Cash Balance plan

Dan Kravitz Discusses Growth in Cash Balance Market

Dan Kravitz, head of Kravitz, ​reviews data from the 2018 Kravitz Cash Balance Research Report in ​a recent Index Fund Advisors feature. Employer contributions to these specialized plans increased by 30% year-over-year, while total Cash Balance assets exceeded $1 trillion for the second year straight. “From the data we monitor, traditional pension plans are definitely in a state of decline—​the costs of maintaining these as primary retirement savings programs have just gotten too expensive for most companies to afford,” says Kravitz.​ He also discusses how these plans enable savers to contribute over-and-above traditional 401(k) limits, making them attractive to business owners and their employees alike.


Cash Balance Coach® Certification Program Celebrates 10 Years of Success

Program’s history coincides with exponential growth in Cash Balance plans

Los Angeles, CA – Kravitz, Inc., an Ascensus company, is proud to announce the 10-year anniversary of Cash Balance Coach®, the nation’s first training and certification program for financial advisers and retirement plan professionals seeking to enter the fast-growing Cash Balance plan market.

The growth and success of the Cash Balance Coach program—which boasts 1,850 alumni—has coincided with a dramatic rise in the number of Cash Balance plans adopted nationwide, from just over 3,500 active plans in 2008 when Cash Balance Coach first launched, to almost 23,000 active Cash Balance plans today.

Also known as “hybrid” plans, Cash Balance plans combine the high contribution limits of traditional defined benefit plans with the flexibility and portability of a 401(k). Until the passage of the 2006 Pension Protection Act (PPA), the plans were largely unknown, limited in use, and needed legal clarification. The PPA and subsequent IRS regulations issued in 2010 and 2014 made Cash Balance plans simpler and easier for employers to adopt.

“We created Cash Balance Coach training and the Cash Balance Consultant (CBC) designation since we were spending a lot of time answering questions from financial advisers—helping them understand the Cash Balance concept and explaining how these plans are different from both 401(k) and traditional defined benefit plans,” said Dan Kravitz, head of Kravitz. “We were also speaking frequently at industry events and adviser meetings, and there was no educational option to meet this obvious educational need.”

“It made sense for us to consolidate all the informal training we were doing and offer a comprehensive educational program with a designation that can be a powerful marketing differentiator,” continued Kravitz.

Cash Balance Coach is a web-based training program with four modules covering everything from “Cash Balance 101” basics to an overview of compliance testing, plan design case studies, investment strategies, the impact of legislative changes, and many other topics. Each seminar is taught by a leading expert, including the top Cash Balance actuary at Kravitz, the firm’s plan design director, and leading sales consultants. An online exam follows with the opportunity to earn Kravitz’s CBC certification.

“Our goal is to empower advisers to bring all the benefits of Cash Balance plans to their clients, helping reduce the tax burden and catch up on delayed retirement savings,” Kravitz noted. “We continuously update the curriculum based on law changes, the tax environment, and other factors that impact the Cash Balance market. It has become so popular that many of our competitors have enrolled!”

Following the success of the program, Kravitz published a book on the topic, “Beyond the 401(k),” and expanded web-based training with frequent national webinars on such topics as tax reform and strategic plan terminations.

The latest live series starts October 16, with online registration at https://www.cashbalancedesign.com/cash-balance-coach/ for $199. All training is recorded for on-demand playback and is available year round as an on-demand program. Alumni also get coaching and sales support from Kravitz Sales Consultants across the nation, along with access to free plan designs and an extensive library of Cash Balance plan marketing materials.

 

About Kravitz

Since 1977, Kravitz, an Ascensus company, has delivered the latest in design, administration, and management of corporate retirement plans. The company designed its first Cash Balance plan in 1989. Headquartered in Los Angeles, the company has offices in New York, Chicago and Atlanta, with satellite offices in 11 other states. Kravitz was acquired by Ascensus, Inc. in 2017. Visit CashBalanceDesign.com.

 

About Ascensus
Ascensus is the largest independent recordkeeping services provider, third-party administrator, and government savings facilitator in the United States. The firm delivers technology and expertise to help millions of people save for what matters most—retirement, education, and healthcare. For more information about Ascensus, visit ascensus.com. View career opportunities at careers.ascensus.com.


Ascensus Enters into Agreement to Acquire PenSys

Addition of Highly Respected TPA Increases Firm’s Scale and California Presence

Dresher, PA—Ascensus—whose technology and expertise helps millions of people save for retirement, education, and healthcare—has entered into an agreement to acquire PenSys. The third-party administration (TPA) firm will immediately become part of Ascensus’ TPA Solutions division.

Based in Roseville, California, PenSys is a nationally recognized TPA that specializes in the design, implementation, and administration of defined contribution, defined benefit, and cash balance retirement plans. The firm, which also offers 3(16) fiduciary services, has established a strong reputation for providing creative plan design and high quality service.

“PenSys is one of the most highly respected TPAs in the country due to their focus on designing plans to meet clients’ unique needs and their use of technology to enhance personal service,” says Jerry Bramlett, head of TPA Solutions. “Their addition to Ascensus TPA Solutions goes a long way toward helping us build a national TPA that offers a broad set of services and resources to financial professionals, employers, and employees.”

“Since 1995, we’ve worked hard to make PenSys a partner who understands what service really means to financial professionals, CPAs, and their current and prospective clients,” states Bryan Jacobson, PenSys’ chief executive officer. “We’ll continue to offer the best possible solutions for establishing and maintaining their retirement plans as part of Ascensus.”

“PenSys is a high integrity business with excellence in plan design, actuarial consulting, and 3(16) services complemented by their open-architecture business model,” says Raghav Nandagopal, Ascensus’ executive vice president of corporate development and M&A. “This acquisition not only expands our California footprint significantly, but also adds to our capabilities to service clients nationally. We are delighted to welcome their clients and associates to the Ascensus family.”

About Ascensus

Ascensus is the largest independent recordkeeping services provider, third-party administrator, and government savings facilitator in the United States. The firm delivers technology and expertise to help millions of people save for what matters most—retirement, education, and healthcare. For more information about Ascensus, visit ascensus.com. View career opportunities at careers.ascensus.com.


Dan Kravitz Discusses Tax Advantages of Cash Balance Plans

In a recent ​Accounting Today article​, Dan Kravitz provides insight on how top-earning service professionals can utilize cash balance plans to lower their tax bills. ​The Treasury Department recently proposed new regulations that would prohibit planning techniques such as the “crack and pack” — where business owners split their firms into different entities to lower their tax bills. Kravitz said his firm, a specialist in defined-benefit plans for small businesses, is actively marketing pensions as a way for service professionals to get around the new rules.​


Dan Kravitz Discusses Strategic Plan Terminations

In a recent article published by ​PLANSPONSOR, Dan Kravitz, president of Kravitz, Inc., and Chris Pitman, an expert plan termination consultant with the firm,​ ​​​​​​define the concept of strategic plan termination—what the pros and cons are, and what an employer’s responsibilities entail under IRS and PBGC regulations. “If an employer has the right goals and follows the right process​, strategic plan terminations can be a win-win for the company and for employees,​”​ said the pair.


Dan Kravitz Explains How Cash Balance Plans Can Help Small Employers Benefit From Tax Reform

In an article​ published by Employee Benefit News, Dan​​ Kravitz, head of Kravitz, discusses how ​​cash balance plans ​can help small employers benefit from tax reform.​​ Tax reform impacts pass through entities, ​companies where income is passed through to the business owners, so ​it’s important for these workers to understand ​which deductions are available to them. “For most small business ow​ners as pass-through entities, profits are passed through to owners and taxed at individual rates rather than at corporate rates,” Kravitz says. ​


More Advisors Turn to Cash Balance Plans

recent article​ published by FinancialPlanning discusses ​​why advisors have been turning to cash balance plans, featuring data from the Kravitz 2017 Cash Balance Research Report​. ​Cash balance plans allow ​​workers more flexibility with their contributions, while decreasing their taxes. ​According to the Kravitz report, ​cash balance plans increased by 1,035% between 2001 and 2014 to 15,178 plans with assets of more than $1 trillion​.


Dan Kravitz Discusses the Growth of Cash Balance Plans

Dan Kravitz, head of Kravitz, Inc.,​ discussed the grow​​th of Cash Balance plans in an article ​published by Employee Benefit News. ​Kravitz ​​​noted that cash balance plans grew by 17% in 2015. ​“The investment risk is borne by the employer but they are not subject to 401(k) limits,” he adds. “So owners, particularly older owners, can contribute a lot more to a cash balance plan than they can contribute to a 401(k) profit-sharing plan.”​​


Cash Balance Retirement Plans Surge 17%, Plan Assets Rise to $1.1T

Tax advantages and the need to catch up on delayed retirement savings make Cash Balance the fastest growing sector of the retirement plan market 

Los Angeles, CA – Kravitz, Inc., an Ascensus company, today released the 2017 National Cash Balance Research Report, showing a 17% net increase in the number of new Cash Balance retirement plans compared with a 3% increase in new 401(k) plans. This marks more than a decade of double-digit annual growth in the Cash Balance plan market, concurrent with the decline of traditional defined benefit plans. Cash Balance plans now make up 34% of all defined benefit plans, up from just 2.9% in 2001.

There were 17,812 Cash Balance plans active in 2015, the most recent year for which complete IRS reporting data is available. This 17% year-over-year increase surpassed industry projections and significantly outpaced the 401(k) market. Plan sponsors made a record-setting $29.3 billion in Cash Balance contributions in 2015, with total plan assets rising to $1.1 trillion.

“Cash Balance plans offer considerable advantages for employers, including the opportunity to double or triple tax-deferred retirement savings,” said Dan Kravitz, head of Kravitz. “Cash Balance plans are also very appealing to employees, and can help companies attract top talent in a tight labor market.”

Also known as “hybrid” plans, Cash Balance plans combine the high contribution limits of traditional defined benefit plans with the flexibility and portability of a 401(k).

Key findings from the 2017 National Cash Balance Research Report:

  • Increasing diversity of companies adopting Cash Balance plans: while medical/dental groups and law firms still make up close to half the market, Cash Balance plans are becoming increasingly popular across the business world, from the technology sector to retail and manufacturing.
  • Small business continues driving Cash Balance growth: 92% of Cash Balance Plans are in place at firms with fewer than 100 employees.
  • Companies more than double contributions to employee retirement savings when adding a Cash Balance plan:the average employer contribution to staff retirement accounts is 6.6% of pay in companies with both Cash Balance and 401(k) plans, versus 3.7% of pay in firms with 401(k) alone.
  • IRS regulations allowing broader Cash Balance investment options have accelerated plan growth: the ‘Actual Rate of Return’ option and other new investment choices approved in the 2010 and 2014 Cash Balance regulations made plans more flexible for employers and removed certain funding issues. The number of large plans using Actual Rate of Return has increased almost 20%.

These and other highlights of the 2017 National Cash Balance Research Report will be discussed in an upcoming Cash Balance Outlook 2017 webcast led by Dan Kravitz on Tuesday, September 12 at 10 a.m. Pacific. Registration is free and open to anyone interested in learning more about Cash Balance Plans.

Download the 2017 National Cash Balance Research Report here.

Register for the Cash Balance Outlook 2017 webinar here.

For more information, call Dan Kravitz at 818-379-6162 and visit www.CashBalanceDesign.com.

 

About Kravitz
Since 1977, Kravitz, an Ascensus company, has delivered the latest in design, administration, and management of corporate retirement plans. The company designed its first Cash Balance plan in 1989. Today Kravitz, Inc. administers over 1,300 plans, including more than 800 Cash Balance plans, helping over 150,000 people retire successfully. Headquartered in Los Angeles, the company has offices in New York, Chicago and Atlanta, with satellite offices in 11 other states. Kravitz was acquired by Ascensus, Inc. in 2017. Visit CashBalanceDesign.com

 

About Ascensus
Ascensus helps more than 7 million Americans save for the future—retirement, college, and healthcare—through technology-enabled solutions. With more than 35 years of experience, the firm offers tailored solutions that meet the needs of asset managers, banks, credit unions, state governments, financial professionals, employers, and individuals. Ascensus supports approximately 50,000 retirement plans, more than 4 million 529 college savings accounts, and a growing number of ABLE savings accounts. It also administers more than 1.5 million IRAs and health savings accounts. As of June 30, 2017, Ascensus had over $155 billion in total assets under administration. For more information about Ascensus, visit ascensus.com.


Ascensus Announces Completion of Kravitz, Inc. Acquisition

Firm Advances Growth Strategy While Enhancing Cash Balance Capabilities

 

Dresher, PA—Ascensus, a technology and service provider that helps more than 7 million Americans save for the future, announced that it has completed the acquisition of Kravitz, Inc. that was previously announced on June 6, 2017. As a result of the acquisition, Ascensus will serve approximately 50,000 retirement plans.

Kravitz, Inc. is a retirement administration firm and Cash Balance specialist focused on bringing its clients the latest in the design, administration, and management of corporate retirement plans. As part of the deal, Ascensus also acquired Kravitz Back Office Solutions, which delivers private-label actuarial services to third-party administrators across the country to help them grow and succeed with Cash Balance plans. Not included in the deal were Kravitz Investment Services, Inc., a registered investment advisor that supports Cash Balance investments, and the Payden/Kravitz Cash Balance Plan Fund, a mutual fund designed exclusively for Cash Balance retirement plans.

“The addition of Kravitz to the Ascensus family of companies represents a significant step for our growth strategy,” says Raghav Nandagopal, Ascensus’ executive vice president of corporate development and M&A. “We are aggressively pursuing acquisition opportunities not only in our core markets of retirement and college savings solutions, but also within natural adjacencies like health solutions, benefits administration, and other areas. This will help us to meet our goal of closing at least 8 to 10 new acquisitions per year for the foreseeable future.”

“Over the years, Kravitz has worked hard to build a reputation that has made their name synonymous with Cash Balance expertise,” states Shannon Kelly, Ascensus’ president of retirement. “Bringing this expertise into the fold—along with Kravitz’s dedicated team of associates—allows Ascensus to broaden our retirement offerings so that we can help even more Americans save for the future.”

 

About Ascensus

Ascensus helps more than 7 million Americans save for the future—retirement, college, and healthcare—through technology and service solutions. With more than 35 years of experience, the firm offers tailored solutions that meet the needs of banks, credit unions, states, governments, financial professionals, employers, and individuals. Ascensus supports over 50,000 retirement plans, more than 4 million 529 college savings accounts, and a growing number of ABLE savings accounts. It also administers more than 1.5 million IRAs and health savings accounts. For more information about Ascensus, visit www.ascensus.com.

View career opportunities at careers.ascensus.com or on LinkedIn at linkedin.com/company/ascensus. For the latest company news, follow @AscensusInc on Twitter.