Presentation on theme: "1 NYU Benefits Defined Benefit Plan Administration Efficiency Solution for 2010 and beyond April 30, 2009."— Presentation transcript:
1 NYU Benefits Defined Benefit Plan Administration Efficiency Solution for 2010 and beyond April 30, 2009
2 Current State Plan Administration, communication and compliance is handled in the NYU Benefits Office Actuarial funding and accounting valuation work is handled by Mercer; in addition Mercer audits benefit calculations when a person will receive a payment from the Plan JP Morgan Chase is the trustee and administrator of retirement benefit payments PWC is the plan’s auditor
3 Processes which are moving from NYU to JP Morgan Communication of the plan to Participants Customer service support for active participants, terminated participants, retirees Online benefit estimates via employee self service replace calculations by NYU staff Online verification by employee of service history Loading the retirement elections onto JP Morgan’s retiree payroll QDRO Administration RMDO notification and explanation 5500 filings PBGC Premium filings Data extractions for actuarial valuation and benefits studies Data extractions and records provision to auditors Explanation of audit anomalies Summary Annual Report Providing employees with benefit election forms Review of benefit election forms for completion and accuracy Schedule SSA preparation for 5500 Death audit Missing address location search Staff time Savings = $89,950 / year
4 Processes which are moving from Mercer to JP Morgan No further need to have Mercer verify actuarial calculations Savings = $150,000 per year
5 Additional efficiency gains Provides benefit statements to employees and terminated vested participants in a self service environment; currently statements are provided upon request only. Reduction in benefit calculation error risk; reduces liability of NYU. Administration of all defined benefit plan participants across all NYU DB plans will enable more accurate tracking of vesting and benefit service within the controlled group, reducing legal liability. Tracking service and hours on JP Morgan Chase’s Pensmart platform might serve as a repository of information for other workforce planning needs.
6 Conversion cost Best case scenario (data build is fully automated): $178,000 implementation cost is recovered fully in year 1 with $61,950 additional savings (Mercer save + staffing save less implementation cost). Worst case scenario: (Many records must be manually corrected): $300,000 implementation cost recovered fully recovered in year 3. Year 3 save = $ 49,650.
7 Post- Implementation savings After “go live”, fee is $50 per participant per year Based on current participant count of 3702, annual cost = $185,100 per year ongoing; this is fully chargeable to the Staff Pension Plan trust fund Price guarantee: 5 years Annual savings = $54,850