Pension Consultants hits $2B benchmark

At the end of the first quarter, the team at Pension Consultants Inc. announced a notable milestone – $2 billion in assets under management – and after a quiet celebration, founder and President Brian Allen and his staff got back to work.

The company’s senior staff made a video commemorating the milestone – posted online at Pension-Consultants.com – and held a small internal celebration before getting back to business as usual.  

Founded in 1994, Pension Consultants is a retirement plan consulting firm, working with corporations to manage their employer-sponsored retirement plans. The company’s services include research, negotiation with retirement plan vendors, assistance related to the Employee Retirement Income Security Act of 1974, investment research and consulting, and plan sponsor reviews, according to the company’s Web site.

Allen described Pension Consultants as the “manager of the managers” for employer-sponsored retirement plans.

“We are not the ultimate buyer and seller of stocks and bonds, but we help the client select who they will use to do that. And we monitor them and their performance, and compare that to others who do the same type of work. So we’re an independent adviser,” he said.

Gauging growth
The firm hit its first billion dollars in assets under management in 2009, but Allen said the company’s employees weren’t necessarily making a big push to get to the $2 billion mark.

“I’m not really driven by that,” Allen said. “We just focus on … getting better at how we provide advice and how we deliver that advice and how we interact with our clients. Because we do that, the growth has come.”

In January, Pension Consultants was the largest firm in terms of assets under management on Springfield Business Journal’s list of certified financial planners, with more than $1.82 billion under management. The next largest firm, with $1.78 billion under management, was BKD Wealth Advisers LLC.

The latest round of growth is a mix of new business and market performance, Allen said.

“Probably 80 percent of it is from new clients and 20 percent from existing client growth,” he added.

In February, Little Rock, Ark.-based Winrock International enlisted Pension Consultants to handle 403(b) oversight, said Steve Bylow, the nonprofit organization’s senior director of human resources and security. Bylow said Winrock focuses on empowering the disadvantaged through leveraging technology and resources for farming, and it has roughly 500 employees enrolled in its 403(b) plan, which encompasses more than $47 million.

Bylow said Winrock’s external ERISA attorney, who doesn’t provide oversight services, referred the nonprofit’s leaders to Pension Consultants, but that wasn’t the only factor that led to choosing the firm.

“The second was that it was somewhat local, being in Missouri, so we’re able to talk to them in person, and they didn’t have to fly in,” Bylow said. “The third thing would be the size of the firm. I’ve worked with a lot of Fortune 100 companies before, where they used these huge firms. We’re a small organization, so sometimes, working with a smaller firm like Pension Consultants, you tend to get more personalized service.”

Bylow was among the 116 attendees at Pension Consultants’ 16th Pension Focus conference, held in mid-May in Branson. The featured speakers included David Wray, president of the Plan Sponsor Council of America, and Brad Campbell, who was assistant secretary for employee benefits with the U.S. Department of Labor during the George W. Bush administration.

“The speakers were clear and concise,” Bylow said. “They provided good information and answered questions directly, as opposed to, ‘You need to hire us, and we’ll tell you more.’ I was really impressed.”

Asset and service expansion
Based on assets under management, market performance definitely has an impact on Pension Consultants’ volume, Allen said, though it might be less dramatic than expected because of new clients coming on board and existing clients continuing to add to their accounts.

Based on growth of gross domestic product, Allen said the U.S. economy has technically been out of the recession for several consecutive quarters.

“In nominal terms, the economy has actually surpassed where we were at the height in 2007, so our economy is larger now than it was before the Great Recession. The disconnect is that the economy needs to grow at a regular basis just to sustain population growth,” he said. “If you have population growing by 3 percent per year, then the GDP needs to grow at 3 percent per year just to stay even and sustain all the people who come to our country or are born. You can have GDP growth and it not, on average, be better for everybody, because the population has increased.”

Carol Winkler, pension plan administrator with Columbia-based MFA Inc., said the agricultural cooperative has worked with Pension Consultants for various services in the last 18 months  and has beefed up its business with the firm in the last six months. Winkler said MFA has about 4,000 enrollees in pension plans for both MFA Inc. and MFA Oil Co., with about $265 million under management. The company initially hired Pension Consultants to help in the search for a third-party administrator for the plans.

She said MFA was aware of Pension Consultants because Chris Thixton, a qualified pension administrator and director of vendor services with the company, had called on her at least once a year for five years to talk about the Springfield-based firm.

“When we got to the point that we were going to do a search, and I was going through my log book of potential people to help us, I came across him and Pension Consultants, and I thought, ‘I’m going to throw them into the mix and see what happens,’” Winkler said, noting that the reference-checking process also helped seal the deal.

“You expect to get good reports when you call references, because they’re not going to give you someone who speaks badly about them. But they couldn’t return the calls fast enough to me,” she said.  “We have since engaged them to be our investment consultant, and they’ve done a couple other consultancy-type projects for me also.”

Allen said Pension Consultants’ growth has been steady through the years, not marked by short periods of fast growth. He doesn’t have an end goal in terms of how many billions of dollars he’d like to have under management, but he said he does expect that growth will continue with the customer-focused approach.

Pension Consultants’ staff has grown to 19, and the team includes two attorneys, three qualified pension administrators, four certified financial planners and a chartered financial analyst. The two most recent hires, in early May, were Todd Hughes, an attorney working as director of ERISA services, and Terry Daniels, a chartered financial analyst who is a senior investment consultant with the firm.[[In-content Ad]]