In Practice September 18, 2012

Ascensus Bulks Up Support for DC Plan Servicing

Retirement plan solutions provider Ascensus announced expanded efforts to drive results for advisers in retirement plan servicing.


 

 

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The firm’s business development consultants (BDCs)—part of the company’s strategic partners group—are aligning with advisers who have a significant portion of their practice working with defined contribution (DC) plans.

 

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The BDCs customize support, working directly with advisers within their own territories, Kathleen Endres, executive vice president of client service at Ascensus, told PLANADVISER. Combining phone support and travel, BDCs meet with advisers face to face about a quarter of the time.

According to Endres, the BDCs can evaluate an investment lineup, suggest targeted communications from Ascensus and consider other plan designs. “The BDCs help them design solutions to grow their businesses organically,” she said. “They look at specific issues with [the advisers’] clients and help them identify ways to improve those plans and improve retirement readiness.”

Their resources include the Fiduciary Benchmark Inc. tools, which they are licensed to use, and offer at no cost to clients in these relationships. Ascensus also has its own plan reviews, plan studies, communication pieces and report cards that advisers can use to improve outcomes for the plan sponsors and participants they service.

“We see a trend toward the consolidation of plans with retirement-focused advisers who see this as a critical part of their practice,” Endres said. “We are pleased to offer the business development consultants to support these advisers—in concert with the Ascensus regional vice presidents in each territory—from both a sales and service perspective and partner with them to grow their books of business.” 

 

Data & Research September 18, 2012

Will DBs Make a Comeback?

A white paper contends defined benefit (DB) plans are positioned to make a comeback.
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“We firmly believe the defined benefit plan economics are shifting and will afford employers the opportunity for lower funding costs, thereby positioning defined benefit plans to once again become one of the most cost effective methods of providing adequate retirement income to your employees,” authors of the white paper by Pentegra Retirement Services wrote.  

The paper says the factors and economics that caused significant increases in required contributions to defined benefit plans are showing signs of slowing and reversing themselves. The impact of the Pension Protection Act of 2006 (PPA) is passed, as the provisions of this law have been fully phased in.   

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The authors point out that historically low interest rates, which cause plan liabilities to increase every time they drop, appear to have nearly hit bottom and are poised to begin rising as soon as the Federal Reserve suspends the accommodative support of growth through an expansionary monetary policy. Other underlying macroeconomic trends such as the 30-year bull market in bonds, the decade-long stagnation in the equity markets and the lack of viable options to extend duration for pension investment managers all exhibit signs of changing for the better.  

The paper also notes that the financial crisis that began in 2008 caused sponsors of retirement programs to begin to rethink their strategies, as it became clear that relying solely on defined contribution plans provided inadequate retirement benefits and resulted in participants being unprepared for retirement.   

“What we have all needed was a change in the influences impacting employer costs and those changes are under way,” the authors conclude.  

The white paper, “The Future of Defined Benefit Plans Will Change Dramatically – For the Better,” is here.

 

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