Small Business Retirement Plan

Situation:

The executives of a small business were frustrated with their profit sharing/401(k) plan. The current investment manager had neglected them for years, only making the necessary annual trek out to see them and the investment options within the plan had underperformed for 4 years. Many of the employees had lost faith in the plan and consequently had either discontinued contributing to the plan or had pulled out altogether. Additionally, the business had begun to make their annual profit sharing contribution into CDs at the local bank, preferring to go the safe route.

Solution:

THOR Investment first sat down with the chief financial officer of the business and reviewed and redeveloped their investment policy statement. The transition to a new custodian was an especially difficult issue. Under the direction of the previous investment manager, the retirement plan had more than 500 individual investments in the plan. By transferring the assets in-kind to the new custodian and then working closely with the custodian, THOR was able to divest the plan of all investments with no commission costs whatsoever. To rebuild the employees’ faith in the plan, THOR held several employee meetings to discuss the investment approach to the new plan. Many of the employees decided to begin contributing to the plan again, which also benefited the highly-compensated employees who had been contributing for years. Today, THOR meets with both the plan participants and company executives on a quarterly basis, while actively managing the company retirement plan.