What’s the Problem?
Luxottica HR team is based out the U.S office handling a Canadian Pension Plan. They had issues understanding the Canadian Marketplace and pension rules. What worked in their US pension plan may not have necessarily work in Canada. Being out of country also led to service issue with the current record keeper. Which led to errors in reporting and payroll issues.
Luxottica employees had received only minimal support from the record keeper. Being a retail environment, employees are not in one location but scattered across the country in multiple retail locations. Face to face employee sessions were not possible for the rollout to the new record keeper. This meant that many employees did not fully appreciate the magnitude of the company contribution.
Outdated Enrolment Process
The paper-based enrolment process was cumbersome and time consuming. Many eligible employees simply ignored the free money being offered by Luxottica.
What were we asked to do?
Luxottica appointed Penmore Benefits Inc. as plan consultants in 2013 after identifying gaps in overall management of their Defined Contribution Pension Plan (DCPP). They expressed their concerns with the service issues and wanted Penmore’s opinion on the Retirement landscape.
What did we actually do?
Penmore Benefits Inc. identified the following objectives
- Initiated a full review on current plan design, investment offering
- Increase employee engagement
- Increase plan participation
- Simplify the investment line-up and enrolment process
In the months that followed, Penmore Benefits Inc. initiated a comparative analysis on plan design, investment offering and plan demographics. As a result of this review, the following was determined:
- Change of record keeper- RFP was sent to all carriers with client specifications and each carrier was reviewed based on competiveness, technology, websites, and service teams.
Penmore recomended to invite 3 out of the 5 carriers for a finalist presentation.
Penmore arranged for the Luxottica team to fly to Toronto and hosted the presentations. Luxottica made decision to move carriers with an effective date of January 1, 2016
- Recommended a Change of product from DCPP to RRSP/DPSP based on the company objectives. It was very important to the pension committee to incorporate a 2 year vesting schedule which was not possible in a DCPP due to recent changes to legislation. Luxottica has very high turnover due to the nature of their business and therefore wanted to incorporate a 2 year vesting to retain employees. Penmore Benefits Inc. looked at alternatives that would best fit with objectives of the company and recommended a RRSP/DPSP
How did it work?
Once it was determined that Luxottica would transition to a new carrier a 10 month implementation started. Bi-weekly calls/ meeting were scheduled with the new carrier, Penmore and Luxottica team. The focus was for a seamless transition for employees. A comprehensive employee campaign via mail to home addresses was created. Postcards, transition guides and booklets were created and sent to home addresses over a period of 3 months. Employees were asked to enrol online though a customized transition web portal which was created specifically for the Luxottica. The guide outlined the steps that each employee needed to take, a fund mapping schedule was provided as well as step by step information on how to enroll online. In addition, postcards were sent to all other employees who were not participating promoting the plan, as well as encouraging them to engage, enroll and participate.
Penmore Benefits Inc. encouraged employees to book one on one sessions by calling a 1-800 number where Penmore enroled them into the plan using the online enrolment, provided assistance in selecting investment and answering any questions on the transition to the new record keeper. In a 2 week period Penmore Benefits Inc. enrolled 369 employees giving them personalized recommendations and guidelines.
How do we measure it?
As part of Penmore Benefits Inc. governance program, a comparative analysis was undertaken, benchmarking carrier services and fees relative to its peers. As a result of negotiating power of Penmore Benefits Inc, Luxottica was able to add full service consulting and member level advice to the plan while benefiting from fee decreases for plan members.
On average, Investment Management Fees were reduced by 10% saving the plan member thousands of dollars per year.
Ongoing, Penmore will provide Luxottica with a detailed analysis of their program providing them with an annual education strategy and a review of their investment line-up.
Penmore Benefits Inc. is a consulting firm specializing in providing retirement and benefit plan management, focused on maximizing the return on your investment in benefits.
Penmore Benefits Inc. has earned a solid reputation over the years for providing effective solutions at affordable pricing, wrapped with the highest standards of personalized customer service. We take great pride in consistently delivering excellent service and advice, and our highly respected reputation is taken very seriously throughout our industry.