Home>Financial Articles and Q&A>Articles>Learning From the Novant Health Retir...

Learning From the Novant Health Retirement Plan

Granite Insight

Avoid the Novant Health issue with your plan, the issue:

This hospital system breached their fiduciary duty by:

1) Allowing excessive fees to paid to the broker (DL Davis)

2) Allowing excessive fees to be paid to the record-keeper, Great West.

3) Allowing for a higher mutual fund expense ratio

The broker’s commission went from 800,000 to 6 million.

The real issue was not that Novant Health lost the case, but the actions they had to take to correct all the problems. Here are some of the many issues highlighted:

1) Hire an Independent Consultant

2) Have an independent consultant review all plan options

3) Have an independent consultant conduct annual reviews

4) Provide accurate communications to the plan

5) Adopt a new investment policy statement

6) Removing David from any involvement with the plan

7) etc…..

There were a several more tasks that Novant Health must do, but you get the point, a complete business disruption with fines and employee distrust.

What to do to make your plan a hook to keep and attract employees: hire an independent consultant, not a broker or an independent advisor who is connected to a brokerage house, but a true consultant.

Here is what to look for in a true consultant:

does not sell proprietary products; 

has defined investment process (outsourced CIO);

has a defined operational process;

will be your company advocate for a safer, more transparent, cost effective plan; 

does investment monitoring above and beyond sending a Morningstar report or fund fact sheet;

produces decipherable “investment” education for employees, in addition to retirement education;

Can access every fund available in the universe.

Please tell us what you do not like about your plan by calling Ernie Rodulfo at 203-210-7814.


Upvote (0)
Comment   |  3 years, 11 months ago