Confluence Financial Partners has consistently delivered world-class investment services to our diverse clientele. In fact, Confluence was established to set a new standard for a superior client experience. Learn how Confluence now offers business leaders that same level of excellence in enterprise-wide support services — from comprehensive equity plan administration to participant support and education. Join host and Partner of Confluence Financial Partners, Greg Weimer, along with his guests and newest members of the Confluence team, Mario Haifa, Director of Insurance Consulting, and Brian Stout, Director of Retirement Consulting, as they explore how customized voluntary benefits and 401k plans can benefit you, your employees, and your business. You’ll learn about the opportunities and challenges facing employers and employees alike and options that empower both. If you’re interested in learning how high-performing organizations advance their business through benefits, or how your business might benefit from a review of your current offering, this is the episode for you.

Podcast Transcript

Greg:

Roughly 31% of those that have access to a 401k are not participating1. Imagine that.

Greg:

This is Greg Weimer, partner with Confluence Financial Partners. Welcome to our Imagine That podcast. Today’s an interesting day. Well, first of all, it’s interesting because we’re in our new building in the South Hills, so that’s fun. So, this is our first podcast. It feels meaningful that we’re in our first podcast, in the new building, but also, we have two newer associates with us, Mario Haifa, and Brian Stout. I’ll get into who they are in a minute, but for the listeners, whether you’re a current client or potential client, or just an interested listener, you know, if I were you, I’d be saying, okay, so why in the world would I listen to this? This is a corporate services. I’m not a corporate. And like, what is that? We’re going to intro our corporate services department and why we think it’s so important to helping folks improve their outcome.

 

Second, we’re going to talk about trends in the 401k and benefits arena. And then third, we’re going to talk about what we need to do together to improve outcomes. And so right now someone’s saying, okay, that’s cool, but I’m not an employee. I’m already retired, does this matter to me? And I would say that if you have a child, if you have a loved one, if you know someone that owns a business, this is major stuff going on right now. And if you care about them and you really want to help them increase their outcome, if you could just help them think differently about how they’re organizing their benefits, how they’re preparing for their retirement, there’s an epidemic going on right now with, I think people not being prepared. I think it’s a virus. Coronavirus, hopefully, God-willing, is coming to an end.

 

The virus that continues is, there are people that working today that have— they do not have a likelihood of being able to retire and they have to work, and they don’t have financial freedom. And that’s tragic. It’s tragic for employers, tragic for employees, because if an employer has an employee that would rather not be there, that’s not good. And then there’s people that aren’t fully protected. There’s benefits that we need to make sure people have that in case there’s an unexpected setback, are they covered? And so, you know, this is an important, it’s an important conversation. It’s important conversation for the community. So just think as you’re listening, you know, who can I talk to? How can we help? And working together, we can really make a difference in people’s lives. So Brian, if you could introduce yourself and you know, a little bit about, you know, where you’ve been and then why you came to Confluence Financial Partners, and then we’ll turn it over to Mario. I get to rest. Go ahead, Brian.

 

Brian:

Thanks Greg. My name is Brian Stout. I am the Director of Retirement Consulting and I have been in the retirement industry for, I guess, going on 25 years now. And I’ve spent time working with national retirement plan recordkeeping companies. I’ve spent time at smaller regional retirement consulting firms and recently joined Confluence a few months ago and really just joined because I loved Greg’s passion. And I love the passion here at Confluence to change people’s lives, to make differences, and to really have my fingerprints on the process of helping small-to-midsize companies in the region, as well as helping their participants, you know, reach their retirement goals. And that’s, that’s what my job is all about. And that’s what I wake up and enjoying doing every day.

 

Greg:

Wonderful. Mario.

 

Mario:

My name is Mario Haifa. I’m the Director of Insurance Consulting here at Confluence Financial Partners, representing Corporate Services, had the pleasure of working in the insurance business for over 20 years. I’ve had the opportunity to represent mostly on the voluntary benefits side. A lot of you may have heard of the Aflac duck. That that was my previous background for a long time, served in various roles, but primarily working with small-to-midsize business owners in the community here in Western Pennsylvania, throughout Pennsylvania and nationally. The why, why Confluence made an opportunity for me to be here. I just loved their foundational approach and how they take care of their clients. And when Greg and I talked last fall, and we just started talking about what, what Confluence does. And the years I served in the insurance business, it just made so much sense to bring that years of experience into a firm like this and serve their clients and not only their existing, but future clients differently. And I think Greg said it better, best earlier — how does benefits play a role in your retirement and your future? And I truly feel benefits can have an important impact on the decisions you make today to protect tomorrow’s investments that you’re making.

 

Greg:

Welcome both of you. So fired up to have you. And I’ll just give you an insight like just yesterday morning — it was morning, right? — when we went in the whiteboard room, that was like fun. So we go into, so we’re saying, how do we reinvent, you know, corporate services? How do we really help employees and employers? So we went in, we have a room here that’s — all four walls are — is a grease board. So we went in there with markers, scribbled all over the walls, and really, we were brainstorming about how we can help employers and employees. So, okay, I gotta — let’s just, for me, it’s an elephant in the room. What in the world’s up with that duck? Let’s start there. Like everybody, everybody talks about like Aflac and voluntary benefit, you know, and like, the kid from Johnstown, right, that just thinks the duck is like a cool commercial. What’s the importance of a voluntary benefit that Aflac would represent?

 

Mario:

Absolutely. And Aflac certainly is the biggest player in the marketplace, but ever since the duck, through evolution of benefits, and one thing I’ve noticed over the last 20 years, a lot of different companies entered the space. And the why behind it is, you know, health insurance and benefits offered at an employer through a corporate insurance spend are essential to a foundational approach to benefits. You know, they take care of your hospitals and doctors when you get sick or hurt, right? But one of the things that always seem to be a blind spot and why I felt voluntary benefits played such an essential role in the overall benefit package of an employee offering was that out-of-pocket exposure that was the blind spot. And most employers—

 

Greg:

Could that be the deductible, or no?

 

Mario:

It could be the deductible, but mostly, and a question I ask employers all the time, what do you have in place if your employee had to leave work because their spouse or child was going through something? Some of them will say short-term disability, but that covers the employee. And I remind them to say, if their employee or spouse was going through a major accident or illness. So ultimately what—

 

Greg:

Here’s a great stat that sort of backs that up.

 

Mario:

Sure.

 

Greg:

Cause you know, one of the things you can do, right, is you could, another voluntary benefit would be disability. Is that true?

 

Mario:

Sure.

 

Greg:

Yeah. I just read this this morning. It makes no sense, by the way, I’m reading this stat. Like people don’t even think about like what it’s saying. I think I can interpret what they’re trying to say.

 

Mario:

Right.

 

Greg:

So, but I was reading about this, it says, “most Americans are better prepared financially to die than to become disabled.” Here’s what these people write and no one questions. “…Although the chances are at least three to five times greater of a disability occurring2.” Now I’m going to tell you you’re way more likely to die than become disabled. Like, that’s just a given, right?

 

Mario:

Sure.

 

Greg:

I think what they’re saying is if you buy a term insurance, like more people buy life insurance and don’t use it.

 

Mario:

Right.

 

Greg:

Then like a voluntary benefit like disability. Right? So there’s an example.

 

Mario:

Absolutely. So ultimately, the foundational idea of a voluntary benefit is to help people maintain the lifestyle they were used to before they got sick or hurt, right? And if, if somebody goes through an accident or a major health event, these programs are going to put cash in hand to these policy holders to help them maintain the lifestyle they were used to. And whatever they do with this money is up to them. They can use it for house payments, car payments, putting groceries on the table. Certainly, they can use it for copay and deductible, but that’s not the element that affects them the most, that copay and deductible. It’s the cost of living. Just maintaining that lifestyle.

 

Greg:

Okay, I got more stats, like you’re like, you’re like saying things, I’m trying to learn about this, right? So, I’m not trying to kill everybody with stats, but like, nearly 46% of all foreclosures on conventional mortgages are caused by a disability. Only 2% by a homeowner’s death2.

 

So when you think of, like, right? So, you think about that, something happens , and you have to foreclose. Here’s something else, most income owners, regardless of income level (so the more you make, the more you spend) have spending commitments that consume 65 to 75% of their normal cashflow2. So what that means is like, there’s not much margin for error there. So, if something happens, like you’re saying Mario, then these folks, they need something to protect them during that incident that happens on that 65 to 75% of their income.

 

Mario:

Greg, the reality is, 65% of employees have less than a thousand dollars set aside in savings for a catastrophic event, like a cancer situation, a heart attack, a major accident3. So why does voluntary make the most sense today? You know, during a pandemic, post-pandemic, whatever happens, these programs can have a significant impact, in a positive way, to help people maintain that lifestyle they were used to before that took place.

 

Greg:

And then think about what that means to the culture, the structure and the fabric of the company, right? So, you have, you have these offerings that you, that you can, that you can give to people, it allows them to protect themselves. And the employer, you know, has an employee that doesn’t have this financial crisis that affects every aspect of their life, including their work-life balance, et cetera. So you know what, let’s pause there, spoiler alert. We’ll like — I think that’s called a hook or whatever it is. I don’t even know. Let’s keep talking about that, but let’s go to 401k. Let’s go to retirement. Cause that, cause the change, even though, you know, I started the business in 1986 and 401ks weren’t that big back then and the change in the trend and 401ks and the shift of responsibility, almost like voluntary benefits, right. It’s like, you know, it used to be the company paid for everything and you know, everything was paid for. Now, it’s like, there’s personal responsibility. We’ve got to own that. We also have to own it in 401ks. So, Brian, could you just give a background of 401ks, what’s going on, and the importance of them today and some of the things you’re seeing?

 

Brian:

Yeah, certainly. So, you know, as you alluded to Greg, you know, we’re coming from an environment where, you know, my, my father worked for thirty-some years at Bell Telephone Company, right?

 

Greg:

My dad worked for the gas company! So yeah, it’s like same type of thing.

 

Brian:

So all he had to do is show up for work every day and put in his time. And at the end of the 30, 35 year run, he walked away with an annual pension. So, Bell Telephone Company would pay him X dollars per month just because of his years of service. Well, those pension plans just became exorbitantly expensive for corporations to continue to maintain. It was just a financial burden. So we shifted from this pension plan/defined benefit plan world to a defined contribution world where it really is incumbent upon the employee (or I’ll refer to it also as the “plan participant”) to save, it’s on us to save for our retirement, with hopefully a little bit of employer contribution to help boost our retirement savings. But the onus is now on the employee. And unfortunately, what the numbers are showing us, and the statistics are bearing this out, is employees are woefully under prepared.

 

They’re not saving enough. I think they’re overwhelmed by the decisions that they now have to make. And I think that that’s the impact that we can make here, both on the voluntary benefits side, because I think there’s an element of folks just don’t understand these benefits that are being offered, much in the same way with 401ks. I think employees just don’t understand. What am I supposed to do? I have a myriad of investment choices that I now have to choose from, how much am I supposed to save on paycheck to paycheck? And now you’re asking me to, to try to wring the washcloth a little bit more and save more into the 401k. So those are the types of struggles and challenges that employees have. And really, that’s why I think we are layering on top of our delivery, more of holistic approach, right?

 

It’s, it’s easy just to show up at a workplace and say, yup, everyone should save more. Well, you know what, what if you can’t save more? So let’s take a more holistic approach and let’s figure out what are those barriers that are preventing that employee from saving into the plan or saving more into the plan. And if we can start to knock down some of those barriers and we can kind of clear a path for, you know, what I’ll call it a more prepared financial wellness. And, and those are the types of things that, you know, I’m passionate about, that we care about here inside of the building. And those are the changes that I think that we can help to implement going forward.

 

Greg:

Because when someone gets to the age to where they want, they want freedom, they don’t want to work anymore. And so they get to whatever that age, 60, 65, 70. So what, what’s really important for us to work with the employer and employee on is when you get to that age, it is in everybody’s best interest that we help you prepare to be ready for that date. Because if you’re not ready for that date, first of all, you don’t want to be there. And if you don’t want to be there, you’re probably not putting your best foot forward. It becomes really expensive for employers, and it becomes, the employees are unhappy, so we need to help. And by the way, not everybody can save more, but there are a chunk of people that can, so like, if we can get people just 2%, if we can get them to just save 2% more, just 2% more, the difference that means in their life is meaningful. It really is. And it doesn’t even reduce our income 2%. Right? I mean, like they gotta understand that.

 

Brian:

Yeah, absolutely. I mean, you know, the whole variable here is when you’re saving into a qualified retirement plan is, these are pretax dollars that are going into the account. So putting in a dollar into the plan actually, you know, has, has tax benefits to you because it’s not a full dollar coming out of your taxable income. So, you know, it’s this challenge though, of trying to teach employees that, you know, whatever your line of work may be, you know, unfortunately this, this 401k plan is, is kind of forcing people into becoming kind of quasi-401k financial specialists. And this isn’t what most employees signed up for. So that’s really our role. And that’s what I see.

 

You know, my role as the director here of our consulting is, is really putting forward the messaging that meets people where they are, right? So, I’m in my fifties, right? So I care about different things at my stage of life than a 26 year old. But the customary approach that’s been put together in our industry is, you pull a presentation off the shelf, show up at the workplace and everyone hears the same message. That doesn’t work, right? So what I care about is a heck of a lot different than somebody just starting out their career, and we need to make sure that we’re delivering customized, tailored messaging, meeting people where they are in life. And I think that that will hopefully move the needle and get people to understand the importance of saving, the importance of saving more and starting just to make more prudent financial decisions.

 

You know, we talked a little bit earlier about, you know, the importance of voluntary benefits and, and trying to, you know, take some of that financial stress off of the table. I see a ton of 401k loan applications come through because of people having medical issues that come up, they can’t pay their bills. So they take 401k loans, which diminishes their pot of money. And it just creates this cycle of, instead of using the 401k plan as a savings account, unfortunately it becomes more of a bank account where they try to put a dollar in and take 50 cents out. And that’s just not going to lead to very strong retirement outcomes.

 

Greg:

So, if I’m in a 401k and I’m, if I’m an employee, I’m an employee, you know, here’s seven things I just scribbled down as you were speaking. One, most people don’t even know there’s a Roth 401k option. And if your 401k doesn’t have a Roth for you, we got to talk about that.

 

Two. Target date funds. They’re not all the same. Some people are, they’re very different. Not based on the date, there’s some to and through. We should talk about that.

 

Communication. Communication inside of companies is not good around their benefits. I actually think we can do better at that at Confluence. Match. The employers are making matches, I don’t think they get the credit that they deserve for in the total compensation, the match that’s in there.

 

Participation. Participation is low. In fact, I have a stat, it’s 38% of people that are in that have a 401k — 31%, I’m sorry — that have a 401k available to them don’t even participate1. That’s tragic.

 

Asset allocation. You know, it’s just the asset allocation that people are doing. We see it all the time with our existing clients. We try to help them, but the asset allocation — not good. They don’t understand that, you know, this is the last money they’re going to be using for income. We can talk about that.

 

And then people timing! Oh, the market’s too high. They go to the cash, the markets, do you know what I mean? Or they, or they pick, they pick the fund that did the best last year. I’d pick the fund that did the worst, as long as it’s not a bond fund.

 

So, like, it’s just, it’s just — so a lot going on there. Right? Okay, Mario, if I’m an employer and I’m an employee, there’s a lot of voluntary benefits. I’m learning that like you could, you could insure yourself away from everything.

 

Mario:

Sure.

 

Greg:

From identity theft to cancer, to mental illness, whatever. If you would tell a few, for the listeners, if you would say the one or two voluntary benefits that are like the must haves, you know, like if you’re in business, first thing you do, blue suit. Blue suit, gray suit, second. What are our blue suit and gray suit of voluntary benefits?

 

Mario:

It’s a great question. But before I answer that, Greg, Brian said something. When I had the chance to meet him a few months ago, I knew quickly how we were going to work together, because our, I think our there’s a lot of synergies on his just philosophy and approach. We had a lot of like-minded ideas and I think the comp— how we complement each other is to understand that this corporate services team is aligned to have a positive impact at the work site.

 

Greg:

Yeah. And by the way, the other thing, the other component of that we are, we talked about a lot, that may not be obvious to the listener, is that you know, there’s — so this is unusual in that the typical 401k or voluntary benefit, it’s not coordinated. You have someone in there that it’s different. It’s very siloed. It should be more coordinated. And the typical 401k, I can tell you, I’ve seen this firsthand, the typical person has one or two, they’re one-shot wonders. If they have one or two 401ks, it’s because they know the owner. So, they, so that they get the 401k, they have no team, they have no corporate services. They have no real expertise. It’s just like, oh, the owner’s buddy. Yeah. Well, you’re just because you’re the owner’s buddy doesn’t mean that you should have the life, the financial lives of all the employees in there, if you don’t have really people that have the experience you guys do.

 

So, the other team, part of this team, that’s important for people to understand. We have a group of financial advisors that this is what they do. They work with individuals and they’re, they’re really good at it. We are, we have done a great job working with individuals. And so, we, our financial advisors, can come in and work with the individual. That’s I think different. So these guys work with our financial advisors and bring in the whole team. So it is a service, it’s a department, it’s not just a thing. Okay!

 

Mario:

Sure.

 

Greg:

Blue suit, gray suit?

 

Mario:

Blue suit, the most participated programs are going to be the accident and disability programs. Why? People can relate to accidents every day. I was at my kid’s baseball game yesterday, coaching them. Kid got hit in the mouth with the ball. Quickly ran off the field. Luckily there was a dentist watching the game. So long story short, the kid was fine, but people can understand that quickly. And when you have a program that covers accidents every single day, on or off the job, and whether Johnny’s playing a baseball or Suzie at gymnastics, it’s going to cover you.

 

Greg:

So here’s the number — 35. If you’re 35 years old, you have a 50% chance of becoming disabled for a 90 day period or longer before you’re 65.2

 

Mario:

Correct.

 

Greg:

So you got a 50% chance2. So if you, if you’re running without disability, right, you don’t have a net, like there’s no net, you gotta have a net.

 

Mario:

Weekend warrior mentality. People just think they’re, depending on what age you are, that that’s a great age that you just shared, it’s the weekend warrior. They want to be— they’re either working in the yard or they’re running a Tough Mudder, something that they’re doing, they’re more vulnerable.

 

But then, the second tier, the gray suit is going to be your critical care type programs. That covers cancers or heart attacks or strokes or things that are unforeseen like that. Those are the two, the blue suit’s definitely the accident, short-term disability approach. And then the second one is going to be mostly the, the critical care.

 

Greg:

That’s great. So, you know, for the listeners, I, you know, you may already have these at your, at your place of employment, if not, you should probably ask for them. Cause it makes total sense to me when you look at the statistics on accident. And then we’ve all been affected by someone that we care about having a major medical issue, like a cancer or a stroke or something like that. And that is, that is difficult enough. But then when you add the financial stress on top of the medical stress, that’s, that’s just a dangerous cocktail for a family. So, having that and being protected from that, hopefully provides peace of mind for folks.

 

Mario:

It does. And you know, I’ve shared this with the team internally. And I think one of the obligations that we have at Corporate Services is to make sure health distress doesn’t lead to wealth distress.

 

Greg:

Yeah. Yeah. So here, I’m trying to think of as listener, I’m thinking, okay. I hope, I hope people are really like, like, like listening and bringing this into their heart. Because, you know, we spend so much time planning where we want a second home, we spend time planning on where we want to go on vacation. Right? Where are we going for dinner? And I — and some people would say our industry’s a little boring. I hope it’s not. Like, this is how we maximize lives and maximize legacy. This is how we do it.

 

And by the way, could you hear that? Wait, it’s okay. This is sort of interesting. That white noise? Can you hear the white noise in our firm? Or in the office? This is, I think hopefully helpful to anyone that’s been in our building.

 

So, in our, in this building, we have white noise. And the white noise is because, you know, our clients, rightfully so, demand privacy. And so, we want to have privacy from office to office. So in the entire building, we have white noise. So you can’t hear from one room to another. To protect people’s privacy. So that’s like — Mike just, just looked at me like, what the heck was that? He’s the producer of this, and he was like, what the heck was that? So that’s the white noise. Yep. So. I don’t know. So I guess that makes it a little more tolerable. Yeah. So, so if, if you’re not interested in voluntary benefits, 401ks, just come over to listen to our white noise. It’s sort of cool. All right. So Brian, I gave you a laundry list of things. Which ones do you think are important to talk about?

 

Brian:

Well, I got so engrossed listening to you and Mario speak. I kind of forgot what my laundry list was. I remember target date funds and asset allocation. So maybe we start there, right? So, target date funds. This is a kind of a means of investing that has really, really taken shape over, I would say, oh, call it the last 8 to 10 years. And, and the concept is, and it makes just perfect sense. So, the target date fund blends, you know, stocks, bonds, cash, and it blends all of these, these investing components together into a basket. And that basket is really invested based upon how many years you have until you retire. So if someone invested in, let’s say the 2025 fund that is going to be invested a lot more conservatively than somebody who’s investing in the 2065 fund, because we have a lot longer time to invest, to reap returns, to, you know, navigate the waters over a 30-year span versus a five-year timeframe.

 

So the idea of the target date fund is one in which I think we see the statistics of target dates are attracting. Usually it’s about 70 cents of every dollar that’s going into a 401k plan, goes into a target date fund. And these come in different varieties too. So we have some target date funds that have an end date at age 65, which is the presumed date that, that most employees would, would plan on retiring. We also have some target dates that are set up with a “through” philosophy, which they are, the fund managers are managing that money typically to what they would predict to be that, that individual’s death, which would be, you know, somewhere around the age, 80, 85 using actuarial tables.

 

Greg:

So with that, so let’s, let’s just think about that as a listener. So, someone just goes in, and they pick a target date fund — 2030, I’m gonna pick a target date fund. I think I’m gonna retire in 2030. And “to” and “through” are, it could be, as different in asset allocation as black and white. And by the way, it could cost someone like a really lot of money if they’re doing “to’s.” And by the way, I’m not being, I just know I’m not being critical — yes, I am — but I don’t mean to be mean about it. But a lot of people that are even now talking about, they don’t know the difference between “to” and “through.” So, they’re like putting these “to” funds in instead of “through,” and it’s just like, just that alone, we can come in and we can say you got “to” or “through,” we can change it. We could, we could, we could really help your outcome in a meaningful way. Is that fair?

 

Brian:

Very fair. I would venture to guess if you asked an employer or the retirement plan committee at an employer — “to” or “through” fund? 99 and a half percent would say, not sure.

 

Greg:

Or the owner’s buddy that brought it in.

 

Brian:

Absolutely. Yep. Yep.

 

Greg:

I mean they just don’t.

 

Brian:

They just don’t know. They don’t know. Right. You don’t know what you don’t know.

 

Greg:

And by the way, the “to,” I mean, you’re not gonna, you’re retiring. Everybody. Like sometimes the dates of retiring and death, you know, they’re the same and there it’s like a different thing. And by the way, your 401k is the last money you use in planning. So, it’s not like you get to 65 — and most people don’t start automatically taking — at least our clients don’t automatically start taking money out of their 401k. They don’t touch that until they’re 72. They use other assets for the first cash flow because of tax savings. So, like, it’s longer term money, but they’re still doing the “to,” which is just bizarre to me.

 

Brian:

Very true. Yeah. It’s interesting. In fact, we came across a case recently where there were some individual participants that were in their early thirties, and they were investing in a 2015 fund.

 

Greg:

Ouch.

 

Brian:

So even though the, you try to put bumpers into place to keep the, you know, the bowling ball in between the lanes with these target date funds, there are still individuals that are clearly lacking the education, lacking the guidance from a financial advisor or, you know, somebody who should be in a position of giving some, some advice or guidance. And even there, the participant is unfortunately thinking they’re doing the right thing and they are not. So there’s, there’s just a ton of education that needs to be done. And, you know, I think we’re, we’re well-equipped to provide that.

 

Greg:

So it’s a lot of great input guys. Thank you. And it’s I find this really motivating. I, I do. I I’d like to help. I’d like to think that we can help tens of thousands of employees become retirement ready and, and protect themselves from unforeseen events. And this is a mission that we’re on at Confluence. It’s an awful lot of fun. And I got to tell you one of the things that we’ve got to do to make sure this works for employers and employees, because when you look — and I feel like I’m the statistics nut today, but whatever — the top reasons cited for increasing benefits are to retain employees. So to keep employees, 72% and to attract new ones, 58.4

 

Go to restaurant, can’t find employees. Go to anywhere, you can’t find employees. And a great company is all about employees. Like, you’re as good as your people. Like we want to attract and retain top talent. And if we can do that, we’re going to be great for, we’re going to be great for our clients. But you know, you have to have great benefits.

 

Now, I’ll just, I’ll let everybody have a little peek under the tent. So my partner, Jim Wilding, and I think everybody listening knows Jim and I are partners. And you know, we, this was about two years ago, you know, we try to have a great culture of fun and work hard and, you know, we have, it’s just fun and we’re really trying to do something special. And we thought, you know, we would take people to Top Golf, and we do, you know, we do, we do whatever. We do things and we get together, and we do, you know, what, during— whatever. We try to make it we try to make it a family atmosphere.

 

And Jim, to his credit, said like, do you know, we should look at our benefits. Because our benefits were good, not great. And so we, we actually took a step back and said, you know, we can take people to Top Golf all we want, if we’re not protecting and providing for their family through benefits, we’re not getting it done. And it’s just, it’s steak, no sizzle. It’s big hat with no cattle. Figure out how you’re going to say it. So, we went and we totally revamped and rethought about, and, and spent a lot of money on our benefits. And the reason I tell you this, we spent a lot of money, we match everybody, everybody gets 3%. We pay for some of the employees, pay for some of their family. It was a big spend.

 

And, and here’s the thing. And here’s what we, here’s where we got to work together. I don’t think we’ve done a good job, making sure our associates understand the benefit. That’s just honest. Until you guys came in and we really uncovered this itch that companies and employees have. So this is just being honest and seeing a vulnerability and seeing a blind spot for Greg and Jim. And so we actually are now, the three of us, one of the that’s another thing we talked about recently is, how do we make sure our benefit is actually a benefit? And so, you want to talk about how we can come in and we can work with employers? Because employers spend a lot of money and employees don’t appreciate maybe because they don’t know. And if an employer and employee, I mean, if you have 31% of people have a 401k not participating1, right? It’s got to stop; it’s got to stop.

 

Mario:

Greg, you said it best. And I think something the pandemic has taught all of us is to have a true vested interest in the people that either work for us, work with us, and are dependent on the decisions that we make. And I think the game changer or one of the biggest value props that we bring to the table is the ability to educate and inform, engage at the work site. And when you sit down with somebody and you peel away the layers of their needs, their lifestyle, their budget, and you can be very strategic on the benefits that make the most sense to those three categories and help them understand how that works. Not only are you protecting the 401k, not only are you protecting that needs, lifestyle and budget of that employee, the employer themselves are going to sit back and say, you know what? I’ve created an environment, not only do I pay them well, or I provide great vacation and sick days, but my employees are happy because they have great benefits and the likelihood of them going down to ABC company and looking somewhere else is going to minimize tremendously. And here at Corporate Services, I truly feel we’re equipped with the resources, the talent, the logistics, the partnerships in the marketplace to come in and have that conversation.

 

Greg:

So in the movie, in the movie Top Gun, they said, “Maverick, you have to engage, Maverick, you have to engage.” And I guess, I guess the message to everybody listening is — we’ve engaged. So we’ve, we’ve engaged. So we have always been engaged with individuals. We’ve done an okay job with Corporate Services and corporations and, and we’ve always offered to individuals, please come in and we’ll give you a second opinion. I guess today is our way of saying we’ve engaged, we’ve engaged in improving outcomes for individuals. We’re going to help them be able to retire without worry. And we’re going to help them to be able to live without worry of an event that’s going to help or hurt them financially. You know, a medical event or disability or whatever. So I guess it’s our way of saying, we’ve always said to people, if you’re looking for a second opinion and you would like us to give you a second opinion individually, we stand ready to help. We are now saying to employers and employees, if you would like a second opinion, we stand ready to help and would be happy to bring our team and Corporate Services in to create a new standard for benefits and for 401ks.

Thanks for listening. If you’d like to hear other subject matters that may be of interest to you, please check us out at ConfluenceFP.com/podcasts.

SOURCES:

(1) Bureau of Labor Statistics as cited by Financial Samurai.

(2) https://www.affordableinsuranceprotection.com/disability_facts

(3) 2016, Bankrate.com as cited by Forbes.

(4) SHRM Employee Benefits Report, 2018

 

 

 

Opinions expressed in the attached article are those of the author and are not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice.

401(k) plans are long-term retirement savings vehicles. Withdrawal of pre-tax contributions and/or earnings will be subject to ordinary income tax and, if taken prior to age 59 1/2, may be subject to a 10% federal tax penalty. Roth 401(k) plans are long-term retirement savings vehicles. Contributions to a Roth 401(k) are never tax deductible, but if certain conditions are met, distributions will be completely income tax free. Unlike Roth IRAs, Roth 401(k) participants are subject to required minimum distributions at age 72 (70 ½ if you reach 70 ½ before January 1, 2020). Matching contributions from your employer may be subject to a vesting schedule. Please consult with your financial advisor for more information.

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