Corporate 401(k) >$50MM–$100MM

Rumberger, Kirk & Caldwell, P.A.

Margaret Herod
Director of Finance
  • Plan(s)
    401(k)/profit sharing
  • Total Plan Assets
  • Number of Participants
  • Participation Rate
  • Average Deferral Rate
  • Default Deferral Rate
  • Default Investment
    Target-date fund
  • Automatic Enrollment
  • Automatic Escalation
    at 1% a year up to 10%
  • Provider(s)
    Recordkeeper, Transamerica Retirement Solutions LLC; adviser, Cerity Partners (formerly Blue Prairie Group)
  • Financial Wellness Educator(s)
    Cerity Partners

The firm is working toward 100% of employees having named a beneficiary, after the percentage dipped to 17% in December 2018 and an employee’s unexpected death created an unfortunate situation.

The catalyst to work toward improving the retirement plan at Rumberger, Kirk & Caldwell, a trial law firm in Orlando, Florida, was failed ADP [actual deferral percentage] testing resulting in refunds to the firm’s highly compensated employees (HCEs), says Margaret Herod, director of finance.

“While searching for solutions, I read ‘Save More Tomorrow’ by Shlomo Benartzi and shared his ‘Ted Talk’ with our committee,” Herod says. “The committee agreed that we needed to modernize our plan, and we hired Ty Parrish with Blue Prairie Group [now Cerity Partners] to lead us through an assessment process.”

The firm changed its match to 50% of participants’ first 6% of contributions, she notes. It had been a 3% match with a $1,000 cap. “Not very enticing,” she says. “But the nonelective profit sharing was higher. The problem was, our plan was set up to not encourage people to save much for retirement.

“I looked back at some of our data prior to the conversion,” Herod says. “We had an extremely high number of our workers not saving anything, which is why we moved to automatic enrollment at a 6% deferral rate.”

Other accomplishments of the plan, Herod says, were eliminating revenue sharing and bundling the plan’s recordkeeping and third-party administration (TPA) services. The firm also outsourced daily activities previously handled in-house. All together, she says, these efforts reduced the plan’s cost by 40%.

Parrish helped the plan streamline the number of investment options from 35 to 18, while increasing diversification.

The firm also implemented automatic increase to coincide with mid-year salary increases. All participants deferring less than 10% are increased by 1% each year.

“Very few participants reduced their deferral rates after the increase,” Herod notes. “This behavioral finance stuff works!”

Rumberger, Kirk & Caldwell also added participant education days, with a combination of in-person and video presentations, and personal meetings with an adviser. “The education program is evolving, and I have great hopes for increased engagement,” Herod says.

“My next project is to reach the 100% updated beneficiary designation,” she continues. “We had an unexpected death in our firm this year and found that the person’s beneficiary designation was not current. This very unfortunate situation inspired me to launch a campaign encouraging participants to update their beneficiaries. Last May, 40% did not have a current beneficiary, and by December that was down to 17%. I shared the experience with Transamerica, and they modified their standard participant quarterly statement design to show the name of the beneficiary.”

Lee Barney
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