October 12, 2017

2015 RPAY – L. Rita Fiumara

Reported by

PA: What is your mission statement?

L. Rita Fiumara: My mission statement is to create awareness for both plan sponsors and their employees about the importance of retirement and health care savings programs in order to create a consolidated report that is intuitive for plan participants to use to discern and budget their monthly living expenses, all while planning for retirement. To do the latter, participants can project outcomes via questions that address:

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  • At what age can I afford to retire?
  • How much income will I need, and how much can I conservatively withdraw each month?
  • What will be my health cost premiums when Medicare sets in at age 65, and what Medicare gaps—Part B and Part D—do I need to plan for?
  • At what age do I qualify for early retirement, and when does it make sense to start my Social Security benefit?
  • What should my investment allocation look like based on my individual risk tolerance and time horizon?
  • How will my beneficiary/spousal benefits affect decisions pertaining to continuing or signing up for health care benefits, as well as overall retirement savings and distribution options? 

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

LRF: I have collaborated with my clients’ recordkeepers in tracking participant quarterly plan activity reports. The objective is to assist plan sponsors in establishing success measures by identifying retirement income readiness ratios for different groups of employees, then working toward improving their probability of success. The employer retirement report cards should include the portfolio allocation broken out by various age bands, the current savings strategies as seen by average contribution rates, current salaries, and overall asset allocation for each group of employees. 

Employing the utilization of income-gap calculators is a big component of my education efforts to both participants and plan sponsors. Projecting monthly income at different life and career stages can assist participants in prioritizing their monthly spending habits. Retirement readiness should account for health care expenses, long-term care and disability insurance.

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

LRF: My initiatives for each plan year begin with reviewing the challenges of each client given their industry, financial budget limitations, employee turnover, hiring of new talent and overall constraints that clients need to adopt in applying any of their benefit decisions. Setting long-term and short-term goals is imperative to determine what is working and what is not working within the framework of a client’s current benefit program. Identifying the strengths and weaknesses of current plan provisions should allow for better strategic planning in designing the ideal plan. 

Furthermore, analyzing employee demographic groups and applying targeted strategies while adopting behavioral finance strategies allows me to implement communication methods and topics that are relatable and timely.

PA: What changes to your practice or service model have you planned for this year?

LRF: In addition to applying an integrated health and retirement communication campaign, I intend to continue my efforts in adopting customized solutions based on a client’s aging population. Programs endorsed by new legislation—qualifying longevity annuity contracts (QLACs)—provide another option for those participants who wish to set aside additional monthly income for long-term care or Medicare gaps.

Under this program, retirement plan participants will be set up to use up to $125,000 or 25% of their account balance, whichever is less, to purchase guaranteed income for life, starting at an advanced age of 85. These evolving investment structures will be essential in providing alternative options as our aging population begins the next phase of their lives.

BUSINESS AT A GLANCE

PLAN ASSETS UNDER ADVISEMENT: $845 million

MEDIAN PLAN SIZE (IN ASSETS): $45 million

TOTAL PLANS UNDER ADVISEMENT: 52

TOTAL PARTICIPANTS IN PLANS SERVED: 12,000
October 12, 2017

2015 RPAY – Corby Dall

Reported by

PA: What is your mission statement?

Corby Dall: We are a family business. So, we treat our clients like family, and, by extension, we consider their employees family, too. The highest form of recognition an employer can offer valued employees is a way for them to retire comfortably. We help employers deliver on this. We have a clear passion to help as many people as possible to retire with dignity, and it is manifest in everything we do.

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

CD: I am passionate about using whatever method is most successful in getting more Americans on track to retire on their own terms. Plan design remains the most powerful way to do this. We employ a plan design optimization study process, which we consulted on building. It assists the client in evaluating the current retirement readiness ratios of its entire population, individually. We factor in account balances, Social Security, savings rates, investment returns, wage growth and retirement ages. This individualized analysis on every employee creates insightful work force data that the client has never seen or likely even considered before.

The outcome is a report that allows the employer to examine gaps in its employees’ retirement savings. The report also allows us to show the impact of various plan design options and the effect they have on each employee’s retirement readiness. The plan-design levers that this report illustrates are: automatic enrollment and annual re-enrollment, automatic increase, and re-enrollment to some type of asset-allocation vehicle to create better, more consistent investment diversification. We plug in various scenarios for each lever, and this helps the client assess the expected outcomes in real dollars and cents for the company and the employees. This leads to far more willingness to adopt these beneficial initiatives, and allows the committee to have more meaningful data to share internally to get executive/decisionmaker buy-in. We also run this report in subsequent years to measure its effectiveness.

I have also found it most successful to connect the committee with other clients of ours who have already been down this road. This has doubled our uptake on automatic plan features in recent years and has given the client much more confidence, while promoting camaraderie inside our family of clients. 

A great example of the success of this design initiative, paired with our robust participant education process, is our client the O.C. Tanner company. It was recognized as a PLANSPONSOR Plan Sponsor of the Year in 2014. It has achieved over 97% participation and high retirement readiness with a very diverse work force.

PA: Describe a difficult client situation and how it was resolved.

CD: What was a new client of ours with a very complex, large organization and a severely neglected plan just credited us with helping it sail through an Internal Revenue Service (IRS) audit.

When we took over as the adviser, we went to work reorganizing the structure of the committee and helped it put the right players in place in order to get things done in a timelier manner. We also took the plan through our fiduciary and operational audit process, which mimics an audit or investigation by the IRS or Department of Labor (DOL). We were able to find or reconstruct many missing pieces and create a fiduciary vault housing all required documents, minutes and processes that make up a well-documented and well-run plan.

The process took almost one year to complete but gave the client peace of mind, knowing it was in good shape going forward. A few years later, it was “blessed” with an IRS plan audit. I am happy to report that the audit just ended and the client came through with a clean bill of health.

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

CD: I feel like my service team and I really make a difference in so many participants’ lives and give great peace of mind to their employers. This is my original mission, and I am very blessed to have it coming to fruition.

BUSINESS AT A GLANCE

PLAN ASSETS UNDER ADVISEMENT: $1.6 billion

MEDIAN PLAN SIZE (IN ASSETS): $8 million

TOTAL PLANS UNDER ADVISEMENT: 134

TOTAL PARTICIPANTS IN PLANS SERVED: 53,000

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