Edward D: 0:00

Welcome everyone, this is Ed Dressel with another podcasts about the 401(k) participant education solutions we have, and I have Michelle Cannan and Bob Newton with Beltz Ianni& Associates. I hope I said that right. Welcome to both of you. Good to have you here today. Thanks for being here.

Bob & Michelle: 0:21

Hi Ed. You're welcome. Thanks for having us.

Edward D: 0:23

Tell me a little bit about what Beltz Ianni& Associates does.

Bob N: 0:27

Beltz Ianni& Associates LLC is a financial services firm and we're located in Rochester, New York. We've been providing services throughout Western New York since 2001. Our primary focus is on helping people as they prepare for and strive to maintain a successful retirement. In addition to managing the wealth concerns of employees through our retirement plan business services, we also provide retirement insurance and investment planning on an individual basis for our individual clients. The majority of our retirement service advisors have significant backgrounds in retirement plan services, including being former record-keepers and CPAs. Our groups professional experience includes fiduciary consulting, investment management, record keeping, third-party administration, participant education and guidance, ERISA compliance and plan design.

Edward D: 1:23

How many employees work there?

Bob N: 1:27

I think right now about 15.

Edward D: 1:30

A lot of great experience. It sounds like. Tell me a little bit about both of your experiences and your role at the company.

Michelle C: 1:38

Well, Bob and I are part of the retirement plan consulting group at Beltz Ianni& Associates. We guide our plan sponsors on the management of their company retirement plans. In many cases, we act in a 321 co-fiduciary role regarding the plans investment management. Additionally, we help plan administrators understand the various vendors that support their retirement plan and this involves assisting our clients with plan design, payroll data delivery, annual compliance testing, and record keeping platform technologies. Our goal is to help plan sponsors operate their retirement plans as smoothly as possible and in the best interest of all parties, sponsors and participants.

Edward D: 2:19

Are you both licensed advisors?

Michelle C: 2:23

Yes, we are.

Edward D: 2:24

What brought my attention to your company, I saw some statistics or heard some statistics about how well you're doing, and I got some from your company. The data showed that you had a 13% increase in deferrals in 2016 at 26% increase in 2017 and a 40% increase in referrals in 2018. That's great numbers. How'd that happen?

Bob N: 2:49

Yeah, it is Ed, one thing I want to point out on those numbers. Those are percentages based on the people that we had the opportunity to with, not a complete plan level, but in each organization whether we met with 10 people, 20 people, 50 people, those where the percentages and they continue to increase, but at the end of the day, and that all comes about from education and we just keep pounding that education, education and more education for all parties. And it really starts with plan sponsors. We help provide the best practice information to help educate them and their role. And that includes data that may come from many different sources such as our own experiences, the department of labor, the IRS, plan sponsor magazine, investment companies, or record keeping firms just to name a few. We believe it's very important for the business owner to be aware of planned management rules and regulations as well as what's going on in the retirement plan industry. They can't be expected to know every retirement plan, benefit nuance, because they're knee deep in running their business on a day to day basis. And we see that with all clients. Part of educating the plan sponsors also involves educating plan participants and for each client we build a schedule for this frequency of staff education meetings and individual one on one meetings. After each employee educational event. We always document the results and deliver it to the plan sponsor. We have a firm belief that plan sponsors need to know what is or is not working for their employee group. And then this followup information is a tool that helps both planned sponsors and ourselves make sound decisions on further support that their employees need.

Michelle C: 4:40

And then following each calendar year, we hold review meetings with each client to discuss the results of the prior year as well as what our new goals are for the current year. Documentation and goal setting are really key if plan sponsors are going to be successful in building an offering, a retirement plan, that's a positive benefit for their employees. Documentation and goal setting are the greatest influences we bring to plan sponsors and participants. No one can succeed if they don't know where they are today and where they want to be in the future.

Edward D: 5:12

I like what you said when it started and you said it comes from education, the success, but that is, there's so many definitions of what it means to educate and I think the plan sponsor, you know, understanding how the 401(k) works and some of the DOL IRS regulations, what's happening in the industry. But as far as it comes to participants, I've got a stack on my desk of what it means to educate a participant and it's really all over the map. Sometimes I feel like some of the articles are way off the map. What are you doing to educate participants so that they're engaged in it because it seems to be difficult to get participants engaged in the education process?

Bob N: 5:49

Well, I think at a high level we keep it as simple as possible. Help them to understand their plan, the plan parameters and the investments. And then we use the TRAK program, we call it pathway to success.

Michelle C: 6:06

Our pathway to success meetings are all about helping employees on an individual basis. We discussed how the RetireReady Solutions TRAK system is set up. It's really a combination of default information. So their age at retirement, retirement income needs, social security projections, plus their basic payroll withholding information.

Bob N: 6:26

And from that point, as we go through the process, we point out the four areas that individuals really have control that we often find they don't realize and they can or they can't influence it. And most people are really surprised. Out of the four areas, the first one is how much income do they need and do they need 80%, 70% income replacement or something else? And most of the time the majority of participants, it's really an educated guess and they're looking for guidance. The secondary that we focus on is what age do they believe they'll start taking social security and many individuals again make an educated guess when they want to start receiving social security at age 62, at the beginning age or all the way to 70. And when they give us the age, which is often 62, we ask why. And their responses vary, but we often hear,"I don't know" or will hear"I thought that was when everyone started taking their checks" or"I was supposed to take it" or often you hear"my brother, sister, father, mother, neighbor, coworker, that's when they took it. So I thought I had to take it". And often we'll hear,"I want to get every penny out of social security. I paid into it all my life and I want to get everything back". The third area is the amount or percentage of their pay and that's what they're saving currently in the retirement account. That's an area where they have the most control and oddly enough participants really don't realize that. So we point that out and they should own that. And then fourth is the percentage of return that they're receiving on their investments, which is an area that they had the least control and that's where we try to help them with the investment actions are available in their plan.

Michelle C: 8:17

And after we walk through that 10 minute discussion, we show the individual with our current strategy will likely provide as income at age 65 assuming they make no adjustments and the variables are fixed. The TRAK program has a really powerful visual screen that illustrates the individual's retirement income using a bar chart and shortfalls and retirement income derived from their retirement account assets are shown in red on the bar chart. Many participants unfortunately are going to deplete their retirement account assets by their mid seventies and that excludes of course any ongoing stream of income from social security, maybe some corporate pensions, annuity accounts the participants may have. But then we pause and wait for their reaction, which usually takes about three to five seconds and then they ask, what can I do to get rid of that red?

Bob N: 9:06

And that's when we go back to the four areas that they have influence. And we asked them if they want to change your future income needs. And usually there's a chuckle and most often the answer is no. They feel they need to have 70% or 80% or whatever the percentage they elected. We then review social security age, which very interestingly, it always delves into a deeper conversation and then we're looking to get the conversation going in the basics of social security and the various ages they can choose to receive payments. Most people don't realize that they have options there. It's their choice. Then we'd go to the deferral percentage and that's where we use the TRAK paycheck calculator, a very powerful program that helps the participant actually see the effect of any change. So we help participants find a comfortable increase without hurting their household budget. This really is, in our opinion, one of the most powerful tools of the TRAK system. And it helps employees realize they can increase their deferrals quite often by more than 1% without hurting their budget. And then finally we discussed the diversification and the allocation, the investments and put all four together

Michelle C: 10:26

And then after that we actually assist participants in an area we feel most advisors never venture into. We guide them on how to make their desired changes before they leave us, time permitting. We show them how to log onto their retirement plan website, how to establish usernames and security protocol, and we coach them on how to enter their deferral percentage, set up their beneficiary information, and navigate their account online. If the account website isn't accessible or we don't have internet access, we can always call the record keepers 800 number and help them that way, but guiding participants on how to make their deferral changes might be one of the most important components of the meeting.

Edward D: 11:05

Bob, one of your comments was that the paycheck calculator is one of the most powerful calculators and I don't think people who've never used the paycheck calculator understand that. I think it's a great tool and I've heard about the responses. Tell me a story of working t he paycheck calculator where s omebody got the aha moment right in front of you w here they connected.

Bob N: 11:26

Often whether someone's contributing a 0% or even 10% when you walk through the paycheck calculator and you talk pretax and Roth and you show them what 1% represents, that's when suddenly people really figure out that,"wow, I can make a big change" in that 1% idea I focus on leaving every participant with. So if they have a gross income of$1,000, 1% is$10 an d p retax an d m ight be the effect of$8.50 on th eir p ayroll. And when you show them that they in crease 1%, quite often people will go, well, gosh, I can do that. What if I did two? Or what if I did five? And quite often people then make that type of change. They don't go up one. I think most advisors accept o r HR people as well, accept people moving one, nobody pushes anybody to their benefit to look at can they actually afford to do more, which everybody needs to do. We all know in the retirement plan world we should be doing 10-5% but we allow people to just hover in that 2%, 3%, 4% range. And then one other thing that just popped in my mind is as we go through that, I can't tell you how it being in the business 30 years, there used to be rules that you couldn't contribute more than 10% or maybe 15% and those days are long gone. But I can't tell you how many times I still have a participant tell me, well I didn't realize I can contribute more than 10%, I thought I was limited to that and that's where both Michelle and I reemphasize to them, it's not a percentage, it's a dollar amount. The annual dollar amount this year is$19,000, 49 and under and 25,000, 50 and older. And that's that aha moment you've talked about is where you just see their eyes open up and um, they kind of jump on it and make, make some significant changes.

Michelle C: 13:39

I think sometimes people get paralyzed by the math too. They hear the word percentage and they have no idea how that equates to a dollar amount coming out of their paycheck. Just this morning I was meeting with someone and she came in the room and said, I really want to be able to contribute as much as I can is what am I as my budget allows to the retirement plan. But I have no idea what that amount is in a percentage. So we went through the paycheck calculator, tried out different percentages and came up with something that worked for her. So it's a great experience to be able to kind of translate that and help somebody make sense of it and make positive changes.

Edward D: 14:24

Tell me what story issues you've seen about participants satisfaction.

Bob N: 14:29

Participants, we find are very appreciative of the time spent and often will speak that to us. They appreciate the fact that their employer gave him the time at work. Almost all of these meetings are at the employer's business and appreciate the fact that the employer allowed them to meet with us. And then the support that we give them to setup and access the retirement account. Many participants can't believe it's as easy as it is to manage their retirement account as we showed them. We often hear participants tell us that this is the first time they actually understand their retirement plan and why they should take more of an interest in this company benefit. And we often hear that the individual was afraid to meet, they didn't want to hear where they were financially or more importantly and didn't know how or what to do to improve their potential retirement income outcome. We hear from participants that they thought we were doing this to sell them other products, which is quite common and you'll see where participants are very quiet and we have to prod them. Beltz Ianni doesn't do that, our feeling is if we crossed that line, our credibility goes out the window and we are fully committed to the plan participants and the education that they need to be confident with the management of their personal retirement plan account.

Edward D: 15:49

Any specific stories about participants responding to the education process?

Bob N: 15:56

One, I actually tell quite a few participants, I had the opportunity to sit with somebody, I was at a business all day and it's about four o'clock and this older lady taps on the door and says, you know, I heard you're done, you're packing up and I didn't sign up for this. Would you be able to do anything good? Could I talk to you for a few minutes? I said, sure. Our file that we collected had everybody's data so I had her information in the TRAK system. So we sat down and she starts tearing up and she's telling me that she's a widow. She had to go back work and full time. She doesn't have anything. She and her husband really didn't pay attention, they didn't put anything away. She's just about 60 and she feels she's going to have to work til she dies. I said to her, let's look at the information. Let's see where you're at. And often I find that people are a lot better than they think they are. So we start going through it and she was saving 2% and we went through the TRAK payroll and she was able to easily, she thought, m ove h er d eferrals up to 10% a nd actually thinks that she could go to 15% within a few years or within a year I should say. And so w e go through that. So I'm 60, we talk about social security, obviously 62 for her or her husband's benefit wasn't g oing t o be large enough for her to live in a retirement lifestyle. So we started talking about holding out t il later. And by the time we get done and we project out to age 70 and I had her spouses social security statement, with her work in these 10 years, she actually was going to create a larger payment for herself. So her social security at age 70 plus what she would've put away based on her current lifestyle, we figured about 71, 72 she could stop working and be retired for the rest of her life. And when that ended, she got all choked up, broke down, she's like,"Oh my God, you just showed me something I never thought was possible. And when I lost my husband, I thought that that was the end of the world and I'd have to work until I died. And now I have a hope and a prayer that I'd be able to retire". Oddly enough or not oddly enough, but I go visit that client the next year and she comes racing into the meeting and she's already at 15% and she increased to 20% and she has a much better understanding of the account and the benefit of the program. And she was as happy as I've seen somebody in a long time. So it was quite a cool experience.

Edward D: 18:53

Michelle, do you have any stories that resonate with you?

Michelle C: 18:57

Yeah. You know, a lot of them are right along that same line where we meet with people who have never taken a look and planned for their retirement. One of the questions I ask in group meetings is, how many people have planned for a vacation this year? And almost all the hands in the room go up and how many people have planned for their retirement, which is hopefully the longest vacation of someone's life. Nobody has. So a lot of people really have a fear, they feel like they've under prepared for retirement planning a n d don't want to see it that first time. They can come in the room with a little bit of trepidation, but by the end of the meeting there's a huge sigh of relief. It's nice for them to know where they are. If they're off track, you know, what steps they can take to get where they need to be. I really feel that meeting with individuals and using the TRAK program is one of the job functions that we have the most impact on pe ople's l ives with, and it's really rewarding to be able to see that.

Edward D: 20:17

What do you hear from plan sponsors about their satisfaction?

Michelle C: 20:21

Most plan sponsors tell us that that's the first time they've actually seen participants actually interested in the retirement plan benefits. Plan sponsors report greater satisfaction and knowing their employees are being served and in a better position to understand what they need to do to help themselves be prepared for retirement. Participants actually come up to plan sponsors and thank them for allowing them time to meet with us and go through the program together. And participants comment that's the first time they actually understand what the company retirement plan benefit is and the value of that benefit.

Bob N: 20:59

The interesting thing that happens with a number of our clients that become new clients, anybody and any salesperson will know that it's difficult to get new business. And when you do, you're excited. But when you come in and your prospecting, everybody always has the best advisor. They always have the best program. And that's often the case when we have new opportunities and about six months to a year in almost every client will tell us that they didn't realize what they didn't know and they really appreciate the fact that the time is spent with their participants. They never thought they could get participation rate as high or participant satisfaction and engagement as fully experienced as they're getting now. And we don't mean that certainly egotistical or whatnot it's just a process. And we do that for every single client, whether it's a small million dollar plan or a$40 million plan, but at the end of the day, everybody thinks they've really got everything covered. And that's not quite the case for an awful lot of plans. And both Michelle and I get a lot of satisfaction out of helping both plan sponsors and participants achieve far more than they thought they really were getting.

Edward D: 22:30

Well, Michelle and Bob, thank you for taking the time today to interact. Tell us a little bit about your story. I appreciate the engagement and how you're helping participate and helping plan sponsors being satisfied, I wish you the best in today's marketplace.

Disclaimer: 22:53

this information was developed as a general guide to educate plan sponsors, but is not intended as authoritative guidance or tax or legal advice. Each plan has unique requirements and you should consult your attorney or tax advisor for guidance on your specific situation. In no way does adviser assure that by using the information provided plan sponsor will be in compliance with ERISA regulations, securities and advisory services offered through LPL financial, a registered investment advisor member, FINRA SIPC.