The U.S. personal saving rate is 6.7 percent. While it’s healthier than the record low 2.2 percent in 2005, the economic trend line has dipped consistently below America’s pre-1980 norm of 10 percent of income saved.
Those facts from the federal Bureau of Economic Analysis drive Susan Marler of Advanced Plan Designs LLC. She is in the business of helping people save their money, specifically through employer-sponsored retirement plans.
“Who is saving money on their own?” she asks. “If a company doesn’t offer a retirement plan to their employees, the chances of them saving on their own are miniscule.”
The national rate illustrates the percentage of consumers’ disposable income that they save, and it’s a gauge of Americans’ financial health.
For 20 years, Marler has worked with business owners on creating retirement plans for them and their employees.
“This is the only way people are even somewhat retirement ready,” she says of the typical 401(k) plans.
Her firm administers about 300 retirement plans with a combined value north of $150 million. Though she declined to disclose annual revenue, Marler says Advanced Plan Designs is approaching 10,000 participants among its employer clients, which include Ozarks Coca-Cola/Dr Pepper Bottling Co., SMC Packaging Group and Wil Fischer Distributing Co. in Springfield.
The firm’s footprint grew beyond southwest Missouri this summer with the addition of a sales and marketing vice president in Kansas City. Patrick Euston took the post in June, coming over from Mobile, Alabama.-based Newport Group, another third-party administrator.
Euston says he spotted the job opportunity in a benefits administration journal ad online.
“I saw that Susan was doing something unique in the TPA space,” Euston says. “Most don’t have a salesperson out there – usually just a business owner networking.”
Marler doesn’t plan to stop with Euston. His next step is to hire sales teams in Kansas City and northwest Arkansas – though the expansion to the south is three to five years out. Marler says Wichita is a key target area and eastern Oklahoma also is on the growth map.
In covering the Kansas City region, Euston says he’s not going after any particular industry. “Where we are seeing some successes are your professional organizations or your small-business owners having trouble putting away enough money to save on taxes and to max out contributions,” he says.
One step at a time
Advanced Plan Designs serves as a liaison between its employer clients, their financial advisers and wholesale investment firms, such as John Hancock, Lincoln Financial Group and Principal Financial Group – “the people who hold the money,” Marler says.
“We don’t control where the money goes,” she says. “That’s up to the financial adviser and plan sponsor.”
The formula has worked well with John Hancock, where Advanced Plan Designs was named among its Top 100 third-party administrators based on volume of business in 2017. The firm qualified to attend the Elite Leaders Conference this year.
The process following an introduction to a business owner interested in sponsoring a retirement plan usually has seven steps, Marler says, in accordance with IRS and Department of Labor rules:
1. Design a plan according to the sponsor’s wishes.
2. Draft the legal documents.
3. Perform annual compliance testing to ensure accuracy of contributions, matching calculations, double-checking deposits, etc. “That’s to make sure the benefits are not favoring the owners and the highly compensated employees more so than the rank and file,” Marler says.
4. File IRS returns through online portal.
5. Process terminations, when employees exit the plan, and loan distributions, when they borrow against it.
6. Distribute notices to participants throughout the year.
7. Ongoing consultation of plan to address company sales, acquisitions or additional business partners. “All of those things affect the retirement plan and sometimes require that we restructure the plan,” she says.
Marler previously co-owned TPA firm Qualified Pension Services LLC with Faith Irmen. The business partners split seven years ago, and Marler remained in the Chesterfield Village office building.
Of Advanced Plan Designs’ nine employees, three are plan administrators and one is a plan reviewer. Marler says the average book of business per administrator is 100-125 plans. The largest plan covers 5,000 participants.
She’s spotted two recent trends in how companies are designing their plans.
More owners, Marler says, are adding an auto enrollment provision to enroll eligible employees at a typical 3 percent contribution unless they’re told no.
She says the upside is protection in federal audits as proof the employer offered the plan.
“It used to be only the really large plans doing it, but we’re seeing it in smaller plans – with 50 participants,” she says.
The other trend, toward cash-balance plans, is a form of the pension plan that has fizzled in recent years.
“It’s the new and improved version,” Marler says, noting it allows for annual contributions exceeding six figures by the owner. “Whereas if they had a 401(k) plan, their maximum is $61,000 per year.”
One product that is quickly gaining traction is the 316 fiduciary service that spreads any lawsuit liabilities to Advanced Plan Designs. She says almost a third of her clients have picked it up since it rolled out last year.
“We basically sit in the seat of the plan sponsor,” Marler says. “We’re standing behind the work that we do.”
No one can say Mary Beth O’Reilly isn’t determined.
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