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Apr 13
How The Prime Rate Affects 401k Loans

Today many 401k plans include provisions for a participant 401k loan. That means an employee can borrow money from his or her account and repay it through payroll deduction without incurring taxes or penalties.

This announcement provides the details of the changes to the Prime Rate and its effect on 401k loans.

What is the Prime Rate?

The interest rate that commercial banks charge their most credit-worthy customers. Generally, a bank's best customers consist of large corporations. The prime interest rate, or prime lending rate, is largely determined by the federal funds rate, which is the overnight rate which banks lend to one another. The prime rate is also important for retail customers, as the prime rate directly affects the lending rates which are available for mortgages, small business, and personal loans.

The Prime Rate went from 3.75% to 4% on 3/16/2017

How does this affect 401k loans?

Plan sponsors are tasked with setting the loan interest rate for the plan. For most participants, the interest rate is the Prime Rate plus one or two percent. However, this can be different for each plan. Spectrum tracks the Prime Rate in our recordkeeping system and will adjust the rate based on the current prime rate.

Participants who request a loan after 3/16/2017 will see an increase in the loan interest rate over the term of the loan.

As you consider the options in your 401k plan Spectrum Participant Services Specialists are here to help. Contact them today about your retirement plan.

Phone: (888) 565-401k (4015)

Email: participant.services@spectrumpension.com

Apr 07
Spectrum Attends 2017 Chales Schwab National Summit

​The landscape of retirement is changing, and this year's conference will focus on how those changes are transforming today's client experience. Together, we'll explore how to capitalize on those changes to drive growth in this new era. You'll leave with fresh ideas on how to scale your firm, drive business, and strengthen relationships. ​

Mar 30
Fidelity Retirement Roundtable

​​Fidelity Learning Exchange​

According to the most recent Fidelity Plan Sponsor Attitudes survey, 87% of plan sponsors use an advisor on their plan and for the first time, fiduciary responsibilities are the top reason for hiring an advisor.​

Please join Fidelity Institutional Asset Management and Spectrum Pension Consultants for a roundtable discussion covering the topics below: 
Fidelity's retirement plan offering 
Retirement plan market landscape and trends 
Partnering with a Recordkeeper on your retirement plan business

Featured Speakers:
Yannis Koumantaros, Managing Director, CFO, Spectrum Pension Consultants 
Benjamin Leger, SVP, Fidelity Institutional Asset Management

Hosted by:
Stan Smith, VP, Senior Relationship Manager, Fidelity Clearing & Custody SolutionsSM
Nicole Kautz, Director, Retirement Connection Program, Fidelity Clearing & Custody SolutionsSM

Who Should Attend:
Principals, advisors and firm decision-makers interested in the retirement plan business. 

Mar 27
Refreshing a Stale 401(K) Plan
Problem Encountered
We received an RFP from a manufacturing plant owned by a foreign based company. Their HR team had totally turned over in the midst of our proposal opportunity. They were being serviced by a name brand mutual fund, but it had no advisor. They had mostly target date funds, low participation and low contribution rates.

ABG Solution
We redesigned the plan to include auto enrollment and auto escalation and increased the matching contribution. We replaced the basic fund lineup with asset allocation models designed by an advisor, and showed participants how to become more retirement ready. A Blackrock service, called Future in Focus, played an important role also. As a result of our efforts, we won this $46 million plan.

Best Practice Learned
Brand name solutions don’t always include the proper plan design, especially when they are not local to the plan sponsor, as we were.
Advisors can generally provide better investment alternatives, including asset allocation models, than target date funds.

To view the original post, click here .

About Alliance Benefit Group (ABG) 
Alliance Benefit Group (ABG) founded in 1992 is a consortium that provides services to over 22,000 Plans, more than 1.2 Million Participants, and administers north of $64 Billion in plan assets. Spectrum is the first west coast ABG affiliate, and the only firm west of Utah to be part of this consortium. Learn more here: www.abgnational.com. 

About Spectrum Pension Consultants, Inc. 
Spectrum is a leading service provider to employers sponsoring various retirement, deferred compensation and other employee benefit programs in the United States. Spectrum's services are tailored to the specific needs of each individual client and include: consulting and advice; plan management and administration; and employee communication and education services. Additional information about Spectrum is available at the company's website: www.spectrumpension.com. 
Mar 22
Spectrum Attends the 2017 Investment Forum in Seattle Sponsored by J.P. Morgan Asset Management
Mar 19
Spectrum Attends the NAPA 401(K) Summit

​The National Association of Plan Advisors, part of the American Retirement Association, is the only association created by and for retirement plan advisors. Membership is also open to other retirement industry professionals who support the interests of plan advisors.​

Mar 14
Doctor Group Mergers
Problem Encountered
We had a longstanding client relationship with a 12 partner Orthopedic group. As is happening in the health field, they wanted to merge practices with four other Ortho groups to form a super group with 50 partners. We had established a 401k plan and a cash balance pension plan for our group, and the partners were projected to end up with $2.5-3.0 million in each of these plans by retirement. Incredulously the other four groups all had just safe harbor 401k plans, and one had a cash balance plan with only one year of contributions. The other four plans had been serviced by two name brand mutual funds, an insurance company, and an independent recordkeeper.

So after analyzing all the proposed benefit structures, the super group chose ABG to service the new plan(s) going forward after the merger.

ABG Solution
We created new 401k plans and cash balance plans for the new group as of 1/1/17. We kept their current 401k/profit sharing plans open to give them some greater flexibility in 2017. But more importantly, there have been $7 million in new contributions to the 401k and cash balance plans as of 2/28/17! And we’ve designed the plans to allow for additional medical groups to join the corporation and participate.

Best Practices Learned
Even though a so called ‘brand name institution’ may be servicing a plan, that does not mean the plan is designed properly.
Don’t assume all medical groups have the properly designed plans for their makeup!
Look to an ABG firm for cash balance pension plan consulting for any professional type group (doctors, lawyers, accountants, engineers etc).

To view the original post, click here.

About Alliance Benefit Group (ABG) 
Alliance Benefit Group (ABG) founded in 1992 is a consortium that provides services to over 22,000 Plans, more than 1.2 Million Participants, and administers north of $64 Billion in plan assets. Spectrum is the first west coast ABG affiliate, and the only firm west of Utah to be part of this consortium. Learn more here: www.abgnational.com. 

About Spectrum Pension Consultants, Inc. 
Spectrum is a leading service provider to employers sponsoring various retirement, deferred compensation and other employee benefit programs in the western United States. Spectrum's services are tailored to the specific needs of each individual client and include: consulting and advice; plan management and administration; and employee communication and education services. Additional information about Spectrum is available at the company's web site: www.spectrumpension.com.

Feb 16
Spectrum Gold Sponsor of Cyber Security Seminar in Portland, OR

Join the ABC of the Great Northwest and Speaker Joseph J. Lazzarotti, an attorney well versed in Cyber Security as it applies to ERISA for an informative and timely seminar. 

 

  • Data Security – A competitive advantage. How to use data security to better promote your businesses.
  • Negotiating contracts with plan sponsors. Key issues and considerations.
  • Negotiating contracts with vendors. Top issues encountered with service providers – IT companies, administrators, actuaries, accountants, lawyers, others.
  • We have a major breach affecting client data, now what? Examples of key data breach issues in ERISA plan context. 
  • What are our data security obligations as service providers – legal, contractual, fiduciary, ethical.  Includes a high-level discussion of laws and obligations in ERISA plan context.
  • Tips for training employees on data security. Developing and implementing a training and awareness program.
  • Where do we get started – risk assessment? What you need to know when conducting a risk assessment in an ERISA plan context.
  • Do we need cyber-insurance? Basic considerations when shopping insurance.

Feb 15
Spectrum Gold Sponsor of Cyber Security Seminar in Seattle, WA

Join the ABC of the Great Northwest and Speaker Joseph J. Lazzarotti, an attorney well versed in Cyber Security as it applies to ERISA for an informative and timely seminar. 

 

  • Data Security – A competitive advantage. How to use data security to better promote your businesses.
  • Negotiating contracts with plan sponsors. Key issues and considerations.
  • Negotiating contracts with vendors. Top issues encountered with service providers – IT companies, administrators, actuaries, accountants, lawyers, others.
  • We have a major breach affecting client data, now what? Examples of key data breach issues in ERISA plan context. 
  • What are our data security obligations as service providers – legal, contractual, fiduciary, ethical.  Includes a high-level discussion of laws and obligations in ERISA plan context.
  • Tips for training employees on data security. Developing and implementing a training and awareness program.
  • Where do we get started – risk assessment? What you need to know when conducting a risk assessment in an ERISA plan context.
  • Do we need cyber-insurance? Basic considerations when shopping insurance.
Jan 19
How The Prime Rate Affects 401k Loans

Today many 401k plans include provisions for a participant 401k loan. That means an employee can borrow money from his or her account and repay it through payroll deduction without incurring taxes or penalties.

This announcement provides the details of the changes to the Prime Rate and its effect on 401k loans.

What is the Prime Rate?

The interest rate that commercial banks charge their most credit-worthy customers. Generally, a bank's best customers consist of large corporations. The prime interest rate, or prime lending rate, is largely determined by the federal funds rate, which is the overnight rate which banks lend to one another. The prime rate is also important for retail customers, as the prime rate directly affects the lending rates which are available for mortgages, small business, and personal loans.

The Prime Rate went from 3.5% to 3.75% on 12/15/2016

How does this affect 401k loans?

Plan sponsors are tasked with setting the loan interest rate for the plan. For most participants, the interest rate is the Prime Rate plus one or two percent. However, this can be different for each plan. Spectrum tracks the Prime Rate in our recordkeeping system and will adjust the rate based on the current prime rate.

Participants who request a loan after 12/15/2016 will see an increase in the loan interest rate over the term of the loan.

As you consider the options in your 401k plan Spectrum Participant Services Specialists are here to help. Contact them today about your retirement plan.

Phone: (888) 565-401k (4015)

Email: participant.services@spectrumpension.com

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