BPAS, a national provider of administration, actuarial, consulting and institutional trust services to benefits plans in the U.S. and Puerto Rico, has acquired the daily valuation-defined contribution (DC) plan administration practice of Lifetime Benefit Solutions (LBS), a subsidiary of Lifetime HealthCare Company.
When the transaction is complete, BPAS will administer more than 3,700 plans with 390,000 participants, and provide trust services to $19 billion in assets, and will generate more than $48 million in annual revenue, the firm said in a statement. A previous acquisition in 2013 gave the firm $13.5 billion in assets under custody.
BPAS employs 250 professionals and provides retirement plan administration, actuarial and pension, health care consulting, VEBA/HRA, collective investment fund administration, and other employee benefit trust services on a national scale from offices in four states and in Puerto Rico.
According to Barry S. Kublin, chief executive of BPAS, the transaction is part of its strategy of growth through organic expansion and acquisitions. The organization’s employee benefits administration business continues to expand its national footprint and diversify its service offerings.
Employees
should start their retirement income planning sooner rather than later. They
may have limited sources of retirement income. The timing of Social Security can
make a difference, and their biggest worry is long-term care needs, according to Stephen
Locko, executive vice president and chief operations officer at ISN Network, a
firm that provides back office support to financial professionals.
Locko
told attendees of the National Tax-Deferred Savings Association (NTSA) 403(b)
Summit that employees need protection for their retirement income. Planning
should include addressing market risk, taxes and inflation, but also health
care expenses, long-term care and legacy plans. “You don’t want to dip into
your retirement accounts to cover health and long-term care costs,” he said.
Locko
noted that most employees have hardly or not at all saved specifically for
health care in retirement. “Most people think Medicare will take care of
everything,” he said. “They need education.” Employees can use insurance to
supplement retirement income and protect against health and long-term care
costs, according to Locko. “Insurance is where you can really provide a lot
more benefit to employees.”
Life
insurance can protect against loss of income when one spouse in a couple dies
and may also provide extra income when needed. Long-term care insurance can
protect against having to dip into retirement savings for these costs. ISN
research found 38% of individuals will incur long-term care costs of between $25,000
and $250,000, Locko said.
NEXT: When Social Security is unavailable or
stops.
Social
Security planning is becoming a big business, Locko noted. When planning for
retirement income, employees need to know what Social Security pays and when.
Deferring
taking Social Security benefits until age 70 essentially gives employees an 8%
simple return on what they would have received at normal retirement age (now
66), Locko said. “You can’t get that return anywhere else,” he says. And, employees should
not start taking Social Security benefits while still employed full-time,
because their benefit will basically be cut in half, he added.
According to Locko, the
most common strategy being touted for a married couple is for one spouse to
file for benefits but suspend taking them and the other to take the spousal
benefit based on the spouse who filed. Then when the first spouse starts taking
the benefits, the second spouse will file for his or her own.
This
produces much more benefit for the couple, but when one spouse dies, one check
goes away, Locko noted. Individuals need to plan for replacing that second
check, and this is another place where insurance can come into play.
Locko
also pointed out that for governmental employees, 30% in 12 states get no
Social Security benefit, and 27 states have government offsets to public
employees’ Social Security benefits. This also affects spouses and
beneficiaries. Pensions and defined contribution plan savings may not be
enough.
Insurance helps
reduce the risk of running out of money in retirement, he said. Even if already
in retirement, individuals can use their required minimum distributions
(RMDs) to purchase insurance products, he suggested.