The 20 Rising Stars of Retirement Plan Advisory 2008

KNOWLEDGE, EXPERTISE AND EXPERIENCE funds, although separately managed accounts may be appropriate if the participant has assets elsewhere. “At the higher levels of complexity, planning can include definedbenefit plans, IRAs and even self-directed and brokerage options,” Gallagher noted. “But for the majority, we want to take the burden off those people who are not equipped to take them on.” Indeed, it is the Pension Protection Act that has given plan providers the legal, moral and procedural cover to do that. “In the old school, we used to give people enrollment kits and we were surprised when they took no action,” Gallagher said. “Now, we are flipping the equation. We want to put the nonparticipant on the easy path.” For the sponsors, there are deterrents and rewards. If there is not sufficient participation by rank-and-file employees, company chiefs may not be able to take full advantage of their full contribution limits. “No one wants to go back to highly compensated executives with contribution refunds that they will have to pay taxes on,” Gallagher said. “Those are not happy conversations.” On the brighter side, the size of the plan offers purchasing power, which can be magnified by aggregation. Don’t just think about the salary that an employee can contribute, Gallagher said, also think about the IRAs and 401(k) that people bring with them from previous jobs. Good programs contribute to retention, so there should be a great opportunity to roll in assets. Real Progress Out on the front lines, progress is real. Jeanne Brutman is a New York-based independent financial advisor who specializes in 401(k) and other benefit plans, especially plans that have been struggling. In a recent rescue, she moved a company with 170 eligible employees from 42 participants to 161 participants, or from less than a quarter to almost 95%. “Those employees were not given the attention they needed, the plan was not explained properly and they did not understand the markets,” she noted. Another caveat that Brutman offers is that loans against 401(k) accumulations are ‘the kiss of death.’ “You can borrow for anything else, but you cannot borrow for your retirement,” she stressed, noting that loans are rarely paid back, thus reducing the assets in the plan and increasing the tax consequences for the participant. “The Pension Protection Act has been monumental,” Brutman said, adding that its breadth is incredible. Most importantly, it gives plan providers and sponsors the leverage they need to boost participation and contributions, she noted. The object is to do good for participants. If providers and sponsors do well as a result, so much the better. i PLAY A KEY ROLE IN YOUR PLAN’S POTENTIAL. retirement plans Are your REACHING THEIR FULL POTENTIAL? A trusted adviser helps you: Gallagher Retirement Services http://www.gallagherretirement.com

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The 20 Rising Stars of Retirement Plan Advisory 2008 Contents Doing Well By Doing Good The Post-PPA Bounce Automatic Enrollment vs. Managed Account Unfair Advantage? You Bet The New World Order 20 Rising Stars of Retirement Plan Advisory Mentors’ Page

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