers play in their retirement plans. While most believe their responsibilities fall within remitting timely employee contributions, overseeing the record-keeper and monitoring investment options in the plan, these are only part of their core responsibilities. The key is for plan sponsors to be prepared to defend all of the decisions made concerning their retirement plan and to show that they have defined processes that can be measured and repeated. If you, as a fiduciary, do not understand your obligations, or don’t have the information or knowledge to run the plan for the exclusive benefit of participants, it is your responsibility to hire an expert who does.
Andrew Gracan is a retirement plan advisor at First Commonwealth Financial Advisors. Reach him at AGracan@fcbanking.com or (412) 690-4592.
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Abby Stancik, a financial adviser, was happy with the results she was getting from her workouts at Overload Fitness. But there was another aspect with which she was even more impressed.
“I really do like that the trainers take your workout as seriously as you take it,” she says. “There is not a lot of chit chat. And beyond that, though, all the staff is very knowledgeable in nutrition.”
She was very interesting in the connection between nutrition and fitness.
“That is as important to me because you can work out like crazy, but if you are putting junk in your body, you’re not going to get the results that you want,” she says. “Overload’s trainers give you good guidance on that. They’re very knowledgeable; they have tools at Overload to measure your body mass index, so it’s really kind of all-encompassing facility.”
At Overload Fitness one of the core values is to over deliver, says Jeff Tomaszewski, vice president and co-owner.
“We pride ourselves on going above and beyond the call of duty or what is expected of us from a client,” he says.
While Overload believes it offers the most efficient and effective exercise program available, the staff doesn’t stop there.
“We want the client to have a world-class experience every time,” Tomaszewski says.
From uniformed staff, to a 67 degrees temperature in the facilities, a ban on mirrors and music, a continuous training of staff on customer service and more, Overload offers world-class customer service.
“We have discussions about not only exceptional customer service experiences but also terrible ones,” Tomaszewski says. “At each monthly staff meeting, we ask each person to share an experience in which they implemented world class customer service in their personal lives. This has a dramatic effect on changing behavior, and it is truly amazing to hear some of the stories that come from this exchange.”
How to reach: Overload Fitness, (440) 835-9090 or www.overloadfitness.com
When PartsSource Inc. launched its ePartsFinder online locator for hospital equipment parts in 2006, the company’s leaders were confident it would resolve any issues regarding customer response time. After all, it enabled customers to receive replies to requests for parts pricing and availability in 30 to 60 minutes, dramatically faster than any other company hospital equipment parts provider.
But over the last couple of years the company realized that sites like Amazon.com and Orbitz were beating it by providing instantaneous pricing and availability for parts. Therefore, being the fastest company in its market niche was no longer good enough. PartsSource’s president and CEO, A. Ray Dalton, challenged his company’s IT department to build an application within ePartsFinder that would deliver instant information on pricing and availability to customers. Essentially, he was demanding that ePartsFinder become as quick and reliable as Amazon.com.
Last October, the company launched the new application, SmartPrice, and after some tweaking and training of employees and customers on how to use the service, customer feedback has been overwhelmingly positive, the company reports.
In addition, PartsSource has found that strong customer adoption of the new service has quickly taken hold. The company is experiencing a surge in new users, the first such upswing since its launch of ePartsFinder six years ago.
PartsSource also reports that it is seeing increases in parts requests and customer satisfaction scores since launching the SmartPrice application. As the company adds more parts to the available SmartPrice matrix, it is experiencing additional increases across the board in each of those key metrics from its entire customer base.
PartsSource’s mission has always been to improve health care delivery while reducing associated costs. Due to changing demographics and health care reform, the need to help its customers reduce costs further will increase dramatically over the next decade.
HOW TO REACH: PartsSource Inc., (330) 562-9900 or www.partssource.com
At Post-Up Stand Inc. every department is focused on customer service and the ways to make it better. Alon Weiner, vice president and co-founder of Post-Up Stand Inc., a manufacturer of tradeshow displays, banners and stands, is helping provide customers with service they come away satisfied with and a product that keeps them coming back time and time again.
The employees of Post-Up Stand take pride in their work and realize the importance of delivering a quality product to customers. No matter what an employee’s position is within the company, they are considered part of the customer service team. From the accounting department to production, all employees work with the customer in mind.
New employees undergo training sessions to ensure they are prepared to handle the questions that come in from customers.
New hires are handed a binder filled with product specifics, procedures and pricing at the start of training to assist in the customer service education process. These employees will also go through a shadow program with senior account executives for the first month of employment. They spend time in each department to learn the complete order process and gain knowledge of the product portfolio.
Training doesn’t end there. New hires also have to be familiarized with the company’s website to understand how the navigation works in order to assist any customers with online issues and questions. Post-Up Stand doesn’t just train new hires. Existing employees get reviewed through incoming calls, client surveys and are offered continuous training on new products and services.
All of this is in an effort to make every customer experience a positive one. The company aims to meet every deadline given and goes above and beyond what customers expect. Employees are trained to never say no and more often than not they are willing to go the extra mile by staying late to the job done.
How to Reach: Post-Up Stand Inc., (216) 332-0530 or www.postupstand.com
For The Ritz-Carlton, Cleveland, every guest that walks into the hotel is considered a VIP. This exceptional treatment of its guests is standard practice and Joseph Mattioli, general manager, makes sure that level of service is consistently being offered.
In fact, customer service is woven right into the hotel’s credo, which reads, “The Ritz-Carlton is a place where the genuine care and comfort of our guests is our highest mission. We pledge to provide the finest personal service and facilities for our guests who will always enjoy a warm, relaxed, yet refined ambience. The Ritz-Carlton experience enlivens the senses, instills well-being, and fulfills even the unexpressed wishes and needs of our guests.”
Every employee of The Ritz-Carlton uses the credo as a guide to providing top-level service. Each employee is empowered to make a guest’s experience special in a personal way. For instance, by noticing a guest’s interest in music, an employee can arrange for Rock and Roll Hall of Fame tickets to be delivered to his or her room or if a guest has obviously had a rough travel day, a glass of his or her favorite wine is sent to the room.
The anticipation of needs also plays into how the hotel recognizes guests. If a guest only orders Diet Coke while dining in the hotel, wait staff will have a Diet Coke poured and brought over to the table prior to the request or even have a personalized beverage amenity in their guestroom awaiting their arrival. Even children get special attention and are offered toys during the check-in process. For guests that frequently stay overnight, milestones are recognized by the staff through cards signed by staff they have been in contact with.
The customer service provided transcends the physical product of hotel guest rooms and meals. The Ritz-Carlton strives to deliver a unique, memorable and personal experience to people visiting the hotel, making them Ritz-Carlton guests for life.
How to Reach: The Ritz-Carlton, Cleveland, (216) 623-1300 or www.ritzcarlton.com
Rock The House Entertainment was founded on the principles of concierge-class customer services. It’s that willingness to go above and beyond customer expectations that has helped build the company’s customer base through word-of-mouth referrals.
About 80 percent of Rock The House’s customer base comes from referrals, according to founder, owner and CEO Matt Radicelli. Unsolicited testimonials from customers to family, friends and colleagues have helped to increase the growing reputation of Rock The House as a customer-oriented company.
Rock The House also puts a great deal of control in the hands of its customers. Once a potential customer makes contact with the company, they are in control of the flow of information they receive and how quickly the next steps — if any — are taken. Customers may choose to have preliminary information sent to them via e-mail, elect to have an event professional come to their home or place of business for a private presentation or visit Rock The House’s facility in Oakwood, Ohio, for a personal consultation.
Rock The House takes a high-tech and high-touch approach to maintaining its superior customer service program. At every turn, the company’s staff works to keep customer interests first.
The company’s RTHLive software platform allows for a high degree of efficiency from the initial collection of a customer’s contact information, all the way to an automated post-event satisfaction survey. Every e-mail and phone call, along with other correspondence, is electronically documented to better assist all departments in serving the customer.
In addition, Rock The House has implemented a single point of contact strategy when working with customers. It minimizes stress for the customer and increases accuracy when communicating a client’s wishes, needs and preferences. Additionally, clients are provided cell phone numbers of the company’s full-time staff, allowing access to assistance outside of normal business hours.
How to reach: Rock The House Entertainment, (440) 232-7625 or www.rthgroup.com
As Seeley, Savidge, Ebert & Gourash Co. LPA has grown from its humble beginnings in Avon Lake to a dynamic and successful law firm that helps clients across Northeast Ohio, one thing hasn’t changed a bit.
The firm’s attention to detail when it comes to customer service is as sharp as it has ever been at SSE&G. Jim Pshock, founder and CEO at Bravo Wellness, can testify to that personally.
“We never get the impression that the clock is ticking or that the service we receive is fee driven,” Pshock says. “It is evident to Bravo that it is SSE&G’s mission to live up to their values of hard work, responsiveness and efficiency while consistently bringing innovative ideas to the table.”
The firm makes it a point to ensure that when calls come in, they are returned in less than a day. Technology has upgraded the firm from a tickler system of 3-by-5 index cards, but the personal touch is still as evident as ever when clients need support from the firm.
The firm’s founder, Gregory D. Seeley, wants clients to understand that the firm is working for them and that they have a right to ask questions about how that service is provided. So if they believe too much time was spent on a project, adjustments are made. If there are concerns about the way a situation is being handled, Seeley wants to hear about that too.
He’s a firm believer that when you let concerns go unaddressed; they fester and end up creating bigger problems in the long run.
Seeley says the firm has a formula that works and sees no need to change it. While he makes sure SSE&G has the latest in technology to do its work, the act of providing great customer service is truly timeless.
How to reach: Seeley, Savidge, Ebert & Gourash Co. LLP, (216) 566-8200 or www.sseg-law.com
Customer service is the biggest factor in differentiating your company from competition. The Shamrock Cos. Inc.’s CEO, Robert Troop, has driven growth at the marketing solutions provider by giving customers an experience they can’t get anywhere else.
Shamrock’s mission is to be the premier provider of integrated marketing solutions that help customers build and protect their brands, drive revenue and create efficiency using the right mix of people, services and technology. Led by this mission and powered by the ability to offer fully integrated, progressive solutions for customers, Shamrock has been bringing value beyond the products and services it offers clients.
A big way the company has done this and continues to drive customer service to new levels is through its Raving Fan Feedback System (RFF). Shamrock’s customer service is so distinguished from the competition that the company not only maintains clients as loyal customers, but it inspires them to tell others about Shamrock and the way the company conducts business.
The goal is to make every client a “raving fan.” To make the raving fan system work, Shamrock is certain to make its day-to-day performance stellar, and processes are continuously improved and the envelope in always pushed in terms of quality, turnaround time and customer relations.
Data is collected through what Shamrock calls the Problem Solving Analytical Technique (PSAT), which identifies the problem, all possible reasons, measures occurrences against possible causes, determines real root cause, implements a corrective action and monitors results to ensure the action has been effective. All results are stored in a database for any department or plant to analyze trends, events and process weaknesses.
Since implementing the RFF and PSAT systems, Shamrock has increased manufacturing on-time performance, decreased turnaround time to under seven days, increased distribution performance, decreased delivery time, and decreased customer impacted quality events.
How to reach: The Shamrock Cos. Inc., (440) 250-2186 or www.shamrockcompanies.net
The customer service philosophy of SS&G, led by its managing directors, Gary Shamis and Mark Goldfarb, is to provide exceptional service to all clients regardless of their size or profitability. Whether SS&G prepares a client’s taxes, performs an audit, or provides financial consultation, the firms strives to show every client it is committed to meeting their needs.
SS&G believes in investing in its relationships with its clients. The firm practices reciprocity for its services by engaging clients for their products and services. SS&G has a policy of working with clients before engaging outside vendors, sometimes putting aside cost in favor of giving business to its clients. Among the client products and services SS&G uses are printed and promotional material, cleaning services, copiers and interior landscaping. And SS&G recommends its clients’ products and services to others whenever appropriate.
At the start of each client relationship, SS&G provides a welcome packet to help the client become acquainted with the firm and its offerings. The packet includes a personal letter and literature about SS&G’s mission, resources available exclusively to SS&G clients and the level of service they can expect to receive. And to get to know clients outside of the office, SS&G invites them to sporting events, award banquets, and networking and social events.
SS&G has lower staff turnover than the national average, which helps ensure that its clients receive consistent service year after year.
SS&G makes a charitable donation each year in its clients’ honor to organizations with a presence in each of the communities in which the firm operates. During the most recent holiday season, SS&G made a donation to Alex’s Lemonade Stand dedicated to fighting childhood cancer. Each client received a holiday card informing them of the gesture made by SS&G on their behalf.
HOW TO REACH: SS&G Inc., (440) 248-8787 or www.ssandg.com
“Do unto others as they want you to do unto them,” is a rule that has become integrated into the fabric of Zinner & Co. and the way Managing Partner Robin Baum runs the accounting and management consulting firm.
When dealing with clients the firm is always conscious of the fact that not every client is the same and the natural or normal way of doing things may need to be altered to the various styles of different clients. The firm’s focus is to make clients as comfortable as possible in order to ensure they are happy with services and how they are provided.
While Zinner aims to treat every client as a VIP, there are always some that require a greater depth of business relationship in services provided because of their size or the volume of business they do. In addition, the firm understands that when a new client relationship is started there is only one opportunity to make a first impression. Therefore, Zinner strives to provide exemplary service right out of the gate.
The ultimate goal of Zinner & Co. staff is to connect with clients in a more meaningful way by finding out what is most important to them. This is accomplished through reaching out to clients frequently using books, literature, cards, personal communication, and gifts based on their personal interests. Whether it’s a season subscription for regional theater at the Cleveland Play House, a suite at Progressive Field to enjoy a night of baseball with clients, or a table at various not-for-profit events and benefits, Zinner wants to engage with its clients while taking in the best of local culture.
Zinner & Co. staff members also adhere to rigorous standards and undergo on-going training to maintain not only the highest possible level of technical skill, but the most satisfying client service experience possible.
How to Reach: Zinner & Co., (216) 831-0733 or www.zinnerco.com