--- title: 401k Success Story | McClone description: Learn how a company reduced plan fees and risk by implementing a new plan. --- [![McClone Insurance Group](https://www.mcclone.com/hubfs/2018/logos/mcclone_logo.svg "McClone Insurance Group")](https://www.mcclone.com/) [![TALK WITH US](https://no-cache.hubspot.com/cta/default/3851480/04819aae-69bf-48a6-b3ea-7c86cf4f769b.png)](https://cta-redirect.hubspot.com/cta/redirect/3851480/04819aae-69bf-48a6-b3ea-7c86cf4f769b) ** ** Menu ** ** [![CAREERS](https://no-cache.hubspot.com/cta/default/3851480/7d13cf3f-f008-45d8-8376-c6ee466cddaa.png)](https://cta-redirect.hubspot.com/cta/redirect/3851480/7d13cf3f-f008-45d8-8376-c6ee466cddaa) [![CONTACT US](https://no-cache.hubspot.com/cta/default/3851480/0cc026bf-7486-468b-b04a-b6d3ae7a1059.png)](https://cta-redirect.hubspot.com/cta/redirect/3851480/0cc026bf-7486-468b-b04a-b6d3ae7a1059) [![McClone Insurance Group](https://www.mcclone.com/hubfs/2018/logos/mcclone_logo.svg "McClone Insurance Group")](https://www.mcclone.com/) [![TALK WITH US](https://no-cache.hubspot.com/cta/default/3851480/1e6ffece-c583-46d8-bc53-c321647324ea.png)](https://cta-redirect.hubspot.com/cta/redirect/3851480/1e6ffece-c583-46d8-bc53-c321647324ea) ** ** # How Potential 401(k) Compliance Violations Put One Company at Risk [How We Do It](https://www.mcclone.com/401k-success-story#theprocess) ## The Story Every good company wants what’s best for its employees while still protecting its bottom line. Such was the case for one professional service firm in Wisconsin. The employer provided a retirement plan as part of its benefits package and thought it was the best it could do because the existing advisor reportedly specialized in 401(k) plans and was associated with a large, competitive firm. The client worked with that advisor for 10 years and the same recordkeeper for more than 20. Unknowingly, however, the existing advisor only did the bare minimum to manage the plan and run diagnostics, resulting in poor fund performance. While the client’s investment committee was well-intentioned, the members had little investment knowledge or HR background, and **they were completely unaware the plan also had exorbitant fees and was likely in noncompliance** with federal regulations. If a disgruntled employee filed suit or a DOL audit was performed, there could have potentially been a costly settlement and significant fines. McClone approached the client and offered a complimentary audit of their 401(k) plan. While uninterested at first, McClone’s fiduciary-oriented and fee conscious approach was appealing and piqued the client’s curiosity, so they agreed to a review. When the results of the analysis were presented, **the client was surprised to learn that their plan would likely face increased scrutiny if anyone were to look**. Reduction in Employee 401(k) Plan Fees ## RiskMAP Results At first, because of the long-term relationship, the client wanted to stay with the existing recordkeeper. After four months of trying to work with the recordkeeper to bring fees down and address compliance concerns, however, McClone assisted the client in putting the plan out for live bid to four competitors for comparison. When the results came back, a new plan was chosen that **reduced plan fees by an astonishing 35%**. McClone also helped the client develop proper protocols, processes and documentation in an effort to ensure compliance going forward. Not only is the client thrilled to know they’re more prepared to manage compliance concerns; they’re equally pleased to know their employees are benefiting from lower plan fees.  ** ### “Without McClone, we could have experienced a lot of legal issues because of noncompliance, not to mention the headaches that go along with it.” ### RiskMAP: a process to uncover risks and better position organizations for success ** #### Identify A leading professional service firm in Wisconsin that prides itself on a family atmosphere and culture of integrity, quality and success didn’t even realize its 401(k) benefits plan had several compliance issues. Despite having worked with the same recordkeeper for more than 20 years and an advisor for 10 years, the company was unknowingly at great risk of corrective actions from the Department of Labor (DOL) or potential litigation. ** #### Develop After agreeing to have McClone provide a complimentary review of their 401(k) benefit plan, a fiduciary audit was conducted. Plan fee and fund performance benchmarking with similar client profiles were also conducted. While all areas revealed deficiencies, extremely high fees and a failure to heed fiduciary requirements from the DOL topped the list of compliance issues. Internal processes were also evaluated and revealed outdated investment policy statements. ** #### Monitor McClone routinely meets with the client to discuss the company’s goals and help the client ensure that the 401(k) plan provides the greatest benefit to the organization and its employees. Independent guidance is provided on an ongoing basis with the goal of remaining in compliance, and proprietary auditing tools and benchmarking are routinely performed and backed up with repeatable and documentable processes. ** #### Implement McClone was charged with trying to help the client fix the existing plan and worked on the client’s behalf with the client’s recordkeeper in an attempt to bring fees down. Ultimately, with the guidance of McClone’s advisors, the client understood the need to seek other options. As a result, a new plan was put in place with optimized investment options, which **reduced plan fees by 35%**. An investment policy statement is now in place that ensures proper rationale for choosing investments in the plan, and necessary steps are taken to ensure that the “prudence and loyalty” obligations of the sponsor to participants is documented and organized. ** ### “While we were hesitant to make changes, it turned out that adopting McClone’s recommendations was the right move for our company and our employees.” ## Secure your company’s success with your own RiskMAP™ today! Like this? Share this to a coworker, boss, or friend. 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