October 12, 2017

2015 RPAY – Alliance Benefit Group Financial Services

Reported by

PA: What is your mission statement?

Alliance Benefit Group Financial Services: Driving sustainable financial outcomes for the American worker.

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PA: How is your team/process/structure unique?

ABG: We measure plan success differently. Many plan sponsors measure the success of their plan in terms of funds, fees and fiduciary governance. The typical vendor measures success by examining the plan participation rate and average participant deferral rate. We challenge our clients to measure the success of their plan by the percentage of participants actually on track to have enough money at retirement to maintain their same standard of living. We measure that progression, provide participants with an annual statement as to where they stand, develop and implement strategies to improve those statements and benchmark them for our clients and participants annually.

PA: What have you done in the past year to improve participants’ retirement readiness?

ABG: Participants can’t expect to achieve retirement success unless their current financial health is in good shape. To this end, we set forth on a project this past year to effectively deliver a financial wellness program to our client base. We’ve developed a multistage financial wellness program to assist participants in gaining control over their finances, improving their savings rate and thereby improving the likelihood of retirement success. This multistage strategy includes three tiers of education, enabling participants to determine the best approach to fit their needs. The initiative blends in-person assistance with technology-based tools, supporting participant education through multiple channels to meet multiple learning styles.

PA: Describe any particularly noteworthy investment initiatives you have led with your customer base in the past 12 months.

ABG: We have taken the following steps:

  • Analysis for plan sponsors comparing the value of actively managed versus low-cost passively managed fund menus;
  • Analysis of all managed account alternatives available, including methodology, results, price and user experience;
  • Designing a 3(38) menu of funds essentially based on low-cost fundamental/rules-based indexing, coupled with defensive actively managed funds; and
  • Analysis and implementation of a retirement income annuity solution for plan participants. 

PA: Please describe any special education or communication initiatives you’ve undertaken with plan sponsors or participants.

ABG: One of our clients, a large, national construction company—the 2015 PLANSPONSOR of the Year in the Corporate 401(k) $50 million to $250 million category—has over 2,000 employees with locations throughout the country. As a construction company with participants on various job sites, direct participant engagement is difficult, and both participation and asset-allocation results were concerning. 

Last year, this company embarked on a total re-enrollment campaign using automatic enrollment, auto-
escalation and auto-advice features. We used a robust, multichannel communication strategy, fully customized for the plan, to reach its wide demographic and geographic span. From traditional print materials and mailers to innovative approaches such as QR, or “quick response,” codes, custom video education and a host of useful information all housed on a dedicated webpage for employees, we were able to reach this diverse and dispersed work force wherever they were and at any time. All of this data was made available in both English and Spanish, to accommodate the employer’s diversity.

The company’s goal to positively impact plan participants was a success. The plan participation rate rose from 77.32% to 91.94%. Out of the 1,551 eligible participants, 1,188 employees (76.6%) were aided through this re-enrollment, which also reallocated $107 million of the plan’s $180 million total plan assets to age-appropriate, risk-based asset-allocation strategies.

BUSINESS AT A GLANCE

PLAN ASSETS UNDER ADVISEMENT: $2.37 billion

MEDIAN PLAN SIZE (IN ASSETS): $5.18 million

TOTAL PLANS UNDER ADVISEMENT: 161

TOTAL PARTICIPANTS IN PLANS SERVED: 78,250

October 12, 2017

2015 RPAY – Dan Peluse

Reported by

PA: What is your mission statement?

Dan Peluse: We work to improve the lives of our clients and their participants through the implementation and use of thoughtful retirement benefit programs. While helping them navigate the ever-changing retirement landscape, we hope to achieve effective and efficient plan management to support our clients with their duties as plan sponsors and fiduciaries. Through this process, we strive to create a path that helps plan participants achieve the ultimate goal of a sustainable and comfortable retirement.

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PA: What have you done in the past year to improve participants’ retirement readiness?

DP: “Retirement ready” plan participants, from my perspective, are those who are on track to replace 80% of their income. We incorporate their existing retirement savings, including current plan assets, outside assets and Social Security, their current savings rate and asset allocation. Along with our plan sponsor clients, we work to identify those individuals who are on track and those who may not be on target to meet their monthly retirement income needs. Annually, we review this data at a plan and participant level to help guide our plan design, communication and education initiatives.

In order to improve the likelihood of producing this outcome, we have continued to:

  • Promote and utilize automatic plan features—automatic enrollment,
    automatic escalation, etc.;
  • Meet individually with participants to assist in establishing appropriate retirement savings rates and asset allocation;
  • Perform individual participant retirement income projections and identify retirement spending needs, including health care costs; and
  • Produce targeted communication materials.

PA: As a retirement plan adviser, what do you take the most pride in? 

DP: Helping plan participants reach their retirement goals and enabling them to sustain a comfortable retirement is the most gratifying part of being a retirement plan adviser. Receiving the phone call or email from a participant stating that he “will be retiring soon” means that, along with our plan sponsor clients, we have done our job and created a meaningful and valuable benefit. 

PA: What benchmarks do you use to measure plan and client success? How do you react to clients or prospects who don’t share your goals for their retirement plan?

DP: We adopt the 90–10–90 rule as a benchmark along with our clients. We strive to attain 90% participation, 10% average deferral/savings rates and 90% utilization of asset-allocation investment options. We believe that reaching each of these goals greatly increases the chances of replacing 80% of a participant’s current income and in turn creates a successful retirement plan that our clients can use as a benefit that is valuable in retaining and attracting talented employees.

Understanding that these goals may not be attainable for all companies or organizations, we work with them to set more appropriate goals that best meet the needs of their organization and employee base when necessary. While some of our most successful client relationships are those where the client shares our goals and objectives, our definition of success can be modified in order to produce measurable results for all clients and prospects.

PA: What are the most important issues your plan sponsors face with their company retirement plan, and what specific actions do you take to assist them in overcoming those issues?

DP: As the retirement plan landscape continues to change, our clients are challenged to maintain fiduciary best practices, make sense of a dynamic legislative environment, determine reasonableness of plan fees, and identify whether or not new plan features and investment options are appropriate for their plan participants. Understanding that maintaining a successful retirement plan cannot be a full-time job for most of our clients, I want them to feel comfortable relying on us as their retirement plan adviser to support with any or all of these tasks.

BUSINESS AT A GLANCE

PLAN ASSETS UNDER ADVISEMENT: $895 million

MEDIAN PLAN SIZE (IN ASSETS): $8.5 million

TOTAL PLANS UNDER ADVISEMENT: 146

TOTAL PARTICIPANTS IN PLANS SERVED: 18,750

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