Ann & Robert H. Lurie Children’s Hospital of Chicago

NOMINATOR COMMENTS

We believe that Lurie Children’s should be recognized as Plan Sponsor of the Year due to its vision to design a best-in-class retirement plan offering for their diverse employee groups, even during the COVID-19 pandemic, fluctuating market dynamics and several major internal projects. Each phase of the plan redesign initiative was enacted thoughtfully, including robust communication efforts that integrated printed and online materials, emails, webinars, one-on-one information sessions and more.

The efforts by Lurie Children’s have resulted in a reduction of up to 90% in recordkeeping fees, a reduction of 20% in consulting fees, a transparent fee assessment structure, a best-in-class investment menu offering and a reduction of up to 78% in the expense ratio of the QDIA. These changes will not only provide immediate benefits to participants, but will make the retirement plans easier to understand and communicate and will increase the long-term retirement readiness for each of the Lurie Children’s employees.

PLANSPONSOR: Please cite any noteworthy initiatives you have taken in the past 24 to 36 months that have produced results to improve your plan, and describe the results.

Lurie Children’s: Beginning in 2020, we launched a multi-year initiative to redesign our defined contribution plans. This effort culminated in December 2024 and resulted in a streamlined fiduciary oversight structure, the elimination of a multi-recordkeeper model, plan consolidations, a significant reduction in plan fees and a harmonized investment menu that includes a new qualified default investment alternative.

Over the years, various acquisitions, plan mergers and consolidations led to the existence of four 403(b) plans and two 457(b) plans across three different recordkeepers. The multi-recordkeeper model not only required additional internal resources for administration, but also resulted in an inconsistent participant experience, varied service offerings and investment structures, and increased difficulty in communicating with plan participants.

The following projects were sequentially completed as part of the plan redesign initiative:

• Investment consultant RFP to retain a retirement plan consultant with considerable experience and proven results working with retirement plans of similar size and complexity;
• Comparison of the plans’ provisions; assets and fund liquidity; expenses; fee assessment structures; and investment menu design and fund performance;
• A redesign of the investment policy statement to establish a baseline for the plans’ provisions and investment offerings, providing the foundation for the decisions that would be made to improve the plans;
• An investment menu redesign to quickly address topics of importance regarding investment choice and plan expenses prior to other parts of the redesign initiative commencing. This resulted in the development of a streamlined and harmonized investment menu that could be replicated across all plans, providing access to lower-cost share classes and additional investment options. Using the guidelines of the new IPS, appropriate asset classes were defined to be utilized across all plans, while incorporating sufficient flexibility to meet the investing needs of our diverse employee base;
• Establishment of a consistent fee assessment structure for each plan for the payment of all recordkeeping and administration expenses; and
• A recordkeeper request for information to help improve the administration of the plans and provide a better, more consistent participant experience. The medical center’s fiduciaries voted to move to a single vendor model. The new recordkeeping fee for each 403(b) plan was set to $35 per participant, representing a reduction in fees ranging between 22% and 90%, depending on the plan, with an average reduction in fees of 66% across all plans.

PLANSPONSOR: Is there anything else you would like to share?

Lurie Children’s: The final phase of the plan redesign initiative resulted from an internal project to evaluate and align the compensation and benefit structure for our various physician and faculty groups. As part of the full benefits restructuring, the Lurie Children’s Medical Group was established as the entity under which benefits to eligible physician and faculty groups would be administered, including the LCMG 403(b) and 457(b) plans.

This year, for our Plan Sponsor of the Year profiles, we are publishing Q&As based on the finalists’ applications and nominator comments. Responses are edited and may be paraphrased. In cases where the finalist self-nominated or, on its application, referred judges to the nomination for the answer, we have attributed those nominator answers to the plan sponsor.