Category: Blog

Powerhouse LA Team Joins Strategic Retirement Partners

Doug Bermudez and Erin Hall have joined Strategic Retirement Partners (SRP), a leading national retirement plan aggregator. Through their retirement plan consulting practice in the Los Angeles area, Bermudez and Hall work with organizations to drive overall retirement plan health with a focus on three pillars of service; fiduciary process, plan design and administration efficiency, and participant outcomes.

When asked why their team is making a move to SRP, Erin Hall states, “SRP has a passion and commitment to the retirement plan industry that perfectly aligns with what Doug and I have built with the Bermudez/Hall Retirement Group.”

Doug Bermudez added, “We’ve known the SRP team for a number of years. When the time came for us to make a move, we knew that SRP would provide the collaborative environment, back office operations, technology, and human capital we need to continue to deliver exceptional service to our clients.”

This partnership expands SRP’s footprint into the key market of Los Angeles and brings their offices to 19 nationwide. Additionally, as part of joining SRP, the Los Angeles based team will have the resources and strength of Global Retirement Partners (GRP) at their fingertips. Global Retirement Partners is a nationally recognized leader in the retirement plan consulting space, surpassing $38B in plan assets with over 4,200 plan clients.

Doug has over 25 years of tenure in the financial services industry and was with Wells Fargo Advisors since 2007. Erin joined Doug in 2012 after over a decade of working with corporate retirement plans. The team is leaving Wells Fargo Advisors, where they had been providing high-level service to both corporations and individuals through comprehensive financial advice.

“The commitment that Doug and Erin have shown to their clients and our industry is what initially caught SRP’s attention,” shared SRP’s Managing Partner, Jeff Cullen. “But what excites us more is their alignment with our culture and core values.”

 

About Strategic Retirement Partners
Strategic Retirement Partners is a nationwide independent retirement plan consulting services firm dedicated to providing guidance in decision-making and problem solving to employers and sponsors of retirement plans. With offices from coast to coast, Strategic Retirement Partners currently consults on over 720 corporate and non-profit plans and $10 billion in assets as of April 1, 2019.

 

 

Doug Bermudez, Erin Hall, and Jeff Cullen are registered representatives with and securities offered through LPL Financial, Member FINRA/SIPC. Investment advisory services are offered through Global Retirement Partners, an SEC Registered Investment Advisor. Global Retirement Partners and Strategic Retirement Partners (SRP) are separate entities from LPL Financial.

Global Retirement Partners employs (or contracts with) individuals who may be (1) registered representatives of LPL Financial and investment adviser representatives of Global Retirement Partners; or (2) solely investment adviser representatives of Global Retirement Partners. Although all personnel operate their businesses under the name Strategic Retirement Partners (SRP), they are each possibly subject to differing obligations and limitations and may be able to provide differing products or services.

Student Debt and Your Retirement Plan

For many employers student debt assistance is the next frontier in employee benefit design. And with over $1.4 trillion in student debt, second only to mortgage debt for Americans, it’s easy to see why.*

In August of 2018 a private letter ruling from the IRS that stated, under certain circumstances, an employer can link 401(k) match to student loan repayments outside the plan. You may be thinking, what does one have to do with the other. Considering that  college graduates with student debt accumulate 50% less retirement wealth in their 401(k) by age 30 than those without**, this type of program could be key in boosting this groups retirement savings.

One interesting factor is that adding student debt program like Flexmatch would likely not increase employer costs, instead just shifting them from one bucket to another, while offering an attractive option to those who may be dealing with conflicting financial priorities.

For more information on student debt matching program, contact your SRP Managing Director.

*Federal Reserve Bank of New York

** Center for Retirement Research at Boston College http://crr.bc.edu/wp-content/uploads/2018/06/IB_18-13.pdf

How Many Investment Options Should You Offer?

Many plan sponsors struggle with deciding how many investment options to offer in their retirement plans. While people generally like to have lots of options when making other decisions, having too many plan options can potentially lead to poor investment decisions by plan participants. In addition, increasing plan options can also increase plan costs, as well as the administrative paperwork associated with the plan.

In a study on retirement plan options, researchers concluded that it is possible to present plan participants with too many options.1  The researchers began by offering people selections of jams and chocolates. Some were offered a wide variety, while others received less choices. The wide variety of jams attracted more attention from people, but more people purchased jams when offered limited choices. When sampling chocolates, people enjoyed choosing from the larger selection more, but also were more dissatisfied with the choices. Those who sampled from a smaller selection were more satisfied and more likely to buy chocolates again. In other words, as the number of options increased, people became more concerned by the possibility of making the “wrong” choice–they became uncertain that they had made the best choice possible.

Chocolates and jams aren’t very big decisions, but the researchers found that these same behaviors carried over to retirement plans. They examined participation rates for 647 plans offered by the Vanguard Group, a large investment management company, covering more than 900,000 participants. They found that as plans increased the number of options they offered, employee participation decreased. In fact, for every 10 options added to the plan, participation dropped by 1.5-2 percent. Plans offering fewer than 10 options had significantly higher employee participation rates.

In addition, more plan options can increase costs both for participants, in the form of fees, and for plan sponsors, who may face additional administrative charges from third party administrators for additional options. Further, auditing and other costs may increase, since the number of options could increase the time necessary to conduct audits.

It’s important to balance choice overload against the requirements of ERISA Section 404(c) which requires plan sponsors to have at least three diversified investment options with different risk and return characteristics.

 

1 http://www.columbia.edu/~ss957/articles/How_Much_Choice_Is_Too_Much.pdf

Washington Update

A number of bills are moving rapidly through the House and the Senate that would (if passed and signed) enhance the retirement plans of many Americans. While these bills continue to morph, below is a general description of provisions as of early April 2019.

Retirement Security & Savings Act
Senators Rob Portman (R-Ohio) and Ben Cardin (D-Maryland) introduced the Retirement Security & Savings Act in December 2018 and have reintroduced it in 2019. The Act is considered to be as sweeping as prior legislation, specifically the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) of 2001, and Pension Protection Act (PPA) of 2006. Proposals that would impact governmental plans include:

  • Eliminate the 457(b) “first day of the month” rule
  • Permit 457(b) plans to allow in-service distributions at age 59½ rather than 70½
  • Eliminate the Required Minimum Distributions (RMD) from Roth 457(b)
  • Allow rollovers from Roth IRAs to Roth 457 plans
  • Allowing non-spousal beneficiaries to roll assets into their employer-based plans\
  • Updating the mortality tables used when calculating RMD at age 70½
  • Exempting small accounts (less than $100,000) from the RMD calculation
  • Creating an additional catch-up option for participants over age 60
  • Simplifying auto-enrollment participant notices
  • Allowing employer matching to retirement plans for student loan payments

Retirement Enhancement and Savings Act
Representatives Ron Kind (D-WI) and Mike Kelly (R-PA) introduced the Retirement Enhancement and Savings Act (RESA) in February. While RESA is primarily aimed at private sector plans, it does include a provision that would allow more time for terminating participants to repay outstanding plan loans.

Secure Act
The Setting Every Community Up for Retirement Enhancement Act of 2019 sponsored by Richard Neal (D-MA) and Kevin Brady (R-TX) has passed unanimously out of the House Ways and Means Committee as of early April and will go to the full House. This bill includes the core provisions of RESA making smaller employers able to join multiple employer plans and includes a safe harbor for selecting lifetime income providers in defined contribution plans. The latest provision of Lifetime Income Disclosure Act (LIDA) has been challenged by plan sponsors as being inflexible. More on both RESA and Secure Act as they move through the House and Senate, but they appear to be supported by both parties and will likely go to Conference Committee and head to the White House.

NAGDCA Legislative Priorities
Each spring, the NAGDCA Executive Board visits congressional representatives in Washington DC to advocate for governmental retirement savings plans and participants. In addition to some of the above proposals, the Board is advocating for:

  • Eliminating the “First Day of the Month” rule for 457(b) plans
  • Allowing participants to roll Roth IRAs into their plan accounts
  • Exempting Roth contributions from the RMD calculation
  • Preserving important unique plan features, including allowing both pre-tax and Roth options; maintaining the 10% early withdrawal penalty exclusion in 457(b) plans; and maintaining both traditional and over-50 catch-up provisions.

Please consult with your SRP Managing Director for more information on the status of pension proposals and how they may affect your plan.

Spring Cleaning for Your Retirement Plan

Spring is in the air and now could be a great time to do a little spring cleaning for your retirement plan. Here’s a few quick things you can do help ensure your plan is in tip top shape:

Fiduciaries and Investments
1. Review your plan governance documents to make sure none of your plan fiduciaries need to be updated.
2. Make sure that your ERISA bond and fiduciary insurance is up to date and reflects the correct amounts for your plan.
3. Confirm that you have all copies of your plan investment reviews and any minutes. In addition, check to be sure any action items from the minutes are completed.

Operations and Procedures
1. Take a look at your current procedures for things like loans, QDRO’s, distributions, and enrollment to be sure they don’t need updating.
2. If you’ve had any changes in your HR or benefits staff that handles the plan, be sure that the procedures they are following match your plan document and operational procedures.
3. Make sure you have copies in your files of any notices or communications to participants along with the date and method they were distributed.
4. If you have any terminated participants with balances, make sure you are following a process to contact them and for small balances completing the force out process.

For any questions on spring cleaning for your plan or more information, please contact your SRP Managing Director.

Please Join Us for a SRP Participant Education Webinar

 

Attention all SRP Retirement Plan Participants!

REGISTER NOW for the second event in the 2019 Participant Education Webinar Series!

As advisors we’re often asked questions like:

  • “How much is enough?”
  • “Will I ever save enough?” 
  • “When is enough really enough?!”

It’s important to identify your retirement savings goals so you know what you’re aiming for. These goals can vary greatly; there’s no “one size fits all” approach. SRP invites you, our Retirement Plan Participants, to join our advisors, Shannon Maloney (Managing Director, Michigan) and Lisa Petronio (Managing Director, Upstate New York) for a 30-minute live event where we’ll explore the realities and bust the myths of retirement goal setting. We’ll share tips on how to set realistic goals and, most importantly, take steps throughout your career to pursue them. Retirement Plan

Participants: Join our webinar on Tuesday, May 7 @ 1:00 EST / 12:00 CST / 11:00 MST / 10:00 PST.

Register in advance: https://tinyurl.com/SRP2Q

Even if you cannot attend the meeting live, a recording will be made available to all registrants.

 

 

 

 

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advisory services are offered through Global Retirement Partners, an SEC Registered Investment Advisor. Global Retirement Partners and Strategic Retirement Partners (SRP) are separate entities from LPL Financial.

Global Retirement Partners employs (or contracts with) individuals who may be (1) registered representatives of LPL Financial and investment adviser representatives of Global Retirement Partners; or (2) solely investment adviser representatives of Global Retirement Partners. Although all personnel operate their businesses under the name Strategic Retirement Partners (SRP), they are each possibly subject to differing obligations and limitations and may be able to provide differing products or services.

Strategic Retirement Partners Expands in Texas

Ann-Marie Sepuka and her team have joined Strategic Retirement Partners (SRP), one of the leading retirement plan aggregators in the US. For over two decades, Ann-Marie has worked with companies to help them implement retirement plan solutions that give their employees the confidence in saving for retirement.

When asked why she is making a move now, Ann-Marie states, “I am constantly looking for new ways to add value to our loyal client base. SRP’s operational support and technology solutions allow my team to focus on what I love to do, which is find fresh new approaches for my current and prospective retirement plan clients, while feeling confident that those operational tasks are in the best hands. In addition, the advisor network at SRP offers an environment where collaboration amongst like-minded peers is the norm.”

As part of joining SRP, Ann-Marie will additionally have the resources and strength of Global Retirement Partners (GRP) at her fingertips. Global Retirement Partners is a nationally recognized leader in the retirement plan consulting space, surpassing $38B in plan assets with over 120 offices and 220+ of the country’s leading financial advisors.

Ann-Marie’s career in the financial services industry spans over two decades. She was an officer at First Union Bank in Miami and later managed her own tax-consulting firm, which focused on corporate tax accounting services. Ann-Marie then hung up her CPA hat and joined Raymond James & Associates as a financial advisor serving both corporate retirement plans and individual clients. She joined The Noble Group in 2006 to serve as manager of their Corporate Retirement Plan team.

“Ann-Marie and her team make a fantastic addition to SRP,” SRP’s Managing Partner, Jeff Cullen, shared. “She brings passion, honesty, and detailed approach to this work. Ann-Marie offers measurable outcomes and solutions to companies who are holistic about their benefit plans- employers who want to look beyond a traditional plan.”

About Strategic Retirement Partners
Strategic Retirement Partners is a nationwide independent retirement plan consulting services firm dedicated to providing guidance in decision-making and problem solving to employers and sponsors of retirement plans. With offices from coast to coast, Strategic Retirement Partners currently consults on over 720 corporate and non-profit plans and $10 billion in assets as of April 1, 2019.

 

 

 

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advisory services are offered through Global Retirement Partners, an SEC Registered Investment Advisor. Global Retirement Partners and Strategic Retirement Partners (SRP) are separate entities from LPL Financial.

Global Retirement Partners employs (or contracts with) individuals who may be (1) registered representatives of LPL Financial and investment adviser representatives of Global Retirement Partners; or (2) solely investment adviser representatives of Global Retirement Partners. Although all personnel operate their businesses under the name Strategic Retirement Partners (SRP), they are each possibly subject to differing obligations and limitations and may be able to provide differing products or services.

Elite Advisor Groups Unite

Global Retirement Partners, LLC (GRP) and Strategic Retirement Partners (SRP) announced on Monday, April 1st, a strategic partnership designed to leverage their respective company’s core competencies and create industry leading scale. This transaction will add 17 SRP offices with $10B AUM to GRP, LPL’s largest retirement plan focused hybrid RIA, with nearly $40B in AUM. This partnership will bring together two of the industry’s premier thought leaders and innovators. SRP will gain access to GRP’s cutting‐edge products and services, compliance expertise, and back office support. GRP advisors will have the ability to leverage SRP’s innovative Plan Advisor practice management platform and advisorcentric technology. SRP’s business model empowers advisors to focus on clients and growing their practices while the SRP team streamlines mandatory business functions.

Hailing the partnership as industry changing, GRP CEO Geoff White explains, “As margins continue to compress, and increased complexity becomes the new normal in the plan space, we know advisors are looking for much more from their RIA. They are looking for size and scale to obtain pricing efficiencies across products and technologies. They are looking for robust and differentiating solutions to identify new opportunities and revenue streams. Most importantly, they are looking for the technology and support that will allow them to streamline their office operations so they can spend more of their time winning business. This strategic partnership supplies that and much more. It’s a game changer.” White further adds “I have known Jeff Cullen for many years and have always been a big fan of him and what, under his leadership, SRP has built‐ our core values could not align better. Together, I have no doubt that we can really move the needle in this industry and take it to the next level. We’re very excited.”

SRP Managing Partner Jeff Cullen also sees this union as having a huge impact on the industry. “This is a small industry where the major players all know each other. In exploring our strategic partnership options, we were looking for a relationship where 1+1 could equal 3 for our clients, advisors, and the industry more broadly. We’ve always placed a high value on intellectual capital and values alignment and this partnership has it in abundance. Together, there’s no advisor’s practice or firm that we can’t aim to accommodate, improve upon, provide potential for better participant outcomes, and provide succession for the advisor. The experienced advisors and executive teams that make up the ownership and membership of these two entities are skilled and special. In our discussions, everything begins and ends with creating a better and more dignified retirement for America’s workers. That’s our North Star; taking care of people. We are confident that together, SRP and GRP, can fulfill that mission as well or better than any firm in our industry, and we intend to prove it.”

SRP officially registered with GRP on April 1st, 2019. Combined, the companies retain nearly $50 Billion in AUA, over 4,200 plan clients, making GRP one of the largest aggregators in the industry. But size and scale weren’t the only factors in deciding to partner, both firms were adamant that there was a cultural fit. SRP COO Deane Mayerhofer explains, “It was vital to both SRP and GRP that we were culturally compatible. It was a deal breaker for us. We spent a great deal of time together, both professionally and socially, exploring our respective cultures and evaluating how they would mesh. In the end, it was apparent to both groups that it was a perfect fit.”

 

About GRP
Global Retirement Partners is an SEC Registered Investment Advisor with 236 advisors in 125 offices nationwide. Headquartered in San Rafael, CA and known for industry thought leadership, GRP was established as Financial Telesis (FTI) in 1992 and became GRP in 2014 when FTI was acquired by a group of industry leading plan advisors. GRP maintains corporate offices in San Rafael and Carlsbad, CA.

About SRP
Strategic Retirement Partners is a nationwide independent retirement plan consulting services firm dedicated to providing guidance in decision‐making and problem solving to employers and sponsors of retirement plans. With offices from coast to coast, Strategic Retirement Partners currently consults on over 700 corporate and non‐profit plans and $10 billion in assets as of April 1, 2019.

 

 

 

Cosmo Gould, Geoff White and Jeff Cullen are registered representatives with LPL Financial. Securities offered through LPL Financial, Member FINRA/SIPC. Investment advisory services are offered through Global Retirement Partners, LLC, an SEC registered Investment Advisor. Global Retirement Partners, LLC and Strategic Retirement Partners (SRP) are separate entities from LPL Financial. Global Retirement Partners, LLC employs (or contracts with) individuals who may be (1) registered representatives of LPL Financial and investment advisor representatives of Global Retirement Partners, LLC, or (2) solely investment advisor representatives of Global Retirement Partners, LLC. Although all personnel operate their businesses under the name Strategic Retirement Partners (SRP), they are each possibly subject to differing obligations and limitations and may be able to provide differing products or services.

Student Loans or Credit Card Debt—Which Do I Pay Off First?

Pete the Planner puts together a motivating and realistic blog and website for financial planning. Here he answers a question that so many have been faced with; how to prioritize your debts. In this post, he gives a simple equation on his reasoning, in a light-hearted tone.

Pete ranks it as the following:
1. Pay off all student loans. Those are usually at an extremely high rate and many people don’t know the interest is still being charged even though payments aren’t due until after graduation.
2. Make arrangements to create an emergency fund.
3. Work on paying off your credit card debt completely.

Click here to read the full post.

SALT State and Local Taxes: How Nonqualified Plans Can Help Protect Retirement Income

Fulcrum Partners shares, the tax overhaul signed into law in December 2017 (Tax Cuts and Jobs Act) set a $10,000 cap on state and local tax (SALT) deductions that can be taken from US federal income taxes. High-income earners who live in areas where state and local taxes are steep, such as California, New Jersey, New York and many other venues, are getting an eye-opening wakeup call as they face the impact of their first tax season under the new laws.

Some residents in high SALT states have chosen to relocate to more tax-friendly parts of the country. Others have tried to relocate on paper without actually doing so—a workaround that doesn’t always bode well for the taxpayer.

High-Earners Cutting Back on SALT: State and Local Taxes
Given that many high-earning executives spend a great deal of time traveling and that they may own or lease multiple homes, accurately identifying which city and state is their official state of residence can get into interesting gray areas.

Consider this example where a dog proved he’s truly man’s best friend.


A New York executive accepted a high-profile CEO position with one of his company’s subsidiaries based in Dallas. After a period of commuting between the Big Apple and the Big D, the executive decided he like Dallas enough to rent an apartment there, lease a car in Texas and join a local gym. He filed state and federal taxes as a resident of Texas.

Two years later, the executive was promoted again, and returned to New York. The State of New York then attempted to collect two years of state taxes, nearly a half million dollars plus interest and penalties, claiming that the executive had never truly relocated to Dallas at all.

A judge however, ruled in favor of the executive based on the fact that he ultimately had relocated his elderly dog to Texas, which in the eyes of the judge made it an official move.

Rarely is the issue of where an executive spends most of his or her work time or whether the executive owns or rents residential property in the new city sufficient for determining the authenticity of the move. Many details, and not always a lot of logic, can come into play in determining whether a person has sufficiently demonstrated a change of lifestyle, such that it constitutes a true relocation. Even relocation plus retirement may not always, protect your earnings from the long arms of a state where you previously lived as a taxpayer.

Source Tax Law – Nonqualified Plans Can Help Protect Retirement Income from Taxation by Former States of Residence
Typically, an individual is subject to income taxation by the state in which he or she lives when the income is received. Some states, however, attempt to tax nonresidents on this income on the basis that it was earned, or had its source, in the first state.

Retirement income has always been a key target of this type of state taxation. Under the federal “Source Tax Law,” however, retirement income meeting certain conditions will be taxable only by the recipient’s state of residence at the time of payment, regardless of its “source”.

The Source Tax Law generally protects current nonresidents from being taxed on retirement income by states where they previously lived while employed. It covers retirement income paid from tax-favored vehicles such as tax-qualified retirement plans and IRAs. It also protects income from nonqualified deferred compensation arrangements if the income either is paid from a certain type of plan or in substantially equal periodic payments over life or life expectancy or a period of at least ten years. Thus, properly structuring deferred compensation payouts (including compliance with Internal Revenue Code § 409A may provide significant state tax savings, depending on the states involved.

To learn more about the impact of state and local taxes on retirement earnings, contact the team of executive benefits professionals at Fulcrum Partners.

Reposted with permission from Fulcrum Partners. View their article here.