Products July 28, 2011

The Principal Releases EASE Program for Sponsors

The Principal has launched a new program that is designed to help plan sponsors save time and money, and reduce the burdens of retirement plan administration.
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The Principal’s EASE Program – Employer Administrative Solutions made Easier – unites a suite of distribution, recordkeeping, plan compliance, payroll, and third party administrator services in one package.

Plan sponsors may be able to save time and money, as well as ease of communication with clients, by transferring their administrative jobs to The Principal. The program includes a written service warranty that may provide plan fiduciaries with a level of indemnification protection.

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“We understand employers need time to focus on running their businesses,” said Doug Grove, vice president, national sales director of retirement services. “We are so confident in the Principal EASE Program that we back it up with a written service warranty. If we’re ever unable to fix a service problem to the client’s satisfaction, we will waive the fee for the service.”

Data & Research July 28, 2011

Cerulli Identifies Niche Retirement Market Opportunities

A recent Cerulli report says that while "primary" retirement markets represent nearly $14 trillion in 2010, Cerulli identifies six niche markets currently representing $1 trillion.
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The report, “The Cerulli Edge: Retirement Edition,” says 401(k), 403(b), public and private defined contribution and defined benefit plans, and traditional and Roth IRA plans get the most attention since they are responsible for $14 trillion in 2010, there are burgeoning areas of growth and asset-gathering potential for firms willing to look beyond the crowded mainstream retirement markets.  

The six niche opportunities examined in Cerulli’s research include: 

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  • Taft-Hartley Plans: In an effort to improve their funded ratios, these plans are primed to increase their allocation to international investments as they seek to improve performance. 
  • Nonqualified Deferred Compensation Plans (NQDCP): As economic conditions improve, hiring activity will lead employers to consider enhancements to benefit plans, such as adding a NQDCP, in order to gain an edge in the competition for talent.  
  • 457 Plans: While-asset gathering opportunity is limited and specific, firms that are able to offer a 403(b) plan together with a 457 plan are poised to win assets as this combination allows for the creation of higher balance accounts. 
  • 412i Plans: The asset manager opportunity is limited due to requirements related to the funding vehicles used in these plans. There are opportunities, however, for B/Ds and insurance companies because plans are attractive to small, but very profitable businesses, typically characterized by highly compensated, late-career professionals with significant assets. 
  • Small Business IRAs: With 70% of small business owners not saving for retirement in any vehicle, these plans provide the solution, and thus can’t be ignored by firms seeking asset-gathering opportunities.  
  • Solo 401(k) plans: Current growth is positive for these plans and may be augmented by Baby Boomers who, working past retirement age, may see the flexibility of a sole-proprietorship arrangement, and desire to continue to save for retirement through this familiar vehicle.  

The report is available for purchase from Cerulli.

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