Situation:
The executives of a small business are frustrated with their company’s profit-sharing/401(k) plan. The current investment manager has neglected them for years, only making the necessary annual trek out to see them and the investment options within the plan have underperformed for many years. Many of the employees have lost faith in the plan and consequently have either discontinued contributing to the plan or have pulled out altogether. The company also has begun to make their annual profit-sharing contribution into CDs at the local bank.
Solution:
THOR can assist by sitting down with the chief financial officer of the company to review and redevelop the company investment policy statement. The transition to a new custodian is an especially difficult issue. Under the direction of the previous investment manager, the retirement plan had more than 500 individual investments. By transferring the assets in-kind to the new custodian and then working closely with the custodian, THOR can assist the company in divesting the plan of all investments with no commission costs. To rebuild the employees’ faith in the plan, THOR can hold several meetings to discuss the investment approach for the new plan. THOR can meet with both the plan participants and company executives on an ongoing basis, while actively managing the company retirement plan.