April 2 8am - free erisa workshop

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April 2 8am - free erisa workshop

  1. 1. ADVANCED PROSPECTING  WITH THE FORM 5500 Brought to you by:
  2. 2. What is FreeERISA.com
  3. 3. Signing Up
  4. 4. The Form 5500 The 5500 is the annual DOL disclosure Form  required for all ERISA‐qualified benefit plans Filed by •Private Employer Groups •Unions and for‐profit Associations Filed for •401(k) Plans •Health •Life •Dental •And many more
  5. 5. Two Distinct Sets of Filers Health • 100 + employees in the plan • About 85,000 filings per  year • All companies file the same  basic form Retirement • 2 + employees in the plan • About 700,000 filings per  year • Smaller companies can file  the “Short Form”
  6. 6. What kind of information is in the  5500? All Plans •Aggregate data on plan participants •Active, retired and separated •Name of plan administrator •Plan Types Health/Welfare Plans •Carriers, Brokers and Providers •Insurance contract information •Funding Arrangement 401(k)/Retirement Plans •Total Plan Assets •Asset/Liability statement •Detailed financial disclosures
  7. 7. Disclosure Timeline 0 2000 4000 6000 8000 10000 12000 14000 16000 18000 20000 Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec New Health/Welfare DOL Filings by Month Filings disclosed during 2013 Source: US Department of Labor
  8. 8. Know What You’re Looking At
  9. 9. The Anatomy of a 5500 The 5500 consists of the main form, a series of schedules and a set of attachments. Here’s a quick rundown of what you’ll find on the various sections Portion Data Type Specific Items of Interest Main General Renewal date, size of plan,  contact data, plan types Schedule A Insurance Names of Carriers and Brokers Schedule B Actuarial Schedule C Providers Name, compensation, and  service provided Schedule H Financials Assets, Liabilities
  10. 10. The Main Form On this portion of the form, you’ll find the following information: •Plan Participant Info •Employer Address •Name of person signing as plan administrator •Renewal Date of the plan •Plan type codes (is it health, life, dental etc…) •Plan funding arrangement
  11. 11. Timely Qualifier ‐ Renewal Date You’re more likely to get the meeting if you call 3 months prior to their plan year end than if you call 10 months early. The plan’s renewal date can be found at the top of the first page of the 5500.
  12. 12. Welfare Codes to Know: 4A = Health 4B = Life 4D = Dental 4E = Vision Retirement Codes to Know: 1? = A Defined Benefit Plan 2? = A Defined Contribution Plan 2J = 401(k) Plan
  13. 13. Identifying Self Funded Plans Fully Insured Fully Self Funded Partially Insured/ Partially Self Funded
  14. 14. Schedule A The Schedule A is filed when a plan is funded at least in part through an insurance contract. It contains information on: •A single insurance Carrier •Any Brokers who were paid commissions or fees by the carrier •The amount of commissions/fees paid •The premium collected by the carrier •The lines of coverage in the specific insurance policy •# of employee lives covered by policy Schedule A
  15. 15. Schedule ASchedule A
  16. 16. Providers who are not local to the plan may not  be able to provide the same level of  personalized service that you can. TIP
  17. 17. Schedule A
  18. 18. Math! Premiums: $23,028  Broker A Commission: $1,849 Broker B Commission: $181 $1,849+$181 = $2,030 Broker A $1,849 = 91% $2,030 Share of Premium is $20,955 Broker B $181 = 9% $2,030 Share of Premium is $2,072
  19. 19. Schedule A – Self Funding Revisited What do you mean by self funded? Partially Insured/ Partially Self Funded Codes from the Main 5500
  20. 20. Schedule A – Self Funding Revisited Benefit Boxes from Schedule A Codes from the Main 5500 Welfare Codes to Know: 4A = Health 4B = Life 4D = Dental 4E = Vision The Codes are Different!
  21. 21. Schedule A Benefit Boxes from Schedule A Most Common “Other” Types Accidental Death and Dismemberment Employee Assistance Program Business Travel Accident Long Term Care Voluntary Short Term Disability
  22. 22. Schedules SB and MB Schedule “B” is filed for all Defined Benefit plans and contains actuarial information. Schedule SB is filed for single-employer DB plans and MB is filed for multi-employer DB plans. On Schedule B, you can find: •The name of the actuary •Assets •Funding targets and status •Minimum required contributions •Statement of actuarial assumptions
  23. 23. Schedules SB and MB
  24. 24. Schedule C Schedule C is filed when a third party provider is paid $5,000 or more out of plan assets, or more than $1,000 in indirect compensation. You can use Schedule C to determine: •Total direct compensation of a provider •Indirect compensation paid to a provider from mutual funds •Names of providers who failed to provide appropriate disclosure •64 unique service codes that explain the nature of the service provided to the plan, including: •Trustee •Insurance Brokerage •Consulting •Accounting •Auditing •Administration
  25. 25. Schedule C – Health Focus
  26. 26. Schedule C – Health Focus Schedule A • Insurance Contracts • Transference of risk • Premiums collected Schedule C • Administrative Services Only  (ASO) • No assumptions of Risk • Fee for service What does it mean when a big company like Cigna is filed on Schedule A vs. Schedule C.
  27. 27. Schedule C – Retirement Focus
  28. 28. Schedule D Schedule D is filed for a plan or Direct Filing Entity (DFE) that invested in or participated in any Master Trust Investment Account (MTIAs), Common Collective Trusts (CCTs) and/or Pooled Separate Accounts. Items you’ll find on the Schedule D include: •Name of Mutual fund or other investment vehicle •Name of the sponsoring organization/DFE •Dollar value of interest in the investment vehicle
  29. 29. Schedule D
  30. 30. Schedules H and I Schedules H and I are financial disclosure schedules. Plans will file a Schedule H or a Schedule I depending on their size. Large plans (100+ participants) generally file a Schedule H. Smaller plans will generally file a Schedule I. Plans will file either one or the other, not both. Schedule H contains more information than Schedule I, but both schedules will give you: •Total Assets •Income and Expense Statement •Employee and Employer Contributions •Admin Expenses •Compliance questions •Participant loans
  31. 31. Schedules H and I
  32. 32. Compliance Questions
  33. 33. QUALIFYING PROSPECTS  WITH THE 5500
  34. 34. Find Your Sweet Spot What do your current clients look like? Answering this question is the key to qualifying prospects using the 5500. There are over 800,000 filings. You can identify the ones that are your best targets using: Plan Type # of Lives Geography Industry Current Provider Funding type
  35. 35. Where to Find Key Qualifiers Short Form (many small plans) 5500 w/ Sch. I (plans with < 100) 5500 w/ Sch. H (plans with > 100) Total Assets Part III, item 7 Schedule I, Part I item 1 Schedule H, Part I  item L Participants Part II, item 5(a) Main Form, Part II  items 5 and 6 Main Form, Part II  items 5 and 6 Plan Type Part IV, item 9(a) Main Form, Part II  item 8a Main Form, Part II  item 8a Providers N/A Schedule A ‐ Insurance Schedule C ‐ All Others Schedule A ‐ Insurance Schedule C ‐ All Others Location Part II, item 2(a) Main Form, Part II 2(a) Main Form, Part II 2(a) Industry Type Part II, item 2(d) Main Form, Part II 2(d) Main Form, Part II 2(d)
  36. 36. WHERE TO FIND 5500s
  37. 37. Free 5500 Access www.freeERISA.com •Search by company name Premium 5500 Access www.judydiamond.com •Search by: – Plan Type – Number of Participants – Brokers – Rate of Return – Participation Rate – Asset Amount 5500 Resources
  38. 38. ~Eric Ryles Managing Director FreeERISA.com Judy Diamond Associates Thank you

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