PLANADVISER - November/December 2019 - 33

point to align with that adviser, says Gary Tankersley, head
of sales and distribution for the firm, in Denver. " Getting on
the same page with the adviser is a critical step because the
adviser exercises a lot of influence over the plan, " he says.
Advisers trying to determine how to effectively serve
mid-market clients alongside micro plans may want to see
how TPAs approach scale and efficiencies. For instance,
ABG Retirement Plan Services (ABGIL) has been able to
serve micro plans, which compose 90% of its client base, by
also serving large plans with as many as 5,000 employees,
Blossom says. In this way, his company " amortizes the cost
of the fixed services " it provides, he says.
" Once you have a diversified book of business, you can
create scale and offer the same tools to the small plans that
you offer to the large plans, " agrees Scott Patton, senior vice
president of business development at ABGIL.
Pooled Plans
One way advisers leverage the scale of TPAs is to pool plans
together. " Creating scale is very important, and the best
vehicle to do that is a pooled retirement plan solution such
as an open MEP [multiple employer plan] or by pooling funds
through associations, " says Jim Kais, senior vice president of
retirement plans at Ameritas in Lincoln, Nebraska.
" You can use a principles-based plan design with a
master prototype document that sets the design to promote
the best outcomes for participants; sets defaults for the
safe harbor; restricts loans; and encourages higher levels
of savings and consistency across all plans in this pooled
vehicle., " Kais says. " TPAs can handle 25% to 50% more business
when they work in this fashion. Plus, they can process
data more efficiently, faster and with less error. "
To keep costs down and broaden the availability of a
plan, it can be necessary to streamline its features, limiting
flexibility in them-e.g., creating a limited adoption agreement
with limited features, to cut costs, Blossom says. Some
TPAs find success eliminating the potential for more exotic
plan design that requires " more energy and expense [such
as] new comparability plans that leverage contributions to
the higher-paid individuals, " he says.
Along with that strategy, it is imperative to " make all
of the plans the same, so when you are administering that
block of plans, they're all operating under the same provisions
such as the same eligibility, " Patton says.
A critical aspect of this streamlining is to have " a pareddown,
straightforward investment menu, " Blossom says.
" That saves a lot of time for the recordkeeper, the third-party
administrator and the adviser in implementing that plan. "
Besides scaling plan design, pooled plans also provide
value in investment options. " We use a group trust to pool
the investments to get better pricing, " Patton says.
An adviser will want to ensure the TPA is appropriate
for his client base. Some have specialties. For example, TCG
Administrators in Austin, Texas, which pools plan investplanadviser.com
November-December 2019 | 33
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