Back Method to Reduce Retirement Plan Fees

colton Sep 24, 2007 4:33 PM
For those clients who offer their ees a retirement plan, here's how you can look like the "BENEFITS GENIUS". Using $ 25 as an average for the per head annual administration cost, one can quickly do the math and make a great case for pre tax supplemental absorbing the plan cost. Here's a good example: Company A has 75 employees. The annual maintence on the ret. plan would run $25 x 70 = $1750. Let's assume we sell only 1 supp product , say a cancer policy. Monthly Average Employee Section 125 expense: $ 25.57 @ 70% participation Employer FICA Rate: 7.65% Number of Payrolled Employees: 75 Monthly Employer Total FICA Savings: $1228.50 $1228.50 off the $1750 ret. admin. fee....not bad, huh??? The approach. As a part of your fact finders, knowing who has retirement plans in place can be a great selling opportunity for voluntary benefits. "Mr Customer, by offering a cancer plan to your employees you could SAVE big dollars on your 401k fees.Let us show you how." If you double the product offering, you double the FICA savings!! Now you've paid the retirment plan admin fee in toto. For more assistance call and ask for Barry @ 866 252 2906.
colton Sep 24, 2007 4:35 PM
For more assistance call Barry @ 866 525 2906
marfinancial Oct 4, 2007 2:47 PM
My agency is a benefits agency with over 25 years experience in designing, shopping, implementing, and communicating employee benefits plans, including voluntary worksite marketed suppliment plans and retirement plans, The approach suggested by this author is deceptive and unethical. The employer does not actually reduce their retirement plan expenses by implementing a section 125 pre tax plan. Nor do the retirement plan participants enjoy any reduction in the plan expenses or loads that are charged against thier earnings. What you might say to an employer is: "You can save employer taxes FUTA, FICA, and st unemployment tax that can offset your assessed retirement plan administration costs by allowing your employees to pre tax their contributions to eligible insurance plans that are written in a Section 125 plan." We have enough problems with agents who mislead clients and their employees, and misstate rules, laws, regulations, and plan provisions, without this kind of slipshod marketing.

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