Case Study

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Plan Assets: $2,149,179
Number of Participants: 97
Industry: Construction
**information as of September 2012
What is the situation?

The client was frustrated with their plan provider because they were failing nondiscrimination testing on an annual basis. In addition to this issue, the plan was over 120 participants and thus audited every year.

Since the plan provider was running testing and census information without reviewing it for potential savings, these two issues cost the plan and its highly-compensated employees (HCE) money. Due to the plan’s nondiscrimination testing failures, its HCE’s either had to have money returned to them or the plan had to contribute additions to its non-highly compensated employees (NHCE) to raise their benefits. In the end, either the HCEs had to lose money for their retirement savings or the employer had to put more money into the plan.


How did Heartland fix it?

Issue #1:
The plan was audited on an annual basis .

We started by adjusting eligibility from immediate to requiring six months and 500 hours. We also removed the automatic enrollment feature. The prior provider was not forcing out terminated employees with balances below $5,000. We instituted an automatic rollover of these balances out of the plan. Through these actions, we were able to decrease the pool of eligible employees below the minimums for an audited plan.

Issue #2:
The plan was failing testing on an annual basis.

We tested gross compensation as opposed to eligible compensation. Many providers will simply push a button and run testing based on collected information. We analyze the document and payroll information to assist clients in achieving their objectives. Our team includes experienced compliance and document personnel (ERPA, JD, QPA, several QKAs) to look beyond the textbook numbers and look for innovative solutions.


Two Benefits to the Client
  1. Because of our proactive and attentive measures, our new client saved approximately $7,000-$10,000 in annual auditing expenses.
  2. Their HCEs were able to contribute more into their personal retirement plans without being reliant on NHCE behavior.

Headshot of Stacie DunkinIt's like the fundamentals of baseball - you have to do the little things right every time to be successful.
The steps we took for this client are not major changes, but they are just the little things that we do right, every time."

- Stacie Dunkin, Senior Retirement Specialist