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The World’s First 401(k) Cashback Rewards Program — and the Best Door-Opener Ever

By Danny Streiff

For decades, the only “unsolvable” problem in our industry has been everyone’s most important problem: getting people to save much more so they’ll have enough for a comfortable retirement. It’s ironic that we can solve almost every plan-related issue except higher participation and contribution levels—even though they’re why plans exist in the first place (and drive, in some way, everyone’s revenue model).

So when I heard about the SaverNation program—a patent-pending, “snap on” plan design feature that lets participants use their normal monthly spending to generate automatic extra pre-tax plan contributions—I jumped up and said, “This is amazing! Finally, a real solution!”

Great, except I was at an event about “building a bulletproof 401(k) practice,” hosted by MilleniuM Investment & Retirement Advisors, and I’d just interrupted the first-ever public presentation of SaverNation by its inventor, Marc Robinson. It took Marc and a core group of industry experts — Dallas Salisbury, Bruce Ashton, John Fiore, among others — nearly seven years to meticulously resolve and successfully test the myriad complexities, from legal to technological, and to build an unprecedented coalition of key pension, payroll, retail, and credit industry players. Yet it took me only five slides to unintentionally halt the presentation and open a floodgate of excited questions and comments from the room. (Marc never got to slide six.)

What makes SaverNation a truly game-changing innovation is that it totally eliminates the painful save-or-spend dilemma facing nearly every employee. For the first time ever, everyone can contribute a lot more, every month, effortlessly, without having to sacrifice even a penny more of spending. Here’s how it works:

Employees can get cash back on purchases at more than 500 merchants’ websites, including nearly every major brand name. All employees (not just participants) are auto-enrolled, so no employee feels left out. They log in to Saver Place, click on a merchant or product, and land on the merchant’s same website they could’ve gone to directly. But by passing through Saver Place first, they’ll get 1% to 25% of their purchases as extra savings in their retirement plan. In fact, when you use SaverNation to buy the same things, from the same places, at the same (or better) prices as you currently do, you actually end up with more savings and more disposable income.

James Holland pushed for his firm, MilleniuM, to be the first RIA in the country approved to offer the SaverNation program on its platform. (Yes, you have to be approved.)

“We’re driven by putting the best interests of participants’ first,” says Holland. “We instantly saw how it overcomes the affordability problem for employees. We’re focused on redefining the way plans operate, so they’re simpler and more effective for sponsors and participants. SaverNation fits perfectly into that strategy.”

Ary Rosenbaum, the tell-it-like-it-is, forward-thinking ERISA attorney with a devout LinkedIn following, has begun building in SaverNation as an auto-feature of the open MEPs he’s been sponsoring, like the one in Florida operated by FRF Benefits (Ron Sellers & Associates), advisor LAMCO, and TPA Pinnacle.

“It’s harder and harder for sponsors to offer benefits,” Rosenbaum says. “Here’s an easy way for employers to improve their employees’ financial lives. It also offers real value to sponsors. For example, encouraging the rank and file to get in the habit of saving while they spend can directly lead to higher annual contribution limits for highly compensated employees (HCEs) in plans failing testing.”

SaverNation advisory board member, ASPPA’s Brian Graff, echoes that: “In an era of cutbacks and freezes, SaverNation provides a no-fee way to provide real value to employers. I encourage everyone to try it, because it really works.”

Allliance Pension Consultants, one of the first TPA/record-keepers to be SaverNation-approved, positions the program as a differentiator.

“Adding SaverNation to our services sets us apart from other record-keepers,” says Theresa Piotrowski who, with partner Jeff Feld, runs Alliance. “Advisors recognize we offer a more competitive plan, without more cost, that accelerates savings, especially for the young and lower income. Everyone benefits!”

Alliance’s Feld also added a slide about SaverNation into some recent finals presentations to see if it would create a differentiator. “Each time, everyone stopped to ask lots of questions,” he says. “The advisors even came up afterwards to learn more.”

In sum, SaverNation will improve ADP testing, thus helping HCEs. It helps participants accelerate loan repayments. It creates steady, higher contribution flows and larger, compounding assets under management—all the while reducing the need for an advisor’s direct plan involvement. For a limited time, SaverNation is waiving setup fees and licensing fees to plan-service professionals.

Some advisors are finding they can use the SaverNation story to open doors that have been hard to open. But to Robinson, an ex-managing director at RIA SageView Advisory Group, one of the payoffs is considerably bigger.

“Everyone’s worn down by all the new rules and regs,” he says. “When we, as an industry, finally have plans accomplishing what they’ve been created to do— solve our national retirement savings crisis—government will go looking for something else to focus on and fix.”

Danny Streiff is a national account sales executive for Reliance Trust Company in Atlanta.

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