PLANADVISER - November/December 2019 - 34

micro scope
ments through co-ops, primarily specializes in K - 12 schools
and governmental entities, says Scott Hauptmann, chief
operating officer (COO) and executive vice president. " The
efficiencies we achieve are through the economies of scale. ...
The co-op has one fund list that allows really small districts
with as few as 30 employees to get the same purchasing
power as Dallas Independent School District. "
Conversely, a company such as John Hancock Retirement
has the scale to oversee micro plans in a wide variety
of industries. " We need to be able to offer a solution that's
efficient for the plan sponsor and not cost-prohibitive; to do
that, you need to simplify your approach, " Tankersley says.
" You need to reduce the number of options that the microplan
sponsor has to choose from-but with a mindset that
you understand the different types of companies that are
out there. So, we don't offer a one-size-fits-all approach
but, rather, streamlined solutions that are appropriate for
different types of industries, be it a dentist's office or a
manufacturing plant. "
Other benefits advisers might seek access to when
working with TPAs would be additional
wellness and advice services.
According to Kais, " TPAs struggle
with offering advice or student loan
repayment programs because it's
hard for them to get scale. But when
you have 2,000 businesses in a pooled
product, you can offer micro plans
access to services typically not available
in their market. "
One such tool that ABG offers
plans of all sizes is SmartPlan, an
education tool that informs participants
" on a wide range of topics, from
what a retirement plan is all about to
how much to contribute and invest, "
Blossom says.
Big Data
One of the biggest challenges smallbusiness
owners face when setting
up a retirement plan is " getting the
data on their participants, " Tankersley
says. In his opinion, a TPA should
be affiliated with a payroll company
or become a payroll administrator so
it can upload a plan sponsor company's
data onto the TPA system. " TPAs
can set the data quicker and more
completely than plan sponsors can, "
he says.
In fact, TSC of Edina, Minnesota,
performs this very function for its
micro-plan clients, says Matthew
Styler, vice president. " We often
partner with their payroll firm and
have it send the company's payroll
data directly to us, so we can manage it efficiently for the
employer, " Styler says. " We really try to solve for the data
manipulation challenges that many small employers have.
It's often difficult for them to know what data is needed from
their payroll to manage the various benefits they offer. "
Likewise, Tycor Benefit Administrators links the census
forms of its micro-plan clients to their plan documents, " so
we know what a plan calls for, for compensation, " Collopy
says. The firm has its clients sign a form giving it permission
to file Form 5500 for them, Collopy says.
With Ascensus' approach to its TPA business, " the plan
sponsor has a local TPA close by to help it with any issues, "
Bramlett says. " That's why TPAs are critical in helping with
plan formation and administration. "
Managing workflow in a systematic manner is yet another
way to serve micro retirement plans efficiently, notes Amy
Haddan, vice president of The Benefit Advantage in Auburn
Hills, Michigan. " We have created a process for tracking how
we manage plans that is the same, whether a plan has a
handful of participants or 20,000 participants. " -Lee Barney
3(16) Fiduciary Services
Y
et another way advisers can efficiently serve micro plans through thirdparty
administrator (TPA) offerings is by finding TPAs that provide 3(16)
plan administration services, says Jim Kais of Ameritas. As established by
Employee Retirement Income Security Act (ERISA) Section 3(16), the plan administrator
is the fiduciary responsible for overall governance of the plan. " This
means it is focused on the operations of the plan, such as administering loans
and distributions, " Kais says. " TPAs to micro plans often take on this role, and,
by limiting plan design and not giving sponsors or participants too much choice,
they can fill this 3(16) role with less risk, because there aren't too many nuances. "
" The key thing to understand about the administrator role is that it's the final
frontier-clients have many viable options for getting help with fiduciary responsibility
for plan investments, " says Pete Swisher, senior vice president and national
practice leader for Pentegra Retirement Services, in Lexington, Kentucky. " On the
other hand, many clients experience headaches, costs and formal corrections
related to plan administration. "
When offering 3(16) services, " a good TPA will be very experienced in all of
the rules and regulations governing a plan, " says Jerry Bramlett of Ascensus.
" They will be able to help the sponsor make decisions with regard to plan design
and administration, such as helping them know how much a match or vesting
schedule will cost them. And once the plan is installed, the TPA will take care of
many of the administrative and regulatory duties, such as handling notices that
need to go out to participants, making sure they go out on time and keeping plan
documents up to date. "
Services such as this can enable plan advisers to spend the limited time they
have with a plan sponsor client addressing whatever best fits its service model.
" The specialization needed to stay current with the minutia of plan rules is something
the adviser can rely on his TPA to handle, allowing the adviser to build
scale in this market by bringing his skill set to the unique fiduciary needs of this
market and building education modules for participants, " says Kelton Collopy of
Tycor Benefit Administrators. -LB
34 | planadviser.com November-December 2019
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PLANADVISER - November/December 2019

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