News

Here you’ll find all news stories and commentary by our Contributors, with the newest item at the top.

Guardian Replaces Head of Retirement Sales

Guardian Life has hired industry veteran Stephen Davis to run sales at their retirement plan division, replacing Dale Magner, who departed earlier this year. Though Guardian has been on a hiring spree over the last few years under Magner, like many providers they have struggled in a market where there is low record keeper turnover. Price pressure and low turnover are forcing even the largest DC record keepers to retool, acquire or rethink their sales and marketing strategies. The hiring of Davis shows that Guardian has not thrown in the towel — which many suspected when Magner left — but no one believes that it’s a panacea.   Read More

A Perfect Storm

Batten down the hatches — a perfect storm lies dead ahead. Election-year politics, a struggling economy, a gargantuan federal budget deficit and the push for tax reform will combine soon, and will create a challenge for the retirement planning industry that we haven’t seen since 1986. That’s the bad news. The good news: ASPPA, NAPA’s sister organization, is already engaged in the task of getting a simple message across to Congress: Don’t try to fix the economy at the expense of millions of Americans who are trying to save for their retirement.   Read More

RAC Releases an Advisor RFP for Plan Sponsors — Providing a Great Prospecting Tool

RFPs are used by fairly few plan sponsors searching for a new advisor, perhaps partly because there was no industry sponsored RFP template for plan sponsors to use — until now. The Retirement Advisor Council (RAC), led by industry market research professional Eric Henon and a group of industry experts including advisors, providers and broker dealers, has made an RFP template and protocol available. Why would an advisor want plan sponsor clients or prospects to go through an RFP process? Because the more educated the client or prospect is, the better an experienced advisor will appear. For example, RAC’s RFP template lists a fairly comprehensive litany of advisory services which less experienced advisors will be hard pressed to match. This makes the template a wonderful prospecting tool.   Read More

Watching Wholesalers to Predict Consolidation and Business Health

Most experts are predicting massive consolidation among DC record keepers, with the big push just about to begin — especially with four national record keepers representing more than 100,000 DC plans likely to change ownership in the next few months. The factors in favor of consolidation are mounting. So how can you identify which providers are likely to sell their businesses or will not be able to remain viable?   Read More

Upcoming Webcasts on Disclosure Notices

You may want to put one or both of these upcoming disclosure-related webcasts on your calendar: “What Plan Committees Must Do with 408(b)(2) Disclosures,” featuring Fred Reish and Bruce Ashton of Drinker Biddle; and “404a-5 Revisited – Opportunities for Advisors”, from NAPA. The Drinker Biddle webcast, coming up this Thursday, Oct. 11, is free to all. The NAPA webcast, set for Oct. 16, is free for NAPA members.   Read More

Everything You Wanted to Know (and Maybe What You Don’t Want to Know) About Stable Value

As stable value investments become more popular in DC plans — falling somewhere between money market funds, where returns are low but so are risks, and mutual funds, where both returns and risks may be higher — advisors need to understand how stable value works. In a simple but comprehensive article, an advisor gives an overview about how GICs and stable value works — explaining, among other things, the difference between funds held in a general account and subject to general creditors vs. separate accounts as well as the various hidden costs above and beyond management fees. The author raises the question of whether these fees are subject to the 408(b)(2) and 404(a)(5) fee disclosure rules and opines about the future of stable value funds given the real possibility of rising costs resulting from lower interest rates.   Read More

Are More Americans Covered by Company Sponsored Retirement Plans Than We Think?

An Investment Company Institute study released last month, “Who Gets Retirement Plans and Why, 2011”, found that nearly three-quarters of those likely to save for retirement have access to a retirement plan through their employer or their spouse’s employer. Of that group, 93 percent participate. And according to the September edition of “Beyond the Numbers,” a U.S. Bureau of Labor Statistics monthly publication, access to retirement plans differs significantly by occupation, union status and wage level, among other characteristics. For example, the 78.7 million people without access to their own work-based retirement plan includes 61.1 million private-sector workers — but 12.7 million people in this uncovered group are self-employed and 153,000 say that they work without compensation of any type. Of the 52 million people who work for companies that don’t sponsor retirement plans, just 9.9 million, or 19 percent, don’t have access to a plan through their spouses’ employers, the ICI study found.   Read More

Quick Reference Guide for Participant Notices

Plan sponsors are required by the IRS and/or the DOL to provide notices to eligible employees and plan participants at specific times of the year related to the status of the plan or the participants’ accounts. A list from by Baden Retirement Plan Services (an Ascensus company) provides a quick reference — not a complete list — of notices that a plan sponsor should provide to participants.   Read More

Borzi: Public Plans Should Follow Private Plan Disclosure Rules

At the annual National Association of Government Defined Contribution Administrators (NAGDC) conference in San Diego, Phyllis Borzi, head of DOL’s Employee Benefits Security Administration, opined that public plans should follow private plan disclosure rules even though she has no jurisdiction over them. Borzi cautioned administrators about people trying to separate plans from their money and the difference between lifetime income and annuities — all while mourning the demise of (and attack on) DB plans.   Read More

Trends in Outsourcing Have Led to Open MEPs – What’s Next?

Mike Montgomery, an advisor and industry thought leader on MEPs (and NAPA Net’s MEP Conductor), reviews the trends in outsourcing that led to today’s open MEPs, and projects where the market might be headed in light of the 2012 DOL restrictions and the advent of 3(16) administrative fiduciaries. Plan sponsors have outsourced an increasing number of duties and liabilities as they try to back away from managing their 401(k) plans — but given the recent enactment of state-run MEPs, will this trend eventually lead to the nationalization of small-business retirement plans?   Read More

Women Eclipse Male Wealth Managers in AUM

Female wealth managers now manage an average of 5% more assets than their male counterparts, according to Fidelity’s 6th annual Broker and Advisor Sentiment survey. Behavioral finance research shows that women take less risk than men and are more realistic, while men tend to be more confident and optimistic. Women make up less than 10% of plan advisors, so advisor firms and broker dealers may be wise to recruit women to help plan sponsors and their participants with financial planning — not only to distinguish themselves but also to gather more assets.   Read More

Financial Finesse Releases Its Second Annual Retirement Preparedness Report

The firm’s second annual study finds that employees are making some positive changes to their retirement planning, but poor money management skills and long-term economic challenges present major obstacles. With looming increases in health care expenses, taxes, inflation and life expectancy  coupled with decreases in government and corporate retirement benefits  more employees are taking plan loans and making hardship withdrawals. Sounds like a recipe for disaster.   Read More

Is There a Silver Lining for State-Run MEPs?

Are state-run MEPs a potential boon for plan advisors? Though there is concern about the government trying to nationalize small-business retirement plans, would state-run plans actually be an opportunity for advisors? Jamie Kalamarides, SVP at Prudential, suggests in an interview that there could be a silver lining in these state initiatives. But small-business DC plans are sold — primarily by advisors and payroll companies — so it is doubtful that a “build it and they will come” mentality will be effective unless state-run retirement plans are made mandatory, which is harder to enact and raises a whole host of other issues.   Read More

Using Google Alerts

Social media maven (and NAPA Net Conductor) Sheri Fitts explains how advisors can use Google Alerts to proactively keep them informed on relevant topics or news about clients and prospects. Google Alerts are easy to use and set up, but the really good news is that there are no compliance issues. Look for more helpful posts from Sheri and visit her NAPA Net forum, Social Media Strategies – she’s a fount of helpful, insightful information.   Read More

Obama or Romney? Red or Blue? What’s the Likely Impact on Advisors?

As you may have heard, there’s an election coming up in about a month. In a video shot just before the first presidential debate, NAPA’s Executive Director and Washington insider Brian Graff explains his take on the presidential campaign as it enters the stretch run, the likely political balance in the House and Senate, and what it all may mean for plan advisors.   Read More

408(b)(2.0) – The Next Steps for Plan Advisors

Finally, after months — perhaps years in some instances — of preparation, diligent providers of services to retirement plans have now completed their disclosures in satisfaction of ERISA Section 408(b)(2) and they lie in the hands (or at least the inboxes) of the responsible plan fiduciaries. The final deadline, July 1, has passed. While that milestone may merit a collective sigh of relief, the work is just beginning for the service providers that delivered the disclosures and the plan sponsors that received them. It is critical that both develop sound protocols to maintain compliance and to be prepared for what lies ahead.   Read More