Clark Consulting Rolls Out New Deferred Comp Solution for Mid-Market

Clark Consulting, Inc., has rolled out a new deferred compensation offering for mid-market companies.

“One of the questions often posed by mid-market companies has been ‘why can’t we take advantage of these tax-efficient benefits large corporations have been enjoying for years?’,” said Tony Laudato, vice president, Product Development and Innovation at Clark Consulting.  “The response, in most cases, is that up until now it often has been cost prohibitive,” he said.  

Clark’s response is the launch of “R3,” a packaged solution combining a voluntary non-qualified deferred compensation (NQDC) plan with informal funding via corporate-owned life insurance (COLI).  

According to the announcement, costs traditionally have been too high for mid-sized companies because NQDC plans are a highly specialized discipline, often used in conjunction with COLI. The set-up and administration of such plans, typically with custom design, can be too costly for smaller corporations, Clark asserted. “By streamlining the process, and reducing insurance product selection, R3 allows smaller corporations to level the playing field and compete effectively and responsibly in recruiting, retaining and rewarding top performers,” Laudato said.  

R3 also includes “Flex” and “Custom” offerings depending on the needs of the particular client. 

Adviser, Consultant Opportunity

Clark said that the turnkey approach is also beneficial for insurance agents, financial advisers and benefits consultants, as “R3 includes the key tools needed to present, sell, implement and administer NQDC plans, all backed by Clark Consulting’s experienced professionals.”

Clark Consulting, Inc. is an AEGON company. AEGON NV is an international life insurance, pension and investment group based in The Hague, The Netherlands, with businesses in more than 20 markets in the Americas, Europe and Asia. 


Firms interested in R3 should inquire call 1.866.446.7499 or visit http://clarkconsulting.com/r3coli.  

Bill Would Require Disclosure of Participants' Expected Retirement Income

A new bill aims to inform participants of how their account balances translate into actual income in retirement. 

U.S. Senators Jeff Bingaman (D-New Mexico), Johnny Isakson (R-Georgia), and Herb Kohl (D-Wisconsin) have introduced legislation that would require defined contribution plan sponsors to inform plan participants of the projected monthly income they could expect at retirement based on their current account balance.

Specifically, according to a press release, under the Lifetime Income Disclosure Act, defined contribution plans subject to the Employee Retirement Income Security Act (ERISA) would be required annually to inform participants of how the account balance would translate into guaranteed monthly payments based on age at retirement and other factors. To ensure there is no material burden or potential liability on employers who voluntarily sponsor 401 (k) plans, the legislation directs the Department of Labor to issue tables that employers may use in calculating an annuity equivalent, as well as a model disclosure.

Employers and service providers using the model disclosure and following the prescribed assumptions and DOL rules would be insulated from liability.

According to the announcement, the measure is patterned on the Social Security Administration’s annual statements, which are mailed annually to working Americans to inform them of estimated monthly benefits based on their current earnings. “By providing similar information for 401(k) plans, the Lifetime Income Disclosure Act would give American workers a more complete snapshot of their projected income in retirement,” the announcement said.

The press release included statements backing the legislation from the AARP, the Women’s Institute for a Secure Retirement, and the Retirement Security Project.

“Including a disclosure of how much monthly income a worker can expect from 401(k) savings will encourage younger workers to save more for retirement, and older ones to convert their savings into annuity-like products so that they won’t outlive their savings. The Act will build greater retirement security for everyone at virtually no cost to the taxpayers, employers, or workers,” said David John, senior research fellow at the Heritage Foundation and principal of the Retirement Security Project, in the news release.

Some financial firms are in support of better disclosure of retirement income to participants and have already moved to supply projected retirement income on account statements. Prudential Retirement said today that its defined contribution statements already provide plan participants with a snapshot of their projected retirement income. “The Lifetime Income Disclosure Act would go a long way to putting Americans on a more secure path to retirement,” said Christine Marcks, president of Prudential Retirement. “We believe that providing greater clarity around projected income in retirement will help Americans better understand the need for increased savings to achieve their retirement goals.”

The proposed legislation is here.

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