Retirement Plans

Whether you are just thinking about establishing a retirement plan for your business, want to review and improve the investment options within your current plan, or want to help your employees make smarter financial decisions when saving for their own retirement, GA Bishop and Associates, LLC can help.  We offer the following three services, each designed to address one of these areas:

·        Retirement Plan Selection Recommendation

·        Investment Options – Review and Recommendations

·        Sample Portfolios for Retirement Plans

·        Tactical Asset Allocation Subscription Service for Retirement Plans

·        Financial Investing Profile Session

·        Financial Seminars for Employees

Retirement Plan Selection Recommendation

Businesses today have many options available when considering the establishment of a retirement plan for themselves and their employees.  Adding to the complexity is the fact that currently, qualified dividends and capital gains are taxed at a maximum rate of 15%, which may be well below the tax rate on withdrawals from a retirement plan in the future. 

As an hourly, fee-only advisor, GA Bishop and Associates, LLC is positioned to provide you with unbiased advice when selecting and evaluating retirement plans and providers.  We can help you analyze the various types of retirement plans and select the best one for your specific situation.  After you select the best type of plan, we can then help you find a low-cost plan provider, with the appropriate selection of investment options. 

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Investment Options – Review and Recommendations

Once a Retirement Plan is in place, you must determine what investments you will make available to the Plan participants (you and your employees).  We can help you review the potential offerings available from the Plan provider and determine if there is an appropriate level of outstanding choices available to you.  What is our definition of outstanding choices in a Retirement Plan?  The Plan should offer:

·        Low cost mutual funds (index funds especially must be very low cost),

·        Funds that consistently outperform their peers (for actively-managed funds),

·        A selection of funds from various asset classes, including large-company stocks, small-company stocks, international stocks, emerging markets stocks, investment-grade bonds, international bonds, inflation-indexed bonds, money market or stable value, and REITs,

·        A minimum number of funds to cover these criteria, in order to avoid confusion for the participants. 

If the above criteria cannot be met by your Plan provider, then you probably have the wrong provider. 

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Sample Portfolios for Retirement Plans

Once the Plan is in place and implemented, how do your employees know which Plan funds they should invest in?  Do you, as the plan sponsor and a fiduciary, have a legal duty at least to give your employees the information they need to make wise investment decisions?  Perhaps you do, perhaps you don’t, but expect this to be tested in a court of law as baby boomer approach retirement age and find that their defined contribution retirement plan is insufficient to support their desired lifestyle in retirement.  Whether or not you have a legal duty, many of you may feel that you have a moral duty to help your employees make sound decisions with their retirement savings, since defined benefit plans (managed by a professional rather than by individual employees) are much less popular than in the past. 

GA Bishop and Associates offers a solution for providing this help to your employees.  For a one-time fee of $600 if we selected the funds for the Plan, or $1,000 if we did not, we will develop eight different sample portfolios of mutual fund selections from your Retirement Plan, each targeted to a different investor style, as follows:

Actively Managed Funds	Index Funds
·        Conservative ·        Balanced ·        Equity-Tilted Balanced ·        Equity	·        Conservative ·        Balanced ·        Equity-Tilted Balanced ·        Equity

For each portfolio, we will provide a percentage of the Plan value that should be invested in each asset class, with suggested funds for a given asset class.  We will also provide a discussion of the risks associated with the particular sample portfolio and a description of the type of investor who may prefer that portfolio.  This helps the Plan participant make wise asset allocation choices for their particular situation.  But, over time, how does the participant know when to make changes to his or her allocation?  For that we provide the Tactical Asset Allocation Subscriptions Service. 

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Tactical Asset Allocation Subscription Service for Retirement Plans

For the price of $500 per quarter, we provide a quarterly update of each of the eight sample portfolios, as well as a newsletter discussing the overall economic and investment environment.  Via the newsletter, we will provide the Plan participants with the following:

·        Any recommended changes to the allocation percentages of different asset classes and individual funds.  While our initial recommendations are designed to be effective over a long-term timeframe, we do adjust our allocations when we see an asset class significantly under-valued or over-valued.  This process, in use for the last ten years, has demonstrated the ability to gain an additional 1% to 2% in return on a yearly basis and more importantly, to reduce the volatility of yearly returns, which is critical for employees approaching retirement age.  

·        Comments of significance on any funds included in the sample portfolios.  For instance, if a fund manager is replaced by someone who changes the investment policy for the fund. 

·        Specific comments on reasons for any changes recommended, so the Plan participants can understand why the change is recommended.  

·        Updated performance of the sample portfolios against an appropriate benchmark for each sample portfolio, to demonstrate the power of this approach

Not only will this service help your employees make smarter investment decisions in their 401k, it may lead to increased contributions and may help you avoid liability for poor employee investment decisions under ERISA. 

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Financial Investing Profile Session

This is a great way to help individual employees determine which sample portfolio is right for them.  At a cost of $200 per person, we will conduct a one-on-one 30 minute on-site session with an individual employee to identify their particular approach to dealing with money and risk.  This allows us to match the individual with the appropriate sample portfolio that best balances the need for an adequate investment return against their feelings and attitudes about money.  The goal of the session is to help the employee better understand his or her feelings about money and risk so they can select an appropriate asset allocation that gives them the best chance at meeting their long-term retirement needs, while also allowing them the peace of mind that their investment choices are consistent with their beliefs about money.  The Financial Investing Profile Session includes:

·        Identification of the employee’s Money Personality.  This is accomplished by having the employee complete a profile questionnaire, with the answers tabulated and compared to the responses of thousands of other individuals to the same questions. 

·        Report outlining employee’s:

o       Financial Traits - feelings and attitudes about money

o       Money Management Style

o       Money Action Plan – steps to take to make the most of his or her financial traits

·        Identification of sample portfolio that best matches employee’s age and Financial Personality

·        Projection of hypothetical value of 401(k) at age 65 (best case, worst case, most likely as projected using Monte Carlo analysis), and safe monthly withdrawal amount

Benefits to the employee include:

·        More appropriate asset allocation through a portfolio specifically matched to their time in life and their approach to money

·        Greater peace of mind

·        Greater likelihood of ability to act appropriately during investment ups and downs

·        Perhaps an eye-opening experience of seeing how little can be withdrawn safely from a 401(k) balance at age 65 in order to minimize the likelihood of running out of money prior to death

·        Understanding the wide range of values their 401(k) account can be at age 65, depending on the variability of investment returns and inflation over time

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Financial Seminars for Employees

We will come on-site and provide a one hour seminar on an appropriate financial topic designed to increase your employees’ general financial knowledge, and specifically increase the likelihood that they will have greater success investing in the 401(k) Plan.  Seminars can be scheduled at the frequency you desire, but we do not recommend a frequency greater than quarterly.  Some sample topics of individual seminars include:

·        Investing in your Retirement Plan

o       Explain the sample portfolios

o       Explain the benefits of investing for the long-term

o       Discuss risk, including risk of return, inflation, interest rates, etc.

o       Discuss impact of interest rates on the returns of bond funds

·        Overview of saving for retirement

o       Employer’s Retirement Plan(s)

o       IRA

o       Roth IRA

o       Annuities and Insurance

·        Basic investment concepts

o       Benefits of diversification

o       Benefits of asset allocation

o       Risk versus return

o       Impact of portfolio rebalancing over time

o       Difficulty in beating the indexes over time

·        Dissecting a mutual fund

o       How to determine the success of a mutual fund

o       Key points to watch for

o       Impact of loads and expenses

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