Rich and Co.

New Business Opportunity for Retirement Advisors: FutureBenefits of America MEPs

Emerging Retirement Experts — FutureBenefits of America Offers Open-Architecture Multiple-Employer Plans (MEPs)  (Contact information below)

(When we hear good news stories in the retirement market we like to share them.  Here is one.) 

“This should really be an easy sale for an advisor if you have an established plan created.  Getting small employers to adopt a plan where they can alleviate fiduciary liability and limits the cost to them, should be very inviting to a potential small business.” Tony Michael, President, FutureBenefits of America

We are always interested in new ways to support and offer opportunities for advisors that want to work with retirement plans. 

The retirement plan business is a hyper-competitive business that also demands some real expertise, above and beyond what most advisors have.  In addition, few broker dealers supply adequate retirement plan prospecting services or support.  Most B/Ds have actually cut back on staff and support for retirement plans.  

Your TPA – Retirement Advisors’ Strong Partner
At the same time, third-party administration firms (TPAs) are eager to work with, educate and support advisors in building their retirement plan, and rollover, businesses.   

TPAs have real advantages to share with advisors:

  • TPAs work in your local market
  • They already have in-place successful systems, tools and business development support
  • A good TPA partner will walk an advisor thru every step of educating them, providing support pre- and post- sale and is always available for prospect and client meetings.  Free of charge!
  • The TPA is experienced with all the packaged advisor-friendly 401(k) products and packages.  Sometimes they have their own recordkeeping systems that the advisor can “co-brand.”   

The Advisor-Friendly and Multiple-Employer Plan (MEP) Specialist — FutureBenefits of America
One of the best and most advisor-friendly TPAs we have met is our new client  — FutureBenefits of America (FBA) (  What has impressed us about their practice includes: 

  • Dedication to helping advisors build their 401k business
  • Top-level expertise and resources so an advisor can walk into a competition and have solutions that will differentiate them
  • Thought- and process-leadership
  • Special skills and opportunities in Multiple-Employer Plans (MEP)
  • Offers a, somewhat unique, open-architecture MEP program as opposed to standard group annuity products. 

This last point may offer hungry advisors a real opportunity for new plan and asset gathering.  So let’s look at this more closely. 

Open-Architecture Multiple-Employer Plans (MEP) — A New Opportunity for Advisors
Tony Michael is the owner of FutureBenefits of America and a very experienced and solid professional.  We see real opportunity in the MEP program he has created and worked with successfully for over ten years. 

What makes MEP’s new is the demand for low cost 401(k) plans and risk- and purchasing-sharing among employers, especially small employers. 

We asked Tony to tell us about the basis of these kinds of plans and the opportunities for advisors. 

Q.  Tony, tell me what is a MEP and how do they work?   

A.  Most plans are considered single employer plans.  An MEP is a Multiple Employer Plan which means there is one Plan Sponsor responsible for the plan but has many adopting employers of the plan.  A document is created to set up a template 401k plan.  Separate companies agree to and adopt the contents and policies of that document in order to be part of it.  

There are usually a few separate options listed on the adoption agreement that lets each employer have different choices within the plan and let each customize the plan practices and features to their specific needs, i.e., eligibility, loans, hardships, etc..  

Q.  What’s the history?  How did you get into the business?  What are your offerings?    

A.  MEP’s have been around for a very long time.  Actually Andrew Carnegie started an endowment trust of $10 million in 1905 that later became TIAA-CREF.  It was built for teachers to contribute to a plan.  You could say that it was the beginning of the MEP.  

I began working with MEP’s around the year 2000.  We provided daily recordkeeping and administration for an investment group.  At one time there were close to 100 separate MEP’s on our system.  Many of the offerings today involve group annuity platforms.  We are one of the few that offer an open architecture platform.  Mutual funds, ETFs, Collective Trust and Money Managers are all part of the offerings available on the platform.

Q.  What does a solution look like? 

A.   There are many solutions, but let’s just choose one to look at.  Associations are a good place to look.  Associations usually involve many different companies that have a connection to this one entity.  It can be quite costly for each one of those employers to start their own plan.  

By having the Association sponsor the plan and allow all the groups that are part of the association join as an adopting employer, the cost of setup, base fees, audit and other cost are saved by each individual adopter.  Independent contractors can also be part of that opportunity.  It does not have to be a group associated with each other for an open-architecture multiple-employer plan to work; it seems the cohesiveness of this setup is best.  

Q.  Why should people look into a MEP?  What are benefits for the advisor, for plan sponsor?    

A.  It is estimated that 46 percent of small firms are not covered by a retirement plan.  According to the Department of Labor (DOL), small businesses account for 99.7% of the total number of firms.  That would mean that 50% of employees are not part of a plan.  Most of them do not start a plan for their employees because of cost and liability.  

A MEP can help in both of those areas.  The employer can transfer a large part of their fiduciary liability by adopting an MEP.  As we talked about above, the costs are considerably lower due to the economies of scale of many adopting employers added together.  

Q.  Tony, get into the mechanics of how they work and what mistakes to look for. 

A.  MEP’s have a few wrinkles that most plans don’t deal with.  This is why there are only a few TPA’s who want to administer them.  Multiple payrolls being processed can cause many TPA’s to avoid these types of plans.  It is hard to keep cost down from the processing cost.  

There are many rules that are not common to traditional plans especially when it comes to distributions that can cause trouble down the road for a TPA.  It is imperative that you find someone with experience working with MEP’s to avoid any pitfalls in the administration

Q.  What should an advisor look out for with MEP’s? 

A.  The advisor really doesn’t have a lot of problems with the MEP that they should be overly concerned with.  Maybe the biggest issue would be communication with so many different locations.  Since they are not dealing with the compliance issues themselves, they can rest a little easier having a competent TPA handle that aspect.  As stated before, just make sure you are working with a TPA that understands the MEP and compliance issues involved with them.  

Q.  What is the opportunity for advisors – right now?  

A,  This should really be an easy sale for an advisor if you have an established plan created.  Getting small employers to adopt a plan that can alleviate fiduciary liability and limits the cost to them, should be very inviting to a potential small business. 


Tony A. Michael, CRPS
FutureBenefits of America
11121 Highway 70 — Suite 201
Arlington, TN  38002 (Outside Memphis)
901-843-7799 x.102
fax 901-462-0573


Written by Rich and Co.

April 11, 2011 at 1:27 pm

Posted in Uncategorized

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