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Tailored Member Retirement Plan Now Available through ALTA®

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March/April 1998 - Volume 77, Number 2

The plans stem from nationally accomplished providers and are serviced by a network of over 165 retirement specialists throughout the country. Part of the cost reduction is due to the volume discounts...

As a business owner, growing your business and ensuring maximum returns on your investments are of prime concern. Value is top of mind and the bottom line is your measure of success. ALTA® has always sought to provide programs and services that will assist you in your business. It’s in this spirit that we proudly offer a retirement member benefit structured to help your business grow and help you secure your own financial future.

The ALTA®-endorsed plan with American Buying Retirement Services (ABRS) features 401(k), profit sharing and executive retirement plans; collectively branded as the "Prime Years" program. The plans stem from nationally accomplished providers and are serviced by a network of over 165 retirement specialists throughout the country. ABRS’ specialists have a focus on life insurance, financial planning and retirement planning. Most are either CLU, ChFC, CFP and are distinguished for both accomplishments and work ethics.

Reduced Fees

The start-up and administrative fees are especially important considerations for smaller companies. With other retirement programs, typical start-up costs for companies with over 15 employees might be $1,000 to $5,000. Annual fixed administrative costs can run from $1,000-$3,000 and annual per-participant charges can range from $25 to $40. The American Buying plans, however, charge no start-up, no administrative and no per-participant fees.

Furthermore, for a company with 50 participants, these reduced fees can save your company from $105,500 to $133,000 over 25 years. Asset management fees have also been reduced by 20 percent to 33 percent per year. This means increased yields, because of lower costs, for each participant. For larger cases (over $1M in assets) pricing is even more aggressive.

Part of the cost reduction is due to the volume discounts that ABRS negotiated with the insurance companies that administer the plans.

Superior 401(k) Plans

ALTA® offers members a choice of 401(k) plans provided by two highly rated industry leaders. Both provide quality program education and plan member services.

Each one provides some unique features. One of them, for example, offers 20+ investment options that include both institutional managers and mutual funds. Your choices include an impressive collection of funds with names like Janus, Delaware and Fidelity. The lineup of options also provides for the diversity requirement of IRS section 404 (c) for employee investment direction. And, if your employees want a no-risk investment option, they also offer a guaranteed account option which is backed by $26.1 billion in fixed maturities.

The other provider offers participants a choice of six well-known investment choices: AEtna, Alger, Fidelity, Janus, Scudder, and Twentieth Century. This provider specializes in high-quality employee education and communications before, during and after sign-up. Three plans and pricing opportunities are available depending upon company asset size: MAPV - for plans up to one million in assets; Jumbo MAPV and Adapter - for assets in excess of one million.

Qualified Profit Sharing Benefits

New government regulations have come to the rescue of the small business. Traditional employer contributions of a profit sharing plan allocated the same percentage of salary to every employee. No particular employee could be favored because of salary level, age, length of service, or contribution to the profits of the business. Recent changes in federal law now allow business owners to contribute based on needs rather than a single fixed percentage.

One particular plan is called "New Comparability." It offers small to medium-size companies a great deal of flexibility. For the first time, employees may be divided into classifications and each class may receive an allocation different from the others. Employees can be grouped according to salary, length of service, job classification or a combination of several. The possibilities are extensive...and administration of your plan is free! Also, all installation charges and all administrative charges have been waived because of your ALTA® membership.

Executive Retirement Plans

Recent legislation limiting covered compensation for higher-paid executives in traditional qualified plans has created a climate of shrinking options. Compensation caps for 1998 are below what they were in 1993, leaving highly compensated executives with a form of reverse discrimination when it comes to building retirement income. ABRS is able to provide several solutions.

A value-added non-qualified executive plan can be designed with a range of options while allowing your company to select who will participate, set the vesting requirements and decide how the plan will be designed and funded. There are three main categories: non-qualified deferred compensation plans; executive bonus plans; and split dollar plans. Each design offers advantages and disadvantages which an ABRS retirement specialist can help you explore.

Whether you’re an executive of a small business or medium-size company, ABRS’ executive compensation plans can help ALTA® members avoid the high-income anomalies with a substantial cost-savings.

Most association members who are participating in the program say the plans have a number of appealing aspects: low-cost, quality providers, and a variety of plan options and investment choices. If you would like additional information, call the ABRS Member Benefit Desk at (800) 495-4050.

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Washington, D.C. 20036-5828
P. 202.296.3671 F. 202.223.5843
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