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!

Refreshing a Stale 401k Plan


Problem Encountered

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.


ABG Solution

We redesigned the plan to include auto enrollment and auto escalation and increased the matching contribution. We replaced the basic fund lineup with asset allocation models designed by an advisor, and showed participants how to become more retirement ready. A Blackrock service, called Future in Focus, played an important role also. As a result of our efforts, we won this $46 million plan.


Best Practice Learned

  1. Brand name solutions don’t always include the proper plan design, especially when they are not local to the plan sponsor, as we were.
  2. Advisors can generally provide better investment alternatives, including asset allocation models, than target date funds.

More Like This

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.