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General Session: Creative Communication Tips for a Commoditized World Tuesday, April 30, 2013

Chris Stroud, MSPA, MAAA, EA, Principal

Simoneaux & Stroud Consulting Services (SCS)

Communication Challenge

“The single biggest problem in

communication

is the illusion that it has taken place.”

- George Bernard Shaw,

author

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Goals of Today‟s Session

To increase awareness of good and bad communication styles

To understand the difference between positive and negative language

To provide techniques to improve written communications

To offer communication tips and techniques to help you handle common situations more effectively

We‟re All Marketers Now! Touchpoints: The Customer “Journey”

“Customer experience is the sum total of all contact points,

interactions, transactions, and encounters between a customer

and a company, its brands, and its various product and service

offerings over a determined period of time.” (Flip the Funnel)

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Why Customers Get Upset

Someone was rude

Someone was

indifferent

No one listened

No one cared

Expectations were not met

Did You Know…?

When customers receive good service:

• They tell an average of 4-5 people.

When customers receive bad service:

• They tell an average of 9-12 people.

Top two reasons given for why companies lose customers:

• Attitude or indifference on the part of the service provider (68%)

• Dissatisfied with product (14%)

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Habits

"We are what we repeatedly do.

Excellence is not an act...it's a habit.“

(Aristotle)

Three Dimensions of Communication

Words(7%)

Tone(38%)

Bodylanguage(55%)

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Communication Skills for Today‟s Discussion

Active listening

Using positive language

Mastering the written word

Asking the right questions

Handling difficult situations

Skill: Active Listening

• Listen to the client‟s opening statement.

• Jot down (or input) name and key points.

• Listen without interrupting.

• Give the other person your full attention. (Do not begin crafting your next statement while they are still talking.)

• Repeat phrases and acknowledge. Listen between the lines.

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Skill: Using Positive Language

"Keep your thoughts positive because your thoughts

become your words.

Keep your words positive because your words

become your behavior.

Keep your behavior positive because your behavior

becomes your habits.

Keep your habits positive because your habits

become your values.

Keep your values positive because your values

become your destiny."

- Mahatma Gandhi

Positive vs. Negative Language

Positive language:

• Focuses on what can be done;

• Suggests alternatives;

• Sounds helpful and encouraging rather than bureaucratic;

• Stresses positive actions and positive consequences.

Negative language:

• Focuses on what can’t be done;

• Can have a subtle tone of blame;

• Can sound like a command;

• Demonstrates an unwillingness to help and offers no options;

• Is memorable.

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Think Positive!

Negative Positive

Keep off the grass! Please walk on the pathways.

Don‟t yell! Please use your inside voice.

Don‟t pull the cat‟s tail! Please pet the cat nicely…like this.

Don‟t touch! Please look with your eyes and keep

your hands in your pockets.

Don‟t forget to send in your… Please remember to send in your…

Sometimes negatives are OK for impact:

“Don’t Drive Drunk!” is better than “Drive Sober”

Changing Negative Messages into Positive Ones

We regret to inform you that we cannot complete your new

plan documents, since you have neglected to provide

sufficient information. Please complete ALL sections of the

attached form and return it to us as soon as possible.

Congratulations on your new business.

To complete your new plan documents, we need some additional

information from you. Please return the attached form, with the

highlighted areas filled in, and we will be able to complete your

plan documents within one week of receipt.

We wish you success in your new endeavor.

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Positive Words

Be sure your messages include positive words like these,

used sincerely:

value benefit enjoy pleasure pleased

inspire enhance please thank you agree

appreciate profit feel free saving honor

help you assist you are welcome admire

like glad delighted generous happy

Using Positive or Neutral Statements

WORDS TO AVOID: (“trigger words”)

• No…

• I’ll try…

• That’s not our policy…

• That’s not my job…

• You can’t…

• I have no idea…

• You have to…

• You need to…

• You must…

WORDS TO SAY: (positive or neutral statements)

• Here are some options…

• I will…

• Here’s what I can do…

• Let’s see what we can do…

• I’m confident that we can…

• I’ll find out…

• The best thing for you to do is…

• What works well is to...

• …< > will be required.

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The “NO” Sandwich (“Needs Options”)

“What I will do is…”

“What you can do is…”

Other Ways to Say “NO”

• Can you tell me more about the time commitment? I just don‟t think I have the time right now.

Time

• I‟d love to be asked at another time. Can I have a rain check on that? Rain check

• Have you thought about asking Susie – I think she‟d be great at this task. Alternative

• I know how important this is to you, but I‟m not in a position to say yes (right now). Concern

• I only have 5 minutes right now. Is that enough time or should we reschedule? Limitation

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Avoid Negative Phrases and Connotations

• “I‟m afraid that I can‟t attend that meeting.”

• “To be honest, I‟m not sure what time the

meeting starts.”

• “He is always late to meetings.”

• “I‟m only her assistant, so I don‟t have that

information.”

• “If it‟s not too much trouble, I wonder if you

could help me with this report.”

• “I don‟t tell stories very well, but...”

The Problem with “Not a Problem”

Appropriate positive responses to “Thank you.”

• You are (very) welcome.

• My pleasure.

• Glad to help.

• We are always happy to assist you.

• Certainly!

• Thank you for…

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Just Say “Yes”

SURE YES

Avoid “Yes, but…”

• Avoid “Yes, but…” Instead, use “and” or a full stop.

• Negative: I like the sound of your letter, but there are a

number of spelling mistakes.

• Positive:

I like the sound of your letter, and if you run spell

check, it should correct the few errors that I noted.

or

I like the sound of your letter. If you run spell check,

it should correct the few errors that I noted.

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Praise is Best when Specific and Timely

• “Thank you for…”

• “What makes you great to work with is…”

• “It’s clear you put a lot of time and thought into this

___ because…”

• “When you did ___ , it made my job easier

because…”

• “I appreciate how you consistently go out of your way

to…”

• “Sam, did you hear about the great job Sarah did…”

Remember: Giving praise doesn’t cost a single dollar!

The Gift of Constructive Feedback

Criticism is a valuable gift. But, to be viewed as such, it must be properly wrapped and sensitively presented.

It is kinder to be gently direct than to be cruelly silent.

Remember: Criticism done the right way is helpful.

Adverse judgments are hurtful.

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Constructive Feedback: Past (Negative) vs. Future (Positive)

“You really didn’t prepare enough for that meeting. You were not able to answer the client’s questions, and you didn’t even know where to look in the file to find the answers.”

“The next time we have a client meeting, you will

be able to handle the questions better if you do

some extra preparation ahead of time. It will help

to familiarize yourself with everything in the file

and anticipate the types of questions the client

might ask.”

SIx Steps to Making Positive Language a Habit

1) Review everything you write.

2) Think before you speak.

3) Monitor your own speech.

4) Monitor the words of others.

5) Surround yourself by positive people.

6) Don‟t try to eliminate negative words from

your vocabulary completely.

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The Client‟s Perspective

A Positive Work Environment

Foster open, honest communication. (Ask the right questions

and provide the right information.)

“Own” any problem that comes to you.

Accept follow-ups gracefully and keep other parties informed.

Respect others‟ workloads.

Be responsive to requests.

Never “assume.”

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Skill: Mastering the Written Word

“If I had more time,

I would have written you a shorter letter.”

- Mark Twain,

author

Actual Customer Email

To date we have not received any signed documents

back for Mr. Smith’s plan.

ABC Trust has informed us they will be closing

Mr. Smith’s account at the end of the month if we

don't get their Custodial Agreement signed and to

them before that time.

Please send all the documents back to us as

soon as possible. Thank you for your prompt

attention in this manner.

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Actual Customer Email

I hope all is well with you these days and that business

is flourishing.

Please let me know if the assets in your 401(k) plan were

below the $250,000.00 threshold as of December 31,

2010. This information is extremely important, because if

you were a ‘one participant plan’ and the balance was

below $250,000, the plan will be exempt from filing the

2010 return.

If you have any questions at all, please feel free to

call me any time.

Written Communication Techniques

Checklists and bullets

What’s ahead?

Inverted pyramid

Reasons, not rules

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Technique: What‟s Ahead?

Re: Annual Valuation Report for ABC Corporation 401(k) Profit Sharing Plan and

Trust for Plan Year Ended December 31, 2010

We are happy to present to you the Annual Valuation Report for the ABC Corporation

401(k) Profit Sharing Plan for the plan year ended December 31, 2010.

In this transmittal, you will find the following:

• A CD ROM containing your Annual Valuation Report

• Hard copy documents, including the Form 5500 Series, Summary Annual

Report and Participant Statements

• A summary of each item, with applicable deadlines and document

distribution requirements

• Administrative notes containing important information about your plan

To ensure the best possible service for your plan, please review the following summary

and enclosed materials immediately upon receipt and advise us if you believe that there is

any error or omission. The Plan Administrator (usually the Employer) is ultimately

responsible for the accuracy of the annual valuation report and the annual return.

Technique: Inverted Pyramid

Enclosed are the following items for the ABC Corporation 401(k) Profit Sharing Plan and

Trust for the plan year ending 12/31/2010:

• Annual Valuation Report in electronic format on the enclosed CD;

• Annual Return (Form 5500) for your signature and filing with the government;

• Summary Annual Report (SAR); and

• Participant Certificates.

The important deadlines to note are as follows:

Annual return – mail before 7/31/2011

Summary Annual Report (SAR) and Participant Statements – distribute prior to

10/15/2011

To ensure the best possible service for your plan, please review this information

immediately upon receipt and advise us if you believe that there is any error or

omission. The Plan Administrator (usually the Employer) is ultimately responsible for the

accuracy of the annual valuation report and the annual return.

<page 2>

THE VALUATION REPORT …

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Technique: Reasons, Not Rules (WIIFM)

THE VALUATION REPORT AND ANNUAL RETURN

THE VALUATION REPORT

Enclosed is the Annual Valuation Report for the ABC Corporation 401(k) Profit Sharing Plan

for the plan year ended December 31, 2010, together with the annual return (Form 5500) to

be filed with EBSA, an agency of the federal government. To ensure the best possible

service for your plan, please review this report immediately upon receipt and advise

us if you believe that there is any error or omission. The Plan Administrator (usually the

Employer) is ultimately responsible for the accuracy of the annual valuation report and the

annual return.

ANNUAL RETURN (FORM 5500 SERIES)

We have prepared the enclosed annual return/report (Form 5500 series) for signature and

filing by the Employer/Plan Sponsor with the federal government. Please advise us of any

changes so that we may prepare a revised original for your filing. The annual return should

be signed electronically by an authorized official of the Employer. In order to avoid

expensive penalties, please e-sign the return on or before the deadline of 7/31/2011.

Information Requests

HOW • How would they like you to communicate with them?

WHAT • Be clear in defining exactly what you need from the client.

WHY • Tell them why you need it.

WHEN • Tell them when you need it and what the next steps are.

WIIFM • Give them the “WIIFM.” (What‟s in it for me?)

+ • If appropriate, add a personalized comment.

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Email: A Love-Hate Relationship?

Words(7%)

Tone(38%)

Bodylanguage(55%)

Email Etiquette “Rules” of Thumb (or forefinger clicks)

Rule #1: Never put

anything in an email that

you wouldn’t want to

appear on the front page

of the New York Times!

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Top 10 Email “Don‟ts”

DON’T:

1. Make email comments that you wouldn‟t say directly to the person.

2. Perpetuate negative or unproductive emails.

3. Type anything in ALL CAPS. (It‟s like YELLING!)

4. Criticize someone in an email to another person.

5. Don‟t reprimand by email.

6. Send email when you are emotional or use negative language in an

email.

7. Send inappropriate jokes or graphics.

8. “Reply to All” when unnecessary. (Prevent email “clutter.”)

9. Send large attachments unless necessary, especially to a large list of

people.

10. Try to be too funny, especially to a mixed audience or people you

don‟t know well.

Top 10 Email “Do‟s”

1. Re-read before you send – check grammar and tone!

2. Make sure your emails contain meaningful content.

3. Use a subject line as a headline and keep it relevant. (Change when thread

changes direction.)

4. Put questions or actions at top – not bottom. (BLUF – Bottom Line Up Front)

Ask and answer questions in line (number them) – not in a blob.

5. Use Bold sparingly for important information or to single out a person for an

action, if email is addressed to multiple people.

6. Use standard file extension names. Send a separate email alerting if you are

sending a big file.

7. Remove unnecessary attachments when forwarding.

8. Use standard signature with contact info.

9. Use “Out of Office” message when you are away.

10.Use email to make people smile. Send at least one “Thank you for…” or

“Great job on the …” each day.

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“Rules of 2”

Face-

2-

Face

2 Emails

2 Calls

2 Minute Rule

Video Break

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Skill: Asking the Right Questions

Six Servants

(Rudyard Kipling)

I have six faithful serving men

They taught me all I knew

Their names are What and Where and When

And Why and How and Who.

Open and Closed Questions

• Who, What, Where, When, Why & How…?

• 5 Why‟s

• Use to:

• Give control to respondent

• Allow respondent to think and reflect

• Obtain opinions and feelings

• Drill down deeper

Open

questions

• Do, Would, Are, Will, Can, May…?

• Require short answers or Yes/No

• Use to:

• Get quick facts and easy answers

• Keep control of the conversation

• Test understanding and/or agreement

• Get the conversation started

Closed

questions

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Open and Closed Questions: Examples

• What did you do over the holidays?

• Where do we stand on our year-end report deadlines?

• What are the pros and cons of the situation?

• Why aren‟t people using the new software? (5 Why‟s)

• BAD: Why did you…? How could you have…?

Open

questions

• Did you have a nice vacation?

• Are you on track to meet your deadlines?

• Are we all in agreement now?

• Who from your group isn‟t using the new software?

• Are you happy with your current TPA?

Closed

questions

Funneling

• Series of closed questions followed by an open question. (Often 3 to 1 ratio)

• Use to:

• Increase interest or confidence in other person

• Get more information on a specific topic

Funneling

• "Did you meet with the client?"

• "Yes."

• “Did you have any trouble finding the office?”

• “No, I even got there ten minutes early."

• ”Who sat in on the meeting?”

• “John, Bob, and Sally – the new CFO.”

• "Did they have any questions after you finished the presentation?"

• "Actually, Bob did. He wanted to know if we'd be able to meet a March deadline for completing the conversion. I said „yes‟ and that closed the deal!"

Sample Funneling

Conversation

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Probing Techniques

• “You said you were not able to enter the distribution. Can you tell me exactly what happened when you tried?”

• “Can you describe what happened next?”

Clarify or Expand

• “Is there anything else I should know?”

• “You said you tried it twice. How did the second time compare to the first?”

• “Tell me more about…” (increasing detail)

• “You said they were upset about our service. What specifically did they say?” (focus)

• “Sorry, I’m not sure I’m following you. Could you help me by giving an example?”

Accuracy and Detail

• “This process is a total waste of time.” “Please define waste of time for me.”

Define

Delivering Bad News

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Skill: Handling Difficult Situations When Things Go Wrong…

Don’t procrastinate – bad news early may not be as bad.

Face reality and take responsibility.

Use apologies sparingly when something is outside of your control.

Don’t place blame.

Make sure you ultimately uncover the real reason for what went wrong.

Good Ways to Deliver Bad News

Carefully craft your first few sentences – then listen!

Choose neutral words (no “trigger” words) and a calm tone to deliver the message. Then focus on what CAN be done.

Legitimize emotions – use empathy.

Don‟t get emotional yourself – keep listening! (Don‟t take their comments personally; know your warning signs)

Reassure - give them the WIIFM.

Summarize. (Follow up in writing.)

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What‟s the Lesson to be Learned?

“The measure of success is not whether you have a tough problem to deal with,

but whether it’s the same problem you had last year.”

- John Foster Dulles

Diffusing a Situation

• The brain can‟t deal with logic until anger and frustration are put aside. Accept

• Stay calm and let the customer vent.

• Give them permission to be angry, upset or frustrated.

Diffuse

• “You have every right to be angry.” (upset, frustrated, concerned, etc.) Say

• Your goal is to make them want to continue to do business with your firm. Remember

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Technique: Buffers

Express appreciation

• “Thank you for being so patient and understanding.”

Make a statement that covers a point that both parties can agree on

• “I agree with you that the electronic signing of the forms can be confusing. Let’s step through it slowly.”

Compliment the client

• “I’m so sorry this happened to you – you are one of our best clients and always send us good information.”

Express understanding of the situation and the client‟s needs

• “I understand that you are leaving town and you need the report by Friday.”

Five Capabilities of Emotional Intelligence (EI or EQ) (Dan Goleman, Ph.D)

• Ability to read/understand own emotions and impact; trust intuition; honest internal view Self Awareness

• Ability to maintain self-control; be flexible, honest, optimistic; thinking before acting; embrace change

Self-Management

• Passion to work and achieve beyond money or status; defer immediate gain for long-term success Motivation

• Ability to empathize and understand social dynamics; good listener; sense what is not obvious Empathy

• Ability to find common ground and build rapport; communicators; team players; help others shine Social Skills

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The World is Your Laboratory! Observe: The Good, The Bad, & The Ugly

Contact Information

Chris Stroud, MSPA, MAAA, EA

Simoneaux & Stroud Consulting Services (SCS) 165 Geranium Court

Marco Island, FL 34145

Chris.Stroud@SCS-Consultants.com

305-479-3023

Sign up on our website for our free

SCS e-xpress e-newsletter

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Solving Cross-Testing Conundrums Tuesday, April 30, 2013

Norman Levinrad, FPSA, CPC

Summit Benefit & Actuarial Services, Inc.

Major Issues to Discuss

• Accrued-to-date testing method

• Restructuring

• Benefits rights and features issues for plans tested

together

• Plan Design to avoid problems

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Accrued-to-Date Testing

• Under this method, the amount that is normalized is

the increase in the participant’s account balance or

benefit during the measurement period in which the

employee benefitted under the plan

• 1.401(a)(4)-8(b)(2)(ii)

• Why use accrued-to-date testing?

• Younger HCE with short service

• Long-service NHCEs with large account balances

Accrued-to-Date Testing

• Average compensation must be used

• If the measurement period includes prior years, testing service

is generally the number of years of service during the

measurement period, as defined in the plan for purposes of

applying the benefit formula. Treas. Reg. §1.401(a)(4)-

3(d)(1)(iv).

• For DC plans, gains on the beginning balance are disregarded.

So for example if your 12/31/12 test is done on this basis, it

would use the 1/1/12 balance plus 2012 allocations.

• Cannot use accrued-to-date testing in the determination of

whether the gateway has been met

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Accrued-to-Date Testing

• So PS plan tested under this method, you would:

• Use the total PS account balance but back off gains for

current year? Use average compensation

• Use the period of service over which the non-elective

account balance was accrued for that participant

• Exclude years that the participant did not benefit under the

PS plan – how do you get this info? Do you track this?

Accrued to Date – Fresh Start

• Assume that the participant has been in the PS plan

since 1990

• You choose a fresh start date of 1/1/95. Why would

you do this? If contributions were higher for some

years than others.

• Bifurcate the account balance

• 12/31/94 balance plus earnings

• Post 12/31/94 balance plus earnings

• Denominator: years of service after 12/31/94

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How this is Abused?

• CB Plan tested with a PS plan

• CB plan was set up in 2007

• PS Plan was set up in 2000

• Dr House was hired in 1980

• For the accrued-to-date test in 2012, the practitioner used Dr. House’s service from 1980

• Clearly this gives Dr. House a very low EBAR for his rate group test since the calc uses 32 years of service

• And it is incorrect, his service from 2000 should be used since this is the period of service over which the benefits were earned.

Accrued to Date Example

• Dr. Enamel graduates from the Navy and buys a

dental practice from Dr. Molar. Enamel is 40 years

old. Dr. Molar retires.

• Dr. Molar sponsored a PS plan in the past and

provided a PS contribution of 10% of pay to

everyone for many years.

• Census:

• Enamel HCE, age 40, Comp $250,000, DOP 1/1/12

• NHCE1, age 40, Comp $30,000, DOP 1/1/02

• NHCE2, age 45, Comp $30,000, DOP 1/1/07

• NHCE3, age 22, Comp $30,000, DOP 1/1/12

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Example cont’d

Goal for 2012 is for Enamel to get a PS cont of $50,000 at the DC

gateway of 5% of pay for staff

• Test on Current Basis:

EBAR

Enamel 19.73%

NHCE1 5.68%

NHCE2 4.00%

NHCE3 21.78%

Ratio of rate group = 33.33%

AB% = 53.15%

Fails as we would expect

Example cont’d

• But…..you realize that 2012 is Enamel’s first year in

the plan and the plan provided large PS conts to staff

in the past

• NHCE1 Svc for calc = 11 years, Av comp = $29,000, PS

balance for calc at 12/31/12 = $66,500

• NHCE2 Svc for calc = 6 years, Av comp = $29,000, PS

balance for calc at 12/31/12 = $26,500

• Genius! You decide to test on an accrued-to-date

basis.

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Example, cont’d

Test on Accrued to Date Basis:

EBAR

Enamel 19.73%

NHCE1 20.93%

NHCE2 10.51%

NHCE3 21.78%

Ratio = 66.67%

AB% = 89.91%

Passes! Who’s da’ man?

What is Restructuring?

• A plan may be treated as consisting of two or more component plans for purposes of determining whether the plan satisfies 401(a)(4).

• If each component plan satisfies all of the requirements of 401(a)(4) and 410(b) as if it were a separate plan, then the plan is treated as satisfying Code Section 401(a)(4).

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How are Component Plans Identified?

• Each component plan consists of all allocations, accruals, and other benefits, rights, and features provided to a selected group of employees

• May select the group of employees used for this purpose in any manner

• Composition of the groups may be changed from plan year to plan year

• Each employee must be included in only one component plan under the same plan for a plan year

How does a Component Plan Satisfy Code Section 401(a)(4)?

• The same rules that apply to a plan in satisfying

401(a)(4) are applied to a component plan.

• Whether a component plan satisfies the uniformity

and other requirements applicable to safe harbor

plans under Treas. Reg. §§ 1.401(a)(4)-2(b) and

-3(b) is determined on a design basis.

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When is Restructuring Not Available?

• The safe harbor in §1.401(a)(4)-2(b)(3) for plans with uniform points allocation formulas is not available in testing (and thus cannot be satisfied by) contributions under a component plan.

• In ADP/ACP testing of 401(k) plans

• To show that a DC plan provides:

• “Broadly available” allocation rates

• A gradual age or service schedule

• A uniform target benefit allocation,

• Satisfies the gateway test.

• [Reg. §1.401(a)(4)-9(c)(3)(ii)]

How does a Component Plan Satisfy 410(b)?

• Generally, the same rules apply in satisfying

410(b) as would be applied to a plan

• A component plan is deemed to satisfy the

average benefit percentage test if the plan of which

it is a part satisfies § 1.410(b)-5 without

disaggregating for collectively bargained

employees

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How does a Component Plan Satisfy 410(b)?

• A component plan that does not satisfy the ratio

percentage test can still pass testing by satisfying:

• Nondiscriminatory classification test (the ratio % exceeds

the SH % which depends on concentration %) and

• The reasonable classification test – facts and

circumstances based on bona fide business criteria.

Why is it preferable to satisfy the Ratio Percentage Test rather than the Average Benefit Test?

• If a plan fails the ratio percentage test, it must pass the

three components of the Average Benefit Test:

• Nondiscriminatory classification test

• Reasonable classification test

• Average benefit percentage test (ABPT)

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Why is it preferable to satisfy the Ratio Percentage Test rather than the Average Benefit Test?

• Main testing advantage in using restructuring is to have

the ability to pick and choose each person for a particular

component plan

• Otherwise, the reasonable classification test must be

used and would be more difficult to satisfy

Why would Restructuring be used as a Testing Technique?

• Can generally provide more favorable testing results in the

following circumstances:

• When an early retirement window is provided

• When greater benefits/contributions are desired for a younger

HCE or when equal benefits/contributions are desired for all

HCEs

• When there are short-service and long-service employees and

one testing method doesn’t work (e.g. annual method vs.

accrued-to-date)

• When multiple safe harbor formulas are used

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Does the plan document need to reflect the fact that restructuring is used?

• No, restructuring is simply a testing choice

• Can be used or not used on an annual basis

Example

• Piker’s Law Firm sponsors a cross-tested profit

sharing plan. The plan provides for three tiers:

• Partners

• Law clerks

• Secretaries

• Rate group testing is failed for HCE 3 and HCE 4

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Name Age Comp Contr % of Pay EBAR

HCE 1 60 220,000 44,000 20% 3.784%

HCE 2 55 220,000 44,000 20% 5.689%

HCE 3 35 220,000 44,000 20% 29.083%

HCE 4 38 220,000 44,000 20% 22.769%

NHCE 1 50 20,000 3,400 17% 7.100%

NHCE 2 26 20,000 1,000 5% 15.151%

Totals 920,000 180,400 19.61%

Example 1

• Separate into component plans: demonstrate that

each component plan passes 401(a)(4)

• Component Plan #1: Consists of HCE 1, HCE 2,

and NHCE 2. This component plan satisfies the

ratio percentage test:

1 NHCE benefiting / 2 NHCEs

2 HCEs benefiting / 4 HCEs

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Example 1

• It also satisfies 401(a)(4)

tested on a benefits basis:

• The gateway test is

passed because each

NHCE receives at least

5% of pay.

Name % of pay EBAR

HCE 1 20% 3.784%

HCE 2 20% 5.689%

NHCE 2 5% 15.151%

Example 1

• Component Plan #2: Consists of HCE 3, HCE 4,

and NHCE 1. This component plan satisfies the

ratio percentage test

• It also satisfies 401(a)(4) tested on a contributions

basis using permitted disparity

• Gateway test is passed because each NHCE

receives at least 5% of pay

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Example 2

• A medical practice has

seven employees-two

physicians and five other

employees. They are

interested in a PS plan.

Ee Age Comp Group

Ph 1 52 200,000 A

Ph 2 48 200,000 B

St 1 45 40,000 C

St 2 30 28,000 B

St 3 35 25,000 B

St 4 30 20,000 A

St 5 20 20,000 A

Example 2

• The physicians wish to maximize their contribution and minimize contributions to the staff.

• Customized contribution formulas are designed in which such contributions accrue at different rates and some NHCEs receive a lower contribution:

• For participants in Group A, 8 percent of Comp

• For participants in Group B, 5 percent of Comp.

• Group C is excluded from participation in the plan.

15

Example 2

• This design satisfies the nondiscrimination requirements by

restructuring the plan into two separate plans with safe

harbor formulas.

• Groups A and B each independently satisfy the minimum

coverage requirements of IRC § 410(b) and thus can be

tested as separate plans.

Benefits, Rights and Features and Aggregated Plans

• If Plans are aggregated for 410(b) or 401(a)(4), they

are tested together for all purposes.

• Remember that plans must have the same plan year

to be aggregated.

• If plans are tested together, they are tested together

for purposes of benefits, rights and features testing.

16

Distribution Issues for Aggregated Plans

• Timing of distributions; right to in-service

distributions; optional forms of benefits provided;

availability of loans must all be provided on a non-

discriminatory basis across the tested plans.

• This means you have to test for current availability

and effective availability

Distribution Issues for Aggregated Plans

• Current availability may be easy to satisfy if

everyone is covered in both plans

• Effective availability is a facts and circumstances

issue. Example from regs: • A plan was amended to provide for a single lump sum distribution to any

employee who terminated employment within six months of the plan

amendment. The availability of the benefit was conditioned on an

employee having a particular disability at the time of termination. The only

individual who met the disability requirement at the time of the amendment

was a highly compensated employee and no other employee became

disabled in the six-month period. This amendment violated the effective

availability test.

17

What Design Avoids Things Going Bad?

• Keep it Simple

• Always ask yourself: “what’s the worst that can happen and

how would this design deal with it?”

• Don’t design for year 1 only.

• Make sure clients understand the mechanics of benefits

testing…that favorable results usually depend on the youngest

participants.

• Use the same Eligibility Requirements and Entry Dates for all

sources of money

• Use total compensation for all purposes

• Use individual allocation groups with 1 hour and no end of year

employment requirement for Profit Sharing allocations

The End

• Questions?

1

Rehired Employees – Are They In or Are They Out Tuesday, April 30, 2013

Robert M. Richter, J.D., LL.M.

Vice President, SunGard Relius

What We’ll Cover

• Counting Service

• Break in Service rules including the “rule of parity”

• Entry requirements for rehires

• Buy-back rights

• Returning from military leave

2

Robert’s Rules of Rehires

• Don’t rehire former employees

• If the person was good enough to rehire, then why go to

all this effort to keep the person out of the plan

• In 95% of the cases, the person will be eligible on the

date of rehire

Eligibility Requirements

3

410(a) Maximum

• Code §410(a) limits maximum age & service condition

plan can impose

• Generally 1 Year of Service

• Age 21

• Plan can’t impose higher service requirement

• Even if plan would pass coverage

Two Years of Service

• The law allows a plan to use a 2-year eligibility condition

• But pay the price

• Full and immediate vesting

• Exception: Can’t use 2-year rule for elective deferrals

• Can be Years of Service without an intervening break in

service (first exception to rule that all service counts)

4

Entry Date

• EE generally enters plan on entry date after satisfying

eligibility requirements

• Maximum entry date is earlier of:

• first day of the first plan year beginning after the date

requirements are met, or

• date that is 6 months after the date requirements are met

• Roughly 182 entry dates – but January 1st and July 1st

meet the maximum

Employment on Entry Date

• Plan can require employment on entry date as condition

to enter

• If EE comes back after entry date, must generally enter

on day of return unless break in service rules let us

disregard service

5

Example

• Biff hired 5/1/11

• Quits 4/1/12 with 1,800 HOS

• 1 YOS 4/30/12

• Entry date 7/1/12

• If rehired before 7/1/12 then enters on 7/1/12

• If rehired after 7/1/12 then enters on date of rehire unless break

in service rules apply

Year of Service

• 12-month Computation Period (CP) in which EE has at

least 1,000 Hours of Service

• No requirement to be employed on a particular day

• Have YOS even if not employed at beginning or end of

CP

• No requirement to work 12 months

• It is a 12 month computation period during which 1,000 hours of

service are completed

6

YOS Example

• Marty starts work 1/1/11

• Has 150 Hours of Service/month

• Quits 8/1/11

• Had 1,050 HOS before quit

• Credit Marty with YOS at end of 12-month Eligibility

Computation Period (2011)

What is an “Hour of Service”?

• An hour for which an EE is paid for performance of duties

• An hour for which an EE is paid for non-performance of

duties (e.g., vacation pay, sick pay)

• An hour for which an EE receives an award for back pay

7

Credit for Nonperformance

• Some reasons for pay for nonperformance of duty:

• vacations

• holidays

• illness or incapacity, including disability

• layoff

• jury duty

• military duty

• leave of absence

• It does not matter whether the employment relationship

has terminated at the time of the payment

Limits on Nonperformance Credit

• Don’t have to credit more than 501 HOS for any given

computation period for paid nonperformance

• No need for credits for payments under a plan to comply

with:

• workers compensation

• unemployment compensation

• disability insurance laws

• These are credited hours and differ from unpaid

maternity and paternity absences (hours credited just to

avoid a break in service)

8

Credit for Nonperformance

• Marvin works 900 hours of service

• Takes a 4 week paid leave of absence (160 hours)

• Marvin has 1060 hours of service

Counting HOS

• Two options for counting HOS

• Count actual hours

• Easy to do for workers paid by the hour

• Time cards work well

• Nearly impossible for salaried professionals

• Use equivalency

• Plan document must specify method being used

9

Available Equivalencies

• Working hours

• Disregard nonperformance hours

• 870 working hours = 1 YOS

• Regular hours

• Disregard nonperformance & overtime

• 750 regular hours = 1 YOS

• Earnings method

• Divide compensation by lowest hourly pay rate

• Employment period method (next slide)

Employment Period Method

• 1 day = 10 HOS

• 1 week = 45 HOS

• ½ month = 95 HOS

• 1 month = 190 HOS

• 1 shift = Entire length of shift

10

Eligibility Computation Period (ECP)

• 12-month period used to determine whether EE has YOS

for eligibility purposes

• First ECP: Always starts with Date of Hire (DOH) and

ends 12 months later

• Subsequent ECPs: Plan choice:

• Base on anniversary of DOH

• Shifting to Plan Year

• Most plans shift to plan year

What’s Date of Hire?

• Technical term: employment commencement date

• Date of first hour of service

• Generally, as employee (not as contractor)

• Leased or worksite EE – First day perform HOS for ER

• Controlled or affiliated service group – First day of service for any

group member

11

Shifting ECP

• JKL plan requires 1 YOS

• If you don’t have 1 YOS in first year, subsequent ECP

based on (calendar) plan year

• Jennifer hired 5/2/11, works 800 hours/yr

• First ECP 5/2/11 – 5/1/12

• Second ECP 1/1/12 to 12/31/13

• Hours performed from 1/1/12-5/1/12 counted in 2 different ECPs

ECP Shift Example

• Jennifer begins employment 6/1/10 • Works part-time (60 hours per month) through 5/31/11 • 6/1/11 begins full time (150 hours per month – for next

couple of years) • Plan shifts to (calendar) plan year • When does Jennifer have 1 YOS for eligibility?

(60 hrs/mon) (150 hrs/mon)

420 hrs 300 hrs 1,050 hrs

| | | | |

6/1/10 1/1/11 5/31/11 12/31/11 5/31/12

12

ECP Shift Example

• Lorraine begins employment 11/1/11 • Works full time (150 hours per month – for next couple

of years) • Plan shifts to (calendar) plan year • When does she have 2 YOS for eligibility?

(150 hrs/mon)

300 hrs 1650 hrs

| | | |

11/1/11 1/1/12 10/31/12 12/31/12

|______ 1 YOS________ __|

|_______ 2 YOS __ ____|

Odd Result

• CY plan has YOS with quarterly entry

• Shift to PY for eligibility

• Individual A (rehire):

• May 2011 - August 2011: 430 hours

• Rehired August 2012

• 1/1/12 - 12/31/12 – 950 hours

• 1/1/13 – 12/31/13: If 1000 hours enters on 1/1/2014

• Individual B (new hire):

• Hired August 2012

• B has 1 YOS on August 2013 and enters on October 1, 2013

• The result: A and B (re)hired on same date but B enters

earlier than A

13

Vesting Computation Period

• May be any 12 month period specified in plan

• Most plans use the plan year as the computation period

Elapsed Time Method

• Based on period of time that elapses while EE is

employed

• Period of Service

• Starts on Date of Hire

• Ends on “severance from service” date = the earlier of date of

severance (e.g., quit) or one year after a leave of absence

• Period of Severance

• Starts on the “severance from service” date

• Ends when employee returns to service

14

Elapsed Time (cont’d)

• Service spanning rule

• If employee returns to work within 1 year, then must be credited

with that year

• Period of Severance can also be Period of Service

• 1-Year Period of Service for eligibility is anniversary of

employment date

• Fractional years count

• 30 days equals month or can use 365 days

• Break in Service (BIS) = a period of severance that isn’t

counted as a period of service

Elapsed Time Example

• Einstein has following employment history:

• Hired March 1, 2011

• Quits October 2011

• Rehired January 2012

• Quits February 2012

• Rehired December 2012

• Einstein has 2 Periods of Service on March 2013

• Did not have 1-year break

15

Predecessor Service

• If ER is “maintaining” a predecessor ER’s plan, the plan

must count service with the predecessor ER

• If the ER is not “maintaining” a predecessor ER’s plan,

the plan may credit predecessor service on a

nondiscriminatory basis

• If a controlled or affiliated service group exists, the plan

must treat service with any group member as service

with the ER

• If a multiple employer plan (MEP) service with all

adopting employers counts

Counting Service

16

General Rule – All YOS Count

• Break in service rules only way to disregard service

• Example:

• Dave works 5 years full-time for XYZ Contractors as union

employee

• XYZ plan excludes union employees

• Doesn’t matter: Dave has 5 YOS

• Same result if working for foreign company

• Must count service before plan established or before

participant enters plan

• Break in Service (BIS) = computation period where EE

does not complete more than 500 HOS

Maternity/Paternity Leave

• For purposes of determining BIS only, plan must count

unpaid hours for:

• EE’s pregnancy,

• Birth of EE’s child,

• Placement of an adopted child with EE

• Child care by EE starting right after birth

• Limit: Enough hours to prevent a BIS in current year (or

next year if no actual BIS in current year)

• Remember: paid leave = up to 501 actual HOS

17

Overview of Eligibility BIS Rules

• Allow you to disregard service

• Temporarily or permanently

• Otherwise you must count prior service

• Three rules

• 2 YOS eligibility rule

• 1 year holdout rule

• Rule of Parity (5 BIS)

2 YOS Eligibility Rule

• Only applies to plans using 2 YOS eligibility condition

• Plan can require completion of 2 YOS without intervening

BIS

18

1-Year Holdout Rule

• If EE has BIS, then not required to count prior service

until EE completes 1 YOS after rehire (based on date of

rehire)

• Situation:

• EE enters plan

• Terminates employment

• Incurs BIS

• Rehired

• Retroactive entry to reemployment commencement date

or, if later, first day of ECP that EE completes 1,000 HOS

1-Year Holdout Rule

Date Event

January 1, 2008 Hired

December 31, 2008 Credited with 1 YOS

January 1, 2009 Enters plan

May 15, 2009 Quits (700 HOS)

December 31, 2010 Credited with 1-yr BIS

August 14, 2012 Rehired; reemployment commencement date

March 1, 2013 Completes 1,000 HOS after rehire; enters

retroactively to August 14, 2012

19

1-Year Holdout Rule Usually Bad Choice

• May have to give retroactive contributions

• Including top-heavy

• Unusable for elective deferrals

• How can you defer retroactively?

• IRS does not believe the rule can be used for elective deferrals

• Only people it keeps out permanently are part-time

rehires or those who leave soon after rehire

Rule of Parity

• Only applies to nonvested participants

• Can treat rehired EE as new employee if consecutive BIS

at least equal to greater of:

• 5, or

• YOS prior to BIS

• If participant has 5 or fewer YOS, then must have 5 BIS

• If participant has more than 5 YOS, then must have BIS

equal to number of YOS (but rule rarely applies because

if 5 YOS, then at least partially vested)

20

Parity BIS Eligibility Example

Date Event

January 1, 2005 Hired

January 1, 2006 Enters plan

November 1, 2006 Quits with 2 YOS; no vesting

December 31, 2007 First 1-yr BIS

December 31, 2011 Fifth 1-yr BIS

August 1, 2012

Rehired; reemployment commencement date;

must satisfy current eligibility requirements and

pass entry date to enter plan again

Rule of Parity – No Prior Plan

• Employee worked full time for 5 years but employer did

not have plan

• Quits

• Rehired after 10 years

• Do the 5 years count?

• Not clear since rule of parity applies to vested participants and

there was no plan

21

Other BIS Notes

• BIS rules must be in plan document to apply

• Don’t assume they are there – check the document

• Remember: Other than through BIS rules, rehired

participant generally enters plan on date of rehire

Classes of Rehired Employees and When They Enter (Re-enter)

Class Entry

Already satisfied minimum age

and service and entered plan

Immediately upon rehire

Already satisfied minimum age

and service but terminated

employment before entry date

Immediately upon rehire (or

original entry date, if later)

Already satisfied minimum service

but didn’t enter plan because of

minimum age requirement

Immediately upon rehire (or

entry date following

attainment of minimum age, if

later)

Didn’t satisfy minimum service

requirement

Wait until entry date following

satisfaction of eligibility

requirements • Assumes no BIS rules and that person is an eligible employee

22

When Does Marty Enter (Re-enter?)

• ABC hired Marty (age 30) May 1, 2010

• ABC calendar year 401(k) plan has: • 1 YOS/Age 21 entry requirements

• January 1/July 1 entry dates

• Shifting eligibility computation period

• No eligibility break in service rules

• Marty always works 150 hours/month

• When does Marty enter/re-enter plan after rehire?

Marty Quits Marty Rehired

a) Aug. 1, 2011 May 15, 2013

b) Feb. 1, 2011 May 15, 2013

c) Feb. 1, 2011 May 18, 2011

d) Aug. 1, 2010 Mar. 1, 2012

Additional Rules for Vesting

• May exclude service (subject to terms of plan):

• Prior to age 18

• Prior to initial effective date or predecessor plan

• During which mandatory employee contributions were not made

• After 5 BIS, future service is excluded in determining

vesting of prior contributions

• This is why plans provide for a forfeiture after 5 BIS – vested % of

the existing account will not be increased

• This rule does not affect vesting of future contributions

23

Forfeiture

• May be earlier of distribution of vested interest in plan or

5 BIS

• Requires buy-back provisions

• May be after 5 BIS in service regardless of whether

distribution is made

• Requires full vesting if plan is terminated before participant has 5

BIS

Buy-back Provisions

• Applies if employee receives distribution due to

termination of participation in plan and plan forfeits non-

vested interest

• Repayment must be made by earlier of

• 5 years after re-employment

• 5 breaks in service

• Deemed cash-out of $0 = deemed repayment of $0 if

rehired before repayment period ends

24

Buy-back and Forfeiture Restoration

• No guidance requiring notification of buy-back rights

(other than in SPD)

• Buy-back

• May be made with:

• After-tax amount

• Rollover

• No adjustment for earnings unless DB plan

• 401(k) plan may require payment of elective contributions

• Forfeiture restoration

• Can use current year forfeitures

• Employer must contribute

Rehired Employees and Distributions

• Example:

• Plan allows distributions upon termination of employment

• Plan does not permit in-service distributions

• Marvin quits July 15, 2009

• Marvin is rehired June 1, 2013

• Marvin requests distribution on June 2, 2013 claiming he was

entitled to termination distribution

• IRS has informally indicated that plan could refuse to

make distribution

25

Automatic Enrollment – Special Rules

• EACA – refund available 90 days from first automatic

deferral

• If no automatic deferrals for entire PY then treat as new

participant

• New 90 withdrawal right based on next automatic deferral

• QACA – escalation of automatic deferral based on year

of initial automatic deferral

• If no automatic deferrals for entire PY then treat as new

participant

• QACA escalation starts all over

• Rules are not limited to re-hired employees

Military Service

26

USERRA

• Uniformed Services Employment and Reemployment

Rights Act of 1994

• Internal Revenue Code §414(u)

• USERRA generally requires employers to re-employ

former employees who entered US military service

• We won’t cover re-employment rights as these are labor

law issues

Most Pension Rights Contingent on Reemployment

• If an employer reemploys a worker following military

service:

• The employee is not treated as having incurred a break in service

by reason of military service

• Military service is treated as service with the employer

• The employee receives the contribution he or she would have

received had the employee remained at the employer

27

Compensation

• A participant’s compensation for retirement plan

purposes while the participant is in the military is:

• The pay the participant would have received had the participant

not gone into the military

• If that cannot be determined, use average pay during the year

preceding military service

Contributions Included

• All contribution types

• Top heavy minimum

• Safe harbor contributions

• Matching contributions

• Discretionary or fixed contributions

• Profit sharing or pension contributions

• Defined benefit accruals

• No need to adjust for earnings or reallocate forfeitures

28

Make-up Contributions

• Reemployed personnel can make up deferrals or other

employee contributions which they could have

contributed while absent because of military service

• If you make up the deferral, you get the match

• Can designate year

Time in military Employee contribution

make-up deadline

Less than 20 months 3 X length of service

At least 20 months 5 years

Effect of USERRA Contributions

• Employer and employee contributions count in year to

which contribution relates, not in year of contribution

• Limits such as 401(a)(17), 402(g), 415

• You do not rerun coverage, ADP, ACP and other

nondiscrimination tests to take into account USERRA

contributions

29

HEART

• Heroes Earnings Assistance and Relief Tax Act of 2008

• Retirement issues

• Clarifies treatment of payments to employees in military

• Allows death benefits for employees in military

• Extends qualified reservist distributions

Military Differential Wage Payments

30

What is a Differential Wage Payment?

• Employer’s payment to an individual with respect to

service in the uniformed services

• Must be for active duty

• Minimum: 30 days

• All or a portion of the wages the individual would have received

from the employer if the individual continued to work for the

employer

Tax Treatment

• Differential wage payments are wages for federal income

taxes

• Moves them to W-2

• Had been 1099-MISC if military service “disturbed” employment

relationship

• FICA/FUTA

• No change

• Not taxable if employment relationship “disturbed” by military

service

31

Impact on Retirement Plan

• Makes final 415 regulations obsolete on this issue

• Those regulations apply to limitation years beginning after

6/30/07

• HEART applies for years after 2008

• Inclusion of differential pay for most plan purposes is

optional

• IRS Notice 2010-15 allows exclusion for 414(s) compensation but

not 415 compensation

Employment Status

Plan must treat employee receiving differential wage

payments as still employed

• No severance except for “deemed distributions” (covered

later)

• Employed on last day of year

• Post-severance comp rules are irrelevant

• Payment for nonperformance of duties limited to 501

hours

32

Compare HEART v USERRA

HEART USERRA

Applies to EEs receiving

differential wage

payments

EEs reemployed after

qualified military

service

Compensation Differential wage

payments

What compensation

would have been

Count service for

vesting

Up to 501 hours Count all military

service for vesting

Eligible to defer Optional Mandatory

Top heavy Yes for diff wage pay Yes for comp

Other contributions Optional Mandatory

Nondiscrimination

exemption

Yes, subject to

conditions

Yes

Deemed Severance

• A plan may provide for a “deemed severance” for

distribution purposes (IRS Notice 2010-15)

• If an individual elects to receive a distribution, then

plan must suspend elective deferrals or after-tax for 6

months beginning on the date of the distribution

33

Mandatory Death Benefits

• Plan must provide death benefits to participant who dies

in qualified military service as though reemployed on day

prior to death

• Notice 2010-15 clarified that reemployment is based on

reemployment under USERRA (for vesting purposes)

Application

• Does not require additional benefit accrual or allocation

(i.e., no deemed comp that would normally apply under

USERRA)

• Does apply to:

• Accelerated vesting

• Ancillary life insurance benefits

• Waiver of allocation conditions

• Other survivor benefits contingent upon a participant’s death

while employed

34

Rehired Employees – Are They In or Are They Out

Robert M. Richter, J.D., LL.M.

Vice President SunGard Relius

1

Best Practices for the TPA Firm Tuesday, April 30, 2013

Laura S. Moskwa, CPC, QPA, Principal, Laura

S. Moskwa Consulting

Roundtable

• Discussion facilitation

• Topics presented

• Peer interaction

• Sharing best practices

• Documentation for implementation

2

Best Practice Roundtable Topics

• Firm Management

• Sales and Marketing

• Technology

• Human Capital

Firm Management

• Business Plan and Planning

• Risk/Opportunity Analysis

• Industry/Competitive Analysis

• Operations/Management Structure Plans

• Innovation

• Financial Forecast

• Business Growth

• Reporting Structure

• Organization Chart

• Mission Statement

• Quality Control

• Documentation of all Processes and Procedures

3

Discussion: TPA Sharing

• Do you have a documented business plan?

• What topics do you cover?

• When, how and who is involved in the review and update

of your plan?

• What innovative ideas do you incorporate?

• How many years out do you forecast financially?

• What milestones do you consider in your financial

forecast?

• Do you address business growth goals and if so what are

they?

Discussion : TPA Sharing

• Do you have a mission statement? How did you come

up with the statement, who was involved?

• What have you done to ensure staff buy-in and execution

of companies mission?

• Does your org chart accurately illustrate clear reporting

lines?

• If you have had issues with reporting structure did you

make changes and what were they?

• What has worked and what has not with regard to

reporting structure models?

• How have you handled bottlenecks that have occurred in

the past?

4

Discussion: TPA Sharing

• What quality control measures do you take within your

firm?

• How do you incorporate peer as well as management

reviews?

• What practices does your firm have in place with regard

to review of processes and procedures, their

documentation, sharing and updating?

• How do you ensure that employees are following the

most recent process/procedure?

• How do you track workflow and quality control steps?

• What has been the most effective methodology?

Sales & Marketing

• Branding

• Documented Plan

• Establish Goals

• Identify required Activity

• Consistency

• Sales Process

• Proposal policy

• Tracking

5

Discussion: TPA Sharing

• Does your firm have a documented business development

plan? If so what does it include?

• Do you set “sales” goals each year? If so how do you

determine what activity will be required to attain your goal?

• Do you have staff dedicated to business development in

your firm? How do you track their activity?

• Do you calculate your firm’s close ratio? If so how do you do

that and do you do so taking into consideration whether

someone from you firm was involved or not?

• Do you generate proposals for which no one from your firm

is involved in the sales process? (discovery to close)

Question is how come? Are these successful or typically a

waste of time?

Technology

• In-house vs. outsourcing

• Paperless

• Workflow processing automation

• Archiving

• Remote access

• Disaster Recovery (DR)

• Documentation

• Do your employees have access to the Plan

• Roles/responsibilities clearly outlined and understood

6

Discussion: TPA Sharing

• How much of your technology needs are satisfied by

outsourcing vs. maintaining in-house?

• What did you consider in making your decision as to which

solution you ultimately ended up with?

• Are you paperless? If so to what extent? And how has that

made your firm more efficient?

• Do you use technology to manage workflow? If so what

systems do you use? What has your experience been with

efficiencies and quality control?

• Do you have remote employees? How are they connected?

What challenges have you experienced? What benefits?

• How does that figure into your data security plan?

• What steps do you take to ensure that data is secure?

Discussion: TPA Sharing

• Do you have a documented Disaster Recovery Plan

(DRP)?

• What are the steps included in your plan?

• How do you involve all of your employees in the DRP?

• How often do you test your DRP?

• What does the test entail?

• Have you developed the plan yourself or did you use

outside experts to help?

• If you used an outside expert who did you use, what

services did they provide and are their services ongoing?

7

Retention of Key Personnel

• Aren’t all employees key?

• Be actively committed to retention

• Recruiting the right person for the job

• Empowerment

• Fun Factor

• Benefits that are competitive

• Job Descriptions

• Performance Reviews

Discussion: TPA Sharing

• Do you have a recruiting policy, process and procedure?

If so what is included?

• When do you use recruiters?

• How do you perform background checks and what types

do you perform?

• Have you used personality tests to determine if someone

is a right fit? If so which one and how successful has that

been?

• How do you determine if your compensation and benefits

package is competitive?

• Do you have job description for all positions? What is

included and are they made available to staff?

8

Discussion: TPA Sharing

• What types of benefits, perks, “fun factor” employee

appreciation programs does your firm offer? How have

these programs affected moral, attracting and retaining

employees?

• How do you empower your employees so that they feel

they are part of the solution and success of our

company?

• Do you document your job performance process,

schedule and what is expected of all parties?

• Do you maintain that schedule? And if not how do you

communicate not meeting the schedule, the why and

when employees can expect it to occur?

Best Practices for the TPA Firm

• Identify Opportunities for Improvement

• Prioritize

• Bite size chunks

• Delegate or Hire a Consultant

• Set goals for completion

• Strive for overall best practices within your business!

9

Best Practices for the TPA Firm

Laura S. Moskwa, CPC, QPA

Laura S. Moskwa Consulting

laura@moskwaconsulting.com

530-823-9007

4/12/2013

1

Business Development through Social Media Tuesday, April 30, 2013

Barbara Lewis, MBA, President,

Centurion Consulting Group

Barbara Lewis, MBA • Over 2 decades in marketing professionals

in the retirement services industry

• Started career as journalist - WSJ

• Certified Social Media Strategist

• MBA from UCLA Anderson & Lecturer

• Survey Development

• Well-known clients including:

• National ERISA Attorneys

• Former President of ASPPA

• TPAs, CPAs & FAs

• Book Author – Get a Black Belt in Marketing:

The Marketing Success Book for Retirement

Industry Professionals

4/12/2013

2

Possible Discussion Topics

• What are the most common social media services that

are used by businesses today?

• How can you best target the social media services that

are commonly used by your company’s client base?

• How do you develop social media pages that are tailored

to your company’s business objectives?

• What are some strategies for maximizing “hits” on your

company’s social media pages?

• How do you find referral sources and other contacts in

the social media universe?

• How can you develop a social media page that grabs the

attention of potential clients?

The Survey Says

Facebook – 64% on; No clients generated

• Twitter – 38% on; No clients generated

• Google+ – 27% on: No clients generated

• LinkedIn – 75% on: 15% generated clients

And the Winner Is…..

4/12/2013

3

New LinkedIn Profile Use a color,

professional

square, head &

shoulder shot;

Use your

casual name

Professional “Headline”

Value proposition, trust, credibility – 120 characters

4/12/2013

4

Summary – 1st Person

Be personal; write about something

people may have in common with you

Recommendations

Don’t ask.

Only if

someone

thanks you.

May be

prohibited.

4/12/2013

5

Connections

2. Only valuable

connections

Theories on growing:

1. As many as possible

Websites

Select “Other”

and name your

website as

value

proposition

4/12/2013

6

LinkedIn URL

Obtain

Personalized URL

LinkedIn Settings

4/12/2013

7

LinkedIn Settings

LinkedIn Best Practices – Visibility

Make your Profile Visible to Everyone

4/12/2013

8

LinkedIn Applications – Skills

LinkedIn Applications – Update

4/12/2013

9

Connections

1st = directly

connected; 2nd =

both connected

to someone else

LinkedIn Best Practices – Keywords

Use

keywords

4/12/2013

10

Optimization

Optimize for

your zip code

& surrounding

zip codes

Keyword My Rankings

marketing 11

consulting 1

business plans 1

marketing plan 1

strategic planning 1

business social media 3

Obtain Your Rankings

Click

Advanced Type in

Your Zip

Code Click

Search

Type in

Your

Keyword

4/12/2013

11

View Your Results

I come up first.

2013 LinkedIn Initiatives

New Clients • Optimize your LinkedIn

page

• Grow LinkedIn connections

• Invite current and potential referral sources, in database

• Research referral sources in zip codes

• Join LinkedIn groups

• Participate in LinkedIn groups

Current Clients

• Connect with all your

clients, so you can track

what’s happening with

them

• Follow your clients’

companies

4/12/2013

12

LinkedIn Best Practices – Invitation

Request

connection

with personal

email

Connection Request

Request

connection

with personal

email

4/12/2013

13

Search for CPAs

Click

Advanced

Type in Your

Zip Code

Click

Search

Type in CPA

Set Industry to

Accounting

View Your Results

4/12/2013

14

What Other Social Media are You Using?

1000

800

500

343

200

0

200

400

600

800

1000

1200

Facebook Youtube Twitter Google+ LinkedIn

In Millions

2004 2005 2006 2011 2003

Barbara Lewis, MBA Centurion Consulting Group

2934 Beverly Glen Circle, Suite 240

Los Angeles, CA 90077

Tel: (818) 784-9888

BarbaraLewis@CenturionConsulting.com

www.CenturionConsulting.com

Blog: www.CenturionCMO.com

Twitter: @BlackBeltCMO

LinkedIn: barbaraalewis

1

Employee Development and Performance: Building a Learning TPA Organization Tuesday, April 30, 2013

Charan Singh, APA, Associate Vice President

and Operations Manager, United Retirement Plan

Consultants

Stages of Learning – Evaluating Skill Levels

• “Learning is not attained by chance; it must be sought for

with ardor and attended to with diligence.” – Abigail

Adams

2

Learning Goals – Basic Training

• Entry Level: Learning goals for the first two years

• Remember – Checklist of steps

• Understand – Develop an understanding of the overall process

• Apply – knowledge to a wider variety and larger number of plans

• Start taking NIPA exams

• Mid-Level: Learning goals for the third – fifth years

• Internalize entry level goals (Remember, Understand, Apply)

• Analyze – Why certain problems happened and how to avoid

them

• (Begin to) Evaluate – the work of other administrators (“1st

reviewer”)

• Complete APA program, or make significant progress towards

• Minimal error levels

Learning Goals – Advanced Training

• Senior Administrator: Learning goals beyond the first five

years

• Internalize learning goals for entry and mid-levels:

• Remember, Understand, Apply, Analyze, plus:

• Evaluate (Review) work of other administrators

• Begin to Create/Design plans and complex testing scenarios

• Mentor entry and mid-level administrator

• 5+ Years of Experience

• Hold APA/QPA or other designations

• Work on complex/combo/audited plans for 2+ years

• Minimal error levels

• Significant mentorship credibility

3

Learning Goals – Advanced Training

• Über-Administrator – Consultant, Client Relationship

Manager

• Learning Goals of entry- to senior-levels(Remember, Understand,

Apply, Analyze, Evaluate, Create, Mentor), plus,

• ADVISE & RECOMMEND – discern between available options

and recommend ones that make sense for the plan sponsor’s

situation

• DESIGN plans or plan features to meet plan sponsors’ needs

• RESEARCH and CLARIFY the firm’s position on topics that

impact the industry

• REPRESENT the firm at industry and vendor events (e.g.

NIPA/ASPPA speaker)

Questions for Roundtable Discussion

• How long do you typically allow for training a new hire?

• Do you require industry designations for career

advancement?

• How do you evaluate the skill levels of your staff?

• If you have in-house training, what is your training program?

• How do you identify on-going training needs and do you

allot time for it?

• Do you budget for training costs each year?

• Do you allow employees to study on company time?

• What do you feel has been the most effective training

process?

4

Supplemental Materials

• Evaluation of Administrators’ Levels – a simplified worksheet

approach

• Adult Learning Theory:

• Adapted from: Knowles, M. (1996). Adult Learning. In Robert L.

Craig (Ed.), The ASTD Training and

• Development Handbook (pp. 253-264). NY: McGraw-

Hill.Designing Hybrid OnLine/In-Class Learning Programs for

Adults, – Harvard Business School

• How other related industries hire/train:

• Is Law School Right for Me? – Brigham Young University Pre-

Law Evaluation

• Personality: What It Takes To Be An Accountant – Bealing,

Baker, Russo, Bloomsburg University; The Accounting

Educator’s Journal

• Is an Accounting Degree Right for Me? – Franklin University Blog