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Posts from the ‘ERISA’ Category


Pick One And GO!

Do you enjoy committee work or participant facing activity? Pick one and GO! Are you a composer or a conductor? Pick one and GO!

Check your Broker/Dealer agreements with plan sponsors. What do they allow you to do? Pick one and GO!


If they don’t have clear agreements then you really gotta GO!


Drive 55

Speed limit

How fast do you go on the highway? The speed limit or 9 miles per hour over the speed limit. If you are in North Jersey you can’t go the speed limit safely can you? The actual and practical speed limits probably vary by region and population. I recently saw speed limit signs in Utah posted at 80 mph. Going over 80 mph is hard for most.

The growing school of thought in the qualified plan business involves a defined speed limit for compensation and related services. While we won’t make an attempt to define the speed limit, we ask you to be mindful as compensation and services are paired. Be clear, Be reasonable and Be informed. Use the tools available from your vendors, your DCIO partners and your digital destinations. has a unique group assembled to build around as do other industry stakeholders.

By the way, it is a great time to have those conversations with plan sponsors, especially if you are new to the industry or considering entry. You have a clear message that resonates deeply with decision makers and fiduciaries and no old habits to unlearn.

Oh yeah and just drive 55. The rest of the story is for another day.



Payroll Deduction IRA Programs


A Guest Post from Craig Howell, The Online 401k

According to a July 2013 GAO study, only 12% of the 4.8MM US Employers with more than one but less than 25 employees offers a workplace retirement plan.  (401(k) / SIMPLE / SEP).  This leaves millions of Americans without “coverage,” and is exacerbating the problem of funding Americans’ retirement.  It’s also a problem that, given the right products, Advisors are best-suited to address.

 Tired of waiting for private-enterprise to better this statistic, a handful of states are examining a political response.  California and Connecticut are two examples, each studying “Feasibility” of laws that would require business with a minimum number of Employees (10 in CA, 5 in CT) who do not offer a retirement plan to participate in a “Payroll Deduction” IRA programs managed by these states.

 This is in addition to H.R 2035 (Sponsored by Richard Neal D-MA) at the Federal level, which would require business with more than 10 employees to either offer a workplace savings plan, or facilitate employee deferrals into IRAs.

 Obviously, there’s a big difference between bills / feasibility studies and law.  But, if private enterprise alone won’t improve the statistics above, then government is obliged to try.

As an organization who specializes in delivering 401(k)s and Payroll Deduction IRAs to the small-business segment (1-25 Employees), believes this an opportunity for advisors to engage their small-business customers on the benefits of tax privileged retirement savings.  We can help Advisors easily, inexpensively, and profitably set-up workplace savings plans – so that these various governmental mandates won’t apply.

Photo courtesty of  AC Moraes via CC-2.0


Large Vs. Small


Large or small practice, large or small clients, large or small plan size?  We get this question from vendors and peers.  For us, bigger is not always better.

Bigger means committees.  “A camel was a horse designed by a committee”.  Bigger means many people you have to build relationships with during the life of the relationship.  Bigger means having to deal with corporate politics, alliances and eventual terminations.  Bigger to us means bigger headaches.

For us it’s simple.  Smaller is better.  With a little bit of time you will find smaller clients that fit well into your sandbox.  These clients will NOT be racing to the bottom on price.  These clients will have succession planning issues. These clients will have family members intimately involved in the business.  These clients will (more often than not) be paternalistic toward their employees.  These clients will be easier to show your value to. These clients will come to value the relationship.

If Bigger is for you, great. But remember committees build camels.  People build successful retirement plans.



Image courtesy of SOMMAI at


The Long and Winding Road | Dalbar Certification

 A guest post by John Marion from Howard Capital Management

Contry Road

Howard Capital Management started on the journey to achieving Computer Model Certification 5 months ago.  We started down the road because we wanted an independent third party to review our methods for compliance with ERISA and we wanted the certification to show it.

There are very few companies that are approved by the Department of Labor to certify computer models under ERISA. DALBAR is one of the best know of these companies. So we chose DALBAR as the “gold standard” to conduct our certification.

Five months ago, we asked DALBAR to open the Optimizer’s hood and kick the tires. The certification process covers the following points, among others:

  • Clean background check
  • Investment theory is generally accepted
  • Performance and fees are reasonable
  • 5-year track record
  • No conflicts of interest

After 7 weeks of intense scrutiny, we received DALBAR’s certification on May 20th, 2013. Needless to say we are proud to have received this credential.

 Now we can say that the Optimizer has been evaluated by DALBAR to determine if it meets the requirements to be used as a Certified Computer Model as defined by the Employee Retirement Income Security Act of 1974, as amended [“ERISA”] Section 408(g) and Internal Revenue Code [“IRC”] Section 4975(d)(17). As a result, the HCM 401(k) Optimizer® computer model has been granted Certified Computer Model status by DALBAR. This is important, because ERISA plan fiduciaries who meet all other ERISA requirements and use a certified computer model will qualify for the fiduciary relief granted under ERISA Section 408(g).

There are very few companies offering models that have been certified and none that we know of that embrace the Advisor as the Optimizer does.This is very important because it allows us to partner with advisors to offer plan sponsors a solution that can grant them fiduciary relief.

Image Courtesy of nuttakit at


Would you rather …?

It’s a game children play. I assume, mostly boys play it. We have the books. If you are unfamiliar with the game it goes like this:

“Would you rather have to wash your mouth out with soap every time you said the word “the” or “share your bed nightly with a family of racoons?” Racoon

Not the most sophisticated of games but very telling, insightful even.

So let’s play a round of Qualified Plan “would you rather”:
Would you rather … play on the non-ERISA side of the coin or the ERISA side?
Would you rather … have the ability to avail plan participants of your other services or be a named Fiduciary on a plan?
Would you a rather … try and compete with large firms that charge as little as $350 for fiduciary services or would you rather add value and deliver meaningful education to participants?  ERISALetters

I am not saying we have all the answers. I do think we ask good questions.

I do not think the soap or racoons are all that appealing.

But once you decide on how you want to play your game of ” would you rather” let us know. We can help you either way.