Products August 20, 2020

Security Benefit Introduces Mobile App for Retirement Plan Participants

The firm says it is trying to bring the services and technological conveniences typically offered to large plans to the smaller 401(k) and 403(b) market.

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Security Benefit has launched its first mobile app for retirement plan participants, called My Security Benefit. It covers 401(k)s, 403(b)s and other types of defined contribution (DC) plans, as well as individual retirement accounts (IRAs).

Greg Kratz, head of mutual fund platforms, tells PLANSPONSOR the application is intuitive and multi-functional. “You can get your account balance, review contributions and track investment performance,” Kratz says. “One of the things we are excited about is the retirement calculator. It allows users anywhere, or with the help of their adviser, to rightsize their contributions based on their personal goals, to enhance their retirement readiness. It walks participants through five questions, including their salary, deferral rate, outside assets or savings and what percentage of their salary they would like to live on in retirement. If they don’t know the answer to a question, to make it easy to use, the calculator tells the participant what the typical answer is.”

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The calculator then can tell the participant if they are on track for a successful retirement or if they need to make adjustments, Kratz says. The score is based on a value of zero to 100.

Participants can change their allocations through the mobile app, Kratz says, but to increase their deferral rate, they need to work with their employer.

Doug Wolff, senior vice president of Security Benefit, adds: “What we are really trying to do is bring the services and technological conveniences you typically find in a large 401(k) plan to the smaller 401(k) and 403(b) market and the advisers that serve these plans.”

In conjunction with the new application, Security Benefit is also rolling out a new platform that combines health care and wealth management. The platform includes educational articles on a range of topics. When participants take classes, they receive points that they can redeem at large retailers, Kratz says. “You can even sync your fitness tracker to the platform and build points when you take steps. Enrollment is paperless, which is another feature we think clients will like.”

On the investment side, the platform offers SmartChoice, an open architecture investment platform that offers fiduciary services to advisers, he says. “But if a sponsor or adviser wants to use their own fiduciary services, we can unbundle this,” Kratz says.

Wolff adds: “While this has been a time when many companies have taken a step back or paused in the retirement space, we have been moving forward and upgrading our service capabilities to improve the experience and ease of use for retirement plan participants.” Wolff adds that the interactive nature of the app gives financial professionals the opportunity for more contact with participants, on a more consistent basis, which advisers should find particularly useful at this time of COVID-19 lockdowns preventing many advisers from having group or one-on-one meetings with participants.

Products August 20, 2020

Lockton Announces New PEPs Series

The new outsourced administrative responsibilities practice will serve both small and large employers.

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Lockton has launched a practice designed to help employers reduce the risk, effort and expense of sponsoring retirement plan benefits.

Based in the Northeast and co-founded by advisers Tom Clark and Mike Duckett, the new outsourced administrative responsibilities (OAR) practice will make pooled employer plans (PEPs) the first order of business. Lockton will launch a series of PEPs, initially in the Northeast and then nationally, over the next several months.

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“Lockton’s philosophy for delivering retirement advice has always been based not only on objectivity, but also maximizing the market’s potential. To do that, we must constantly innovate. OAR was specifically designed to leverage the marketplace inflection point the Setting Every Community Up for Retirement Enhancement [SECURE] Act created. That’s why we’re designing multiple PEP solutions. It’s a very strategic decision to maintain our objectivity and it’s a recognition that clients need more than a one-size-fits-all solution,” says Pam Popp, president of Lockton Retirement Services.

PEPs are often considered small plan solutions, but Lockton has engaged with providers Principal and Transamerica to develop PEPs for the larger market.

“Lockton believes that those who interact most directly with clients are best positioned to drive innovation,” says Bob Connolly, CEO of Lockton’s Northeast series. “That’s why we charged Tom and Mike with gathering marketplace intelligence and partnering with industry leading recordkeepers and asset managers to build a program that will set the standard PEP offerings.”

“The new rules create huge opportunities for retirement plan sponsors,” says Sam Henson, director of legislative affairs for Lockton Retirement Services. “Before, these programs were limited to affiliated organizations. Now any employer can pool their plan’s assets with other employers. The benefits are significant, including streamlined administration, reduced compliance and fiduciary risk, and greater plan negotiation leverage. The biggest advantage for companies dealing with COVID-related business challenges is the opportunity to provide best-in-class retirement benefits and shift the majority of fiduciary responsibilities to industry experts.” 

“Many anticipate that traditional multiple employer plan [MEP] providers will simply retool old, small market offerings with a ‘PEP’ label,” says Duckett. “Our approach begins with solving for our clients’ business needs. We’re leveraging opportunities created by the SECURE Act to enhance plan design flexibility and increase clients’ ability to outsource administrative complexity.”

In addition to outsourcing, PEPs allow employers to benefit from scale. According to Clark, this includes not only the scale of the employers’ combined plan assets, but also the scale of the associated adviser’s book of business.

“Objectivity is so foundational to what we do that, when building our multiple PEP options, we refused to sacrifice flexibility or best-in-class asset management just to achieve better pricing,” Clark says. “Instead, we leveraged Lockton’s negotiating strength. Where others create savings by consolidating assets to achieve $50 million or so of purchasing power, the clients attracted to a Lockton-built PEP can achieve the scale generated by more than $1 billion.”

PEPs are not a single provider offering. They must be constructed through partnerships of several entities including administrators, asset managers and advisers.

“Clients turn to and trust Lockton to help them solve complicated issues on insurance, benefits and retirement. Our specific clients in the Northeast tend to have complicated plan design rules as a result of their contracting requirements, and many have unique needs as it relates to ownership groups, M&A [mergers and acquisitions] and compliance testing. OAR will help our middle market clients to solve these important issues, while also outsourcing their fiduciary and administrative responsibilities and risks,” Connolly says.

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