Case Study Example

The Sample Independent School had the following data regarding its 403b Retirement Plans:

  Defined Contribution Plan Tax Deferred Plan
Plan Assets $17,000,000 $9,000,000
Annual Employer
& Employee contributions
$700,000 $350,000
Plan Participants:    
Active 105 90
Terminated 45 30
Total 150 120


The Sample Independent School currently uses the following service providers:

Provider Service
TIAA CREF Record keeper & Custodian
Vanguard Record keeper & Custodian
Smith Law Firm Legal Advisor
Jones Third Party Administration Firm Compliance Testing and preparation of forms 5500 and 8955-SSA
CPA Auditing Firm Year End Plan Audit


In order to fulfill its Fiduciary responsibilities with respect to their 403b retirement plans the following steps were taken by Sample Independent School:

• Formed a retirement plan committee “RPC” who was responsible for the overall management and administration of the retirement plans. Each committee member is a Plan Fiduciary.

• The RPC decided to merge the existing defined contribution and tax deferred plans into one plan based upon the recommendation of the Jones Third Party Administration Firm. Jones TPA Firm drafted the plan merger amendments and the new merged plan document. The Smith Law Firm also reviewed the amendments and plan document for accuracy and compliance as Legal Advisor. The plan merger reduced the CPA Auditing Firm fees.

• The RPC hired an Investment Advisor that performed the following functions:

   • Developed an Investment Policy Statement for the Plan

   • Performed a Due Diligence Fund Analysis and Review for the existing investment options available to plan participants

   • Investment Advisor recommends to replace some of the existing investment options that failed the due diligence review with better performing funds using open architecture.

• Based upon the above, the RPC decided to use TIAA CREF as the sole record keeper and custodian under one platform. This platform will include investment options that passed the due diligence review including TIAA CREF funds, Vanguard funds and various other mutual funds from outside fund families.

• This decision was based upon receiving fee quotes from other record keepers and custodians that could offer open architecture to 403b plans.

• TIAA CREF as sole record keeper and custodian will charge a gross plan asset wrap fee of 0.40% reduced by a plan service revenue sharing subsidy of 0.22% resulting in a net plan asset wrap fee of 0.18% charged against plan assets on the new platform.

• The Investment Advisor will continue to monitor and recommend the plan investment fund options for plan participants and prepare a due diligence fund analysis and review on a semi-annual basis. The fee for this service will be $12,500 and include participant education and communication.

• The RPC decided to hold participant meetings to communicate and educate plan participants about the new open architecture fund enhancements including how to access and transfer existing funds. The RPC hired Jones TPA Firm to conduct these meetings in conjunction with the Investment Advisor. The fee for this service by Jones Third Party Administration Firm will be $6,500.