Each month, NAGDCA turns the spotlight on one of our members to highlight the incredible work they’re doing to secure the retirement future of their public sector employees. Members are selected from our Leadership Award nominations and spotlights are shared as a part of our ongoing Resource Digest series.
Continuing on a Mission of Continual Improvement
In 2018, the Anchorage School District (ASD) renegotiated and renewed the contract with their 403(b) plan service provider. This seemingly routine act of business marked a significant milestone in a decade-long success story of helping participants build retirement readiness and providing one of the lowest cost, highest quality defined contribution plans of any school district not only in Alaska, but the entire country.
Ten years prior, following the 2009 403(b) plan regulation changes, ASD made the decision to consolidate their more than forty vendors to a single provider. The District found that the use of multiple vendors was confusing for participants as well as an administrative challenge for staff. When communicating with participants, staff had to focus more on answering countless questions on the differences between plans rather than educating participants on core topics like saving more, asset allocation, account management, and distribution options. “The District’s vision at that time was that an ongoing collaboration with a single partner would ultimately lead to a better Plan, and that vision continues to be realized,” ASD shared in their 2019 NAGDCA Leadership Award nomination.
The 2018 contract renewal showed that ASD’s decision ten years ago to consolidate services lead to an increase in negotiating leverage. Some of the upgrades that came with the new contract included:
- a reduction in administrative fees
- the addition of beneficiary recordkeeper services including online access for participants to view and update beneficiary choices
- a 100% increase in services days available from the provider’s local Retirement Plan Advisors
The administrative enhancements have contributed to the improved retirement readiness of of their participants as evidenced by a steady increase in enrollments which is now 21% higher than in 2017, and a 30% increase in average plan contributions with 35% of participates saving in excess of 10% .
“Our experience is a case study in the benefits of consolidation of a multi-vendor 403(b) environment to a single-vendor approach and the continual enhancements of plan features in the best interest of participants. We are proud of our achievements on behalf of our participants and feel our results may be a model for other districts that want to keep administrative and investment costs low without compromising plan features and benefits. A similar consolidation project is highly feasible for other school districts, assuming a close collaboration with a single vendor and strong negotiating tactics to keep fees in check and secure ongoing improvements in plan features.”
NAGDCA Member Spotlights are developed as a part of our Resource Digest series. Each month we highlight a new topic and share relevant information and resources in our e-newsletter, NAGDCA Now, and in the News & Articles section of NAGDCA.org. Click below to view the January Resource Digest on Participant Services.