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

03/17/2017

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

All Plans Need an Annual Checkup

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.

Watch Your Matching Contributions!

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.

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.