Sep 10
29

Making Retirement Last

Making Retirement Savings Last

Insurers and plan sponsors want the government to make it easier to offer annuities in 401(k) plans.

September 28, 2010

With companies continuing to shift away from pensions towards 401(k)s, many CFOs no longer have to worry about a long stream of future obligations draining their corporate coffers. They may, however, find themselves with a new worry: retired employees draining their own coffers.

Among the first waves of 401(k) holders retiring, most are taking the lump sum of their savings and putting it into IRAs. That’s good news in that they’re still saving, says Betsy Dill, senior partner at Mercer. The bad news, though, is that “there’s a high probability they could outlive whatever money they’ve accumulated,” since “there’s not a good awareness of how to take that lump sum and create an income stream out of it.”

However much companies might want to help, though, the Obama administration’s suggestion last January that annuities should be an option within 401(k) plans struck fear in the hearts of some CFOs. Right now, only about 2% of employers offer such an option among investment choices, according to Hewitt data, in large part because the rest are daunted by the liability that seems to accompany it.

Annuities, in their basic form, offer a steady and guaranteed paycheck during retirement years in exchange for a lump-sum of money up front. The problem that plan sponsors may face in offering annuities is in vetting the insurance companies that sell them. The big question: if an insurance company goes under 20 or 30 years after the investment is made, is a plan sponsor liable for continuing the payments?

A recent joint hearing by the Labor and Treasury departments on the topic — broadly known as “lifetime income” — should help plan sponsors breathe easier. After gathering input from various entities in the retirement industry, including insurance companies, 401(k) plan providers like Fidelity and Vanguard, consultants, and a group representing plan sponsors, “it is clear that the government is not going to mandate” the inclusion of annuities in 401(k) plans, says Alan Vorchheimer, a principal in Buck Consultants’s retirement practice.

Vorchheimer believes the government is not even likely to mandate some suggested educational illustrations, such as what a person’s savings would look like as a stream of annuitized payments. Rather, he and others expect the DoL to make things easier for companies that offer 401(k)s.

“For any CFOs considering a solution [to how their employees draw down retirement savings], there’s the potential for new rules that will make it easier,” says Alison Borland, retirement outsourcing strategy leader for Hewitt. Those rules could include a safe harbor around annuity products that would clearly delineate that plan sponsors are not liable for any failures on an insurance company’s part to pay out.

Currently, the most involved a typical company will get in helping employees tap into retirement savings postemployment is to point them toward a number of rollover options, including IRAs and annuities. Dill says she sees more plan sponsors getting interested in “creating a menu of spend-down options,” possibly including basic annuities, more-complex products like an annuity wrap based on a target-date fund, or structured payouts from a target-date fund designed to cover the lifetime of a retiree.

The main benefit of having an annuity offered within a plan is that companies with larger numbers of employees could potentially negotiate for lower fees, notes Borland. The approach would also make it easier for employees to purchase annuity assets over time rather than buying all at once.

However, consultants say that even if the government makes it easier for companies to offer annuities, there isn’t likely to be a stampede of employers or employees to them. “Employees are not asking for it at this point,” says Vorchheimer, in part because the financial crisis has squelched trust in the big insurance companies that offer annuity products.

Posted in Uncategorized by John Burke. No Comments

Sep 10
1

B2B CFO NAMED IN PRESTIGIOUS INC. 5000 LIST

B2B CFO NAMED IN PRESTIGIOUS INC. 5000 LIST

184% Growth Earns B2B CFO Spot in the 2010 List of Fastest
Growing Companies in America

Phoenix, Ariz. August 24, 2010 – B2B CFO, nation’s largest
provider of CFO services to small businesses, has been named to the
prestigious Inc. 5000 list of fastest growing companies in America.

Now in its 29th year, Inc. Magazine’s annual ranking judges US-based
and privately held companies by their revenue growth. This year’s
list was ranked on the percentage in revenue increase from
2006-2009. B2B CFO’s growth earned 84th place in its industry.

“There are approximately 27 million small businesses in the U.S.
today,” said Jerry L. Mills, founder and chief executive officer of
B2B CFO, “It is a huge honor to be among the fastest growing and the
most successful businesses in the country. Our firm has experienced
tremendous growth over the past few years and we are on track to
continue expanding. I am especially grateful to all of the firm’s
dedicated Partners who continue to advocate our services around the
nation.”

In a personalized letter congratulating B2B CFO on this
accomplishment, Jane Berenston, editor-in-chief of Inc. Magazine’s
wrote “Congratulations: your company, B2B CFO, has made the 2010
list of the fastest growing private companies in America. This
achievement puts you in rarefied company, especially if you consider
that over 27 million businesses are registered in the USA. The elite
group you’ve now joined has, over the years, included companies such
as Microsoft, Timberland, Visa, Intuit, Jamba Juice, Oracle, and
Zappos.com. I look forward to congratulating you in person in
Washington, D.C.”

B2B CFO’s growth is reflected in numerous awards this year. The
company was also recently named in ACE Corporate Growth Awards,
which recognized the most successful and fastest growing companies
in Arizona.
In August 2010, B2B CFO has grown to 170 Partners across 39 states,
representing 5,000 years of cumulative experience. Each Partner is a
seasoned financial executive who serves as CFO to growing businesses
on as-needed basis. Approximately 80% of the Partners have a
background that includes senior executive positions at the Big Four,
and all of the Partners have held high level executive finance
positions in various industries in corporate America. Together, B2B
CFO Partners work with more than 500 businesses in the nation with
combined annual sales of more than $3 Billion.

Jerry L. Mills and many of the B2B CFO Partners regularly dedicate
time to educate business owners on financial matters. Mills is a
frequent speaker and contributor and has been featured on many
national media networks including FOX Business, Fortune Small
Business, Smart Money and many others. Mills is also the author of
The Danger Zone – Lost in the Growth Transition, and Avoiding The
Danger Zone – Business Illusions, both business non-fiction books
that help entrepreneurs understand and build a strong financial
strategy.

“We look forward to participating in the Inc. 500|5000 conference in
Washington, DC this fall,” added Mills. “Along with my colleagues, I
look forward to the October 2nd awards ceremony and to meeting the
entrepreneurs that created the other 5000 fastest growing companies
in America.”

About Inc. Magazine

Founded in 1979 and acquired in 2005 by Mansueto Ventures LLC, Inc.
is the only major business magazine dedicated exclusively to owners
and managers of growing private companies that delivers real
solutions for todays innovative company builders. Inc. provides
hands-on tools and market-tested strategies for managing people,
finances, sales, marketing, and technology.

Inc. Magazine’s 29th annual Inc. 5000 ranking of the fastest-growing
private companies in the country is available online at
www.inc.com/inc5000/list

About B2B CFO

Headquartered in Phoenix, Ariz., the firm was founded in 1987 by
Jerry L. Mills. B2B CFO is the nation’s largest CFO firm serving
entrepreneurial, growth and mid-market companies with revenue under
$75 million. The firm’s partners have an average of 25 years of
experience and each individual partner is a senior level executive
with a broad range of expertise. Please visit online at
http://www.b2bcfo.com/

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Jul 10
7

About Tempe

From Wikipedia

Tempe is a city in Maricopa County, Arizona, USA, with a 2008 population of 175,523.[1] The city is named after the Vale of Tempe in Greece. Tempe is located in the East Valley section of the Phoenix Metropolitan Area; it is bordered by Phoenix and Guadalupe on the west, Scottsdale on the north, Chandler on the south, and Mesa on the east. Tempe is the location of US Airways Group’s corporate headquarters, and of Arizona State University’s oldest and largest “Tempe” campus