Your “Why” Is Our “Why”
We established this business in 2018 to focus purely on employee retirement plans. Why there is a huge need, for both the Employer and the Employee….
Need
401ks, although now 40 years old, have always been the second cousin of both Company Pension Plans and/or Social Security. Today what employees put into their retirement plans (whether it’s a SEP, Simple, IRA or 401k), will form the foundation of their ability to retire. Pensions are mostly a thing of the past, mainly because companies grossly underfunded them or their expectations for returns were unrealistic. Social Security is on course for bankruptcy, so at some stage the retirement age will need to extend out, or you end up with less.
What’s even more troubling for business owners is that if you’re like me, (and/or most of the business owners I know), your SS contribution is low because you reduce the amount of W2 income you take.
Whatever the scenario, the need is greater today to focus on how employees will fund their retirement than ever before.
Fact is, most of the world has already shifted the responsibility of saving for retirement from the government programs to local employers. That shift will happen here, it’s just a matter of when.
Relationship
I will always argue that a local relationship will give greater value than you’ll get from a national organization with a call center. Someone who understands your business, both where it stands today and where it will be 10 years from now.
That does not mean that your existing financial advisor can handle it. This is specialized!!!! From the design of the plan, to the reporting, education and remaining compliant. The consequences for getting it wrong can be dire. It’s not like picking the wrong stock, the plan administrator (which in most occasions is the business owner) is legally responsible for ensuring the plan is in compliance.
Here is our Process
Compliance Review
We review all the documents that go along with your plan including the Summary Plan Description, Investment Policy Statement and fee disclosures. We also ensure plan metrics are up to industry standards.
Participant Education
We tailor an education program for your business. From online education to face to face meetings in your office.
Plan Benchmarking
Benchmarking compares your plan against other plans of your size and scale. We measure statistics such as contribution rates, participation rates, participant engagement and most importantly what your plan costs compared to the industry average. Why the fee analysis is important is that in a lot of occasions the plan pays the fees, which means your employees are all paying the expenses. This is where you can get in trouble.
Plan Design Review
The design of your plan is one of the most important components of the process. As your business grows you may need to change the structure or even type of the plan. You may be starting and just want the ability to put some tax deferred money away, or growing and need to attract/motivate staff, or looking to sell your business. Wherever you are, there is a plan that we can tailor to your situation.
Investment Policy
A huge number of plans do not have an investment policy statement. As soon as you have an employee in the plan this document can serve as one of your best liability shields. It’s not done once we create it, we need to make sure the plan is in line with the policy.
Investment Reporting & Review
It’s our responsibility to ensure that the investments in the plan are meeting their objectives on an ongoing basis. When you initially selected the funds in your plan, it was done to fit a certain market dynamic, e.g., U.S. Large Cap Growth, International Fixed income. These funds can change dynamic over time, fund managers come and go, performance drifts from the index. Our software review of these funds measures each fund on a quarterly basis against the 9 parameters we set for each fund including risk, return, manager tenure, size, inflows and outflows.
