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!

Doctor Group Mergers


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. Incredulously the other four groups all had just safe harbor 401k plans, and one had a cash balance plan with only one year of contributions. The other four plans had been serviced by two name brand mutual funds, an insurance company, and an independent recordkeeper.

So after analyzing all the proposed benefit structures, the super group chose ABG to service the new plan(s) going forward after the merger.

ABG Solution

We created new 401k plans and cash balance plans for the new group as of 1/1/17. We kept their current 401k/profit sharing plans open to give them some greater flexibility in 2017. But more importantly, there have been $7 million in new contributions to the 401k and cash balance plans as of 2/28/17! And we’ve designed the plans to allow for additional medical groups to join the corporation and participate.

Best Practices Learned

  1. Even though a so called ‘brand name institution’ may be servicing a plan, that does not mean the plan is designed properly.
  2. Don’t assume all medical groups have the properly designed plans for their makeup!
  3. Look to an ABG firm for cash balance pension plan consulting for any professional type group (doctors, lawyers, accountants, engineers etc).

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Financial Wellness, A Fad or Indispensable?

Every two to three years, a new buzz word is embraced by the retirement plan industry. For the last two years that term has been “Financial Wellness” and it is most likely here to stay.Financial Wellness is an all-encompassing term to mean a comprehensive collection of tools and education provided to the employees in the workplace. The tools can be varied, but include at a minimum: an assessment tool, education, calculators, videos and articles.

Trash Hauler Replaces Some Wasteful Funds

One of the nation’s ten largest waste haulers had a $70 mm dollar 401k plan and a $45 mm Defined Benefit Plan. After an outside advisor warned the sponsor they might be paying too much in their overall fees, they decided to put the plan out for bid and ABG was asked to respond. The plan had an advisor and was using a top 10 institutional recordkeeper. We received the RFP as an independent recordkeeper.

All Plan Designs Are Not Perfect…

We ran into a 401k plan sponsor who had been routinely refunding over $30,000 in plan contributions made by their highly paid group. We met with the Advisor and sponsor to obtain their objectives in sponsoring the plan, and what they hoped the outcome could be.ABG SolutionBy focusing on the top 20% of highly paids as opposed to just the defined term “Highly Compensated Employees”, we were able to reconstruct the plans formulae and eliminate the refunds.