Agfa HealthCare Corporation

A division of international company Agfa-Gevaert Group, Agfa HealthCare Corporation, headquartered in Carlstadt, New Jersey, provides digital radiological imaging and imaging data management worldwide. The U.S. company’s 401(k) plan boasts a 96% participation rate and a 13.6% average deferral rate, reflecting the plan’s popularity among participants, says Kevin Wade, manager, retirement and pension (U.S.).

Over 80% of participants meet or exceed target-date fund benchmarks that track retirement readiness, he notes. Account balances average about $279,000, no doubt helped by the fact that half of participants opt for automatic escalation, and only 7% have outstanding loans.

The plan has a unique governance structure with two separate governing committees, Wade says. The benefits plan investment committee oversees fund investment options and performance, while the benefits plan administrative committee interprets and administers plan documents, plus handles any employee appeals for claims. This two-committee approach ensures appropriate focus on specific topics, Wade says.

One role of the BPIC is to manage plan costs, which it achieves, in part, by its approach to recordkeeping fees, he says. For one example, by utilizing a custom hybrid schedule and negotiating for lowest-cost asset classes for funds, the committee lowered participants’ fees by 17% to a flat monthly fee of $75, effective 2022, he says.

For another, the plan has two revenue-sharing funds, the fees of which were being used to offset general plan expenses. The BPIC decided to apply the fees to offset participants’ out-of-pocket costs instead. Participants now pay $35 out-of-pocket, with the remaining $40 funded by the revenue-sharing proceeds, Wade explains.

The BPAC, besides traditional administrative tasks, has the more unusual job of ruling on employee complaints related to retirement, health and welfare plans. If participants believe they are entitled to certain plan benefits that are being denied, the BPAC reviews the claim and can approve or reject it based on the plan provisions.

In a hypothetical 401(k) plan case, Wade says, plan recordkeeper Vanguard denies a participant’s hardship withdrawal request. The participant then submits a formal request for appeal and presents his case to the BPAC. The committee reviews the facts and circumstances, weighs that evidence against the plan provisions and applicable laws, and then provides a final determination. Participants may appeal the decision for reexamination, he says.

This approach empowers employees by demonstrating that “we’re backing all of the features in the plan and taking the time to review anything that you may believe was either unfairly or mistakenly missed by any of our vendors,” Wade says. “It’s all about empowering the employee, because we really have an employee-first-centric way of going about business here, especially on the benefits side. So, this is just in line with that.”

—Ed McCarthy