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ABG: Helping America Retire

Best Practices In Retirement Services

This blog is designed to showcase the expertise of Alliance Benefit Group (ABG) through its recordkeeping, consulting and compliance services. Delivered locally to retirement advisors and plan sponsors. All blogposts are derived from actual client situations. Enjoy!

All Plans Need an Annual Checkup

06/16/2017

PROBLEM ENCOUNTERED

An ABG recordkeeper discovered a 7 person law firm retirement plan that had a broker collecting 12b1 fees and churning high priced mutual funds at over 100% annual turnover. The plan’s investment performance had underperformed the S & P by over 500 basis points over the past six years. And the broker was not performing its tasks as a Fiduciary.

 

ABG SOLUTION

We brought in a 3(38) Advisor who utilized open architecture to select new funds and moved totally away from 12b1 fees and commissions. Our new Advisor signed on as the Plan Fiduciary. The ABG firm moved them to a daily recordkeeping approach. Today, this plan has over $4 million in assets and is saving 50 basis points in fees versus the prior approach, and has beaten the S & P averages the past two years. The law firm is able to focus on practicing law and building their business, while the Plan Fiduciary Advisor is able to manage the plan on behalf of all the participants.

 

BEST PRACTICE LEARNED

Just because you have a group of professionals, albeit lawyers, who have a retirement plan, it doesn’t mean it’s always been set up properly. ERISA and retirement plan work is very specialized, so plan sponsors are better off finding a bona fide experienced expert Advisor and bona fide experienced expert consultant and recordkeeping firm. You may think you have the best plan possible, but all plans need a checkup periodically to make sure you’re keeping up with industry standards.

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Problem encountered – we were brought into a plan situation by a new CFO who had discovered issues with their prior plan provider. There was an Advisor who was not a fiduciary, an insurance company recordkeeper, and a Third Party Administrator.

Refreshing a Stale 401k Plan

Mar 17, 2017

We received an RFP from a manufacturing plant owned by a foreign based company. Their HR team had totally turned over in the midst of our proposal opportunity. They were being serviced by a name brand mutual fund, but it had no advisor. They had mostly target date funds, low participation and low contribution rates.

Doctor Group Mergers

Mar 9, 2017

Problem Encountered – We had a longstanding client relationship with a 12 partner Orthopedic group. As is happening in the health field, they wanted to merge practices with four other Ortho groups to form a super group with 50 partners. We had established a 401k plan and a cash balance pension plan for our group, and the partners were projected to end up with $2.5-3.0 million in each of these plans by retirement.