Unique Focus

Specializing in the small-plan segment

The fastest growing retirement plan market is also that which is least served by skilled retirement plan advisers. While micro and small retirement plans might not seem to be quite as attractive to some, there are advisers and recordkeeping providers making their niche in this space. PLANADVISER recently spoke with Paul Chong, senior vice president of Retirement Plan Solutions at CUNA Mutual Group, about how CUNA Mutual differentiates itself from other retirement plan service providers by serving small businesses and participants in households with total annual income of $50,000 and below—as well as how the company supports retirement plan advisers working in this space.

PA: What is CUNA Mutual Group?

Paul Chong: CUNA Mutual Group is the leading financial services provider to credit unions and their members worldwide. Our mission is to create financial security for Middle Americans, and our vision is to be the best at serving credit unions and their members. As a mutual company, CUNA Mutual Group belongs to its credit union policyowners and operates to serve their best interests. CUNA Mutual Group was founded at the same time as the U.S. credit union movement, nearly 80 years ago. There are about 6,600 credit unions in the U.S. and nearly 100 million credit union members. Credit unions are not-for-profit, member-owned financial institutions that exist to serve the financial needs of their member owners. Their main focus is their members and the local community, and CUNA Mutual Group supports them in that effort.

PA: What is your target retirement plan market?

Chong: We have two target markets. One is obviously to help credit unions, themselves, with their retirement plans by serving their employees. CUNA Mutual Group has been supporting credit unions for the past 50-plus years with defined benefit (DB) and defined contribution (DC) plans. The other marketplace we focus on, through CUNA Mutual Retirement Solutions, is in the intermediary space. Our focus is the small-plan marketplace, defined as assets of $10 million and below. We sell to this market through retirement plan adviser intermediaries who have strong relationships with these small-business owners.

The reason we target that particular planned segment is that small employers represent the largest number of employers out there, and they possess the greatest number of these average American workers we’re targeting.

PA: How do you differentiate yourself from competitors?

Chong: The first point of differentiation is our focus on the average American worker. Again, that average household with a total annual income of $50,000 and below isn’t being served by the rest of the financial services industry, especially by for-profit organizations. Just as credit unions focus in on them, CUNA Mutual Retirement Solutions’ primary goal is to support average American workers with financial education and literacy, and to help them prepare for their retirement.

We have developed a number of educational tools and use behavioral finance techniques to make it easy for participants to join their plan.

Our RetireOnTarget tool makes it easy for participants to figure out whether or not they’re on target to replace 80% of their income at retirement. On our website landing page, they can see whether or not they’re on target, and if they are not, they just have to press one button and we’ll help them achieve that goal.

The other thing that differentiates us in the marketplace is our people. Our employees are very long-tenured in the business. The average employee tenure for us is 17 years, and these people have really invested their time and effort in this industry.

A great proof point of that is that more than 100 CUNA Mutual employees have American Society of Pension Professionals & Actuaries (ASPPA) designations, which results in a very high client satisfaction rate. We always score at the top of our industry in all categories and all the segments we compete in; I think that’s really due to the strength of our employees and their expertise. For another great proof point: Our average client tenure is more than 12 years, compared with the industry average of eight.

PA: How do you work with advisers?

Chong: We have intermediary wholesalers who work with advisers. We’ve got 21 outside wholesalers who are supported with additional inside wholesalers. This team works with advisers to help them sell and support retirement plans.