CFO on 401(k) Strategy: Match, Vesting & Recruiting

[0:00] JD: I'm not gonna wait for jd. [0:01] Tom: I'm just gonna play the intro. [0:03] Justin: How stressed do you think he is right now? [0:07] Mark: What's up, ladies and gentlemen? [0:11] Chad: Don't adjust your screen. Do not adjust your audio. [0:14] Mark: Oh, I knew this was gonna happen. [0:17] JD: Sultry voice. Well, it's so delicious. [0:21] Chad: Well played, my friend. [0:25] JD: So you're sitting in for JD. JD's not coming, is he? [0:30] Chad: I am the host of the Retired. Wow. [0:34] Mark: Fucking text JD and asked him. I said, you're gonna have someone host, aren't you? And Rick was one of my guesses, too. The OG sponsor of the robe. But it's only fitting. It's only fitting. [0:49] JD: All right, let me play us. [1:22] Chad: All right, ladies and gentlemen, boys and girls, welcome to our episode of Retireaholics Today. Now, Justin, I think JD usually starts the show with a little song or musical interlude. [1:32] Justin: Get on it, buddy. We got to hear it. [1:34] Chad: Well, this. [1:35] Tom: This. [1:35] Chad: Could you prepare? This also might explain why I'm sitting here and JD's not. So I'm going to. I'm going to do my best here, but a little ode to baseball. Take me out to the ball game. Take me out to the crowd. JD thought his Giants would be lame. I knew my Dodgers would make me proud. So I bet, bet, bet on the home team. JD end up losing his show. So it's one, two, three strikes around. Now it's on with my show. [2:12] Mark: Wait, wait, wait. Mr. Unser, if I will, if I may. [2:16] Chad: Dodgers beer cup, too. [2:18] Tom: They. This. [2:19] Mark: This was a. You won this bet? Like, this was a bet between you guys, or was this a JD request? No. [2:26] Chad: So the quick back story is right as the San Francisco Giants LA Dodgers series was getting underway, he was talking a lot of trash. I was talking a lot of trash. And I was like, all right. I said, loser has to let the other guy host his show. [2:40] Mark: Oh, man. So you had some skin in the game. Okay. [2:44] Chad: If the Giants had won, he would have hosted my podcast. [2:48] Mark: You're lucky, dude. I was gonna say that. [2:51] JD: Dick. [2:53] Mark: That. That. [2:54] Chad: Not so. That. Not so great call on third strikes. [2:57] JD: I think that now his text messages that night make a little more sense. He was so mad. [3:06] Chad: So. [3:07] JD: Well, we're happy to have you, Rick. [3:09] Chad: Well, hey, I'm happy to be here. I'm gonna, you know, I'm gonna preserve as much as I can of the integrity of the show. So. So, Justin, you want to introduce our guest? [3:18] JD: Sure. [3:19] Justin: Well, so Chief Financial Officer Tom graduated from Miami University with a degree in zoology. And although I can either confirm nor deny the following, there's speculation that whilst on safari in Zimbabwe, he brought back a monkey named Gucci, whom he later [3:34] Chad: sold on the monkey black market. [3:37] Justin: After years of studying the migration pattern of the dung beetle and witnessing the murder of Mufasa, he returned to his alma mater to earn his mba. He went on to have a handful of career stints in banking and Treasury. His resume consists of multiple organizations, big and small, where he has served as many three letter acronyms that I can't mention due to the rogue guy, acronym Nazi over there. Also, over his career, and notably not on his resume or LinkedIn profile, he has served as retirement committees, served on the retirement committees for multiple 401k and 403bp 4.3b plans. I have no clue what his name is or who he's from or anything. So tell us about yourself then. [4:15] Mark: How did you know his. LinkedIn said, JD that was. [4:20] Tom: That was pretty thorough introduction for not knowing who I am, and it was all true. I will never disclose anything that happened on those safaris. [4:32] JD: What happens in a safari? [4:33] Justin: How do you go from zoology to finance? Where's that? [4:39] Mark: Oh, is that a real. [4:41] Justin: That's what JD said. Well, go ahead. [4:44] Chad: Sorry. [4:44] Tom: No, it's. You know, sometimes it's good to have a very disciplined scientific undergrad and then do something easy like finance, You know, go into med school or, you know, take the easy way out. [5:06] JD: Glad you. Glad you went the direction you did. [5:08] Tom: Yeah. Thank you. [5:09] Chad: All right, Mark, do you want to explain the rules of our game tonight? I think so. [5:17] Mark: Which one? [5:18] Chad: Ackerson. [5:19] Mark: There you go. Okay, we're playing Ackerson today. It starts now, guys. Right this minute. Okay, Tom. Cfo. [5:27] Chad: Oh, already? [5:31] JD: All right. [5:32] Mark: Chief Financial Officer Tom. We play a game called acrostand. If you say any acronyms or initialisms, you must drink from your pedals. [5:43] Chad: You drink. [5:43] Mark: I have really old warm vodka in here from weeks ago. [5:47] JD: That looked rough. [5:48] Mark: Yeah, that's about it for that Cam. That's all I got. [5:54] JD: All right. [5:55] Chad: Is there any. And I was. Any other housekeeping? [5:59] Justin: I always forget [6:02] JD: Mr. Desenso that's already in here chatting to just the host and panelists. [6:05] Mark: Oh, yeah. [6:07] JD: We expect so much more from you, [6:11] Mark: chap. Our champion chat bar champion. So, Tom, pay attention to the chat bar if you can. I know it's hard to multitask, but if you can look at what people are saying and doing. And we vote at the end, you pick somebody from the chat bar, put your vote in, and then they get put into the finalist position and we vote on them. And whoever wins gets to pick a mug with one of our faces on it. [6:37] Chad: All right, do they get pick a mug with my face on it since I'm playing the role of JD today, or no. [6:41] Mark: Yeah, you know, that might be some of those. Limited edition. [6:45] JD: Yeah, that might be the limited edition. [6:47] Chad: Limited edition. [6:48] JD: There you go. All right. Could be. [6:50] Chad: All right, well, I'm going to kick the questions off here. So, Tom, we got a bunch of 401k people on the line. Is your name really Tom? [7:00] Tom: It is really Tom. Yes. [7:01] Justin: Okay. [7:02] JD: Okay. [7:03] Tom: Claimed S9 and Tom is not an acronym. [7:09] Chad: Okay, so Tom, you got a bunch of 401k people watching us right now. And all, literally all we do all day is think about 401k plans. Just ask Chad the nerd sitting. Sitting next to me. So you as a chief financial officer, I know there's probably Maybe one or two other things you think about other than 401k plans. Tell me a little bit more about your world right now and things you're trying to solve for just in the business in general. [7:36] Tom: You mean aside from 401k plans that I think about every day? [7:40] Chad: I mean, if that's really what's top of mind, then, hey, you know, I'm sure everybody here would love to hear. [7:45] Tom: So I was just trying to fit [7:46] JD: in, you know, it's not hard. You just drink. [7:52] Tom: All right, let me start with that. I tell you, it is. It has been crazy days these last couple of years. I mean, it's. You've got working from home, you've got supply chain issues, you've got, you know, all different kinds of things that we're thinking about. How do you keep people productive, remote. And then on top of that, how do I make sure that I meet my fiduciary responsibility on my 401k? [8:22] Chad: So that's the one that really keeps you up at night. [8:25] Tom: And that's one that keeps me up at night. You know, I think it's been. It's been a. Like nothing I've seen. Hold on, let me decline. [8:34] JD: Oh, yeah, you're using phone tonight. [8:36] Chad: I'm fix my hair. I don't have a ton of gel. And I guess it's just. I guess I'm just having a bad hair day, so. Sorry about that. [8:41] Tom: Well, it looks good. [8:43] Justin: Thank you. [8:45] Tom: Yeah, you know, just got out of a board meeting today, you know, and it's. It's budget season, so we're working through budgets. But really, what. Most of my days right now are spent, you know, on the boring of how do I get my stuff off these ships out in Long Beach Harbor? Like nothing I've ever seen, that's for sure. [9:04] Chad: The struggle is real. [9:05] Mark: Yeah. [9:06] Tom: I'm just hoping that, that that's not where the alcohol comes from. [9:10] Chad: I think that that's where Marks came from. It's been sitting on the container chip for a little while. 100%. I know JD sent out some stuff over LinkedIn and I had a very similar question, which is somebody that sits in your chair, like, how do you view a 401k plan? Is it like payroll tax? Like you gotta have it, you gotta pay, you gotta put a match in. Or is there really some benefit to offering a 401k plan that helps you recruit and retain employees, grow your business, or provide some grander strategic value in your mind? [9:42] Tom: Well, I'll tell you, in the different companies that I've been with, I've seen, you know, all different approaches that, you know how you handle the 401k and whether it's a strategic retention tool, whether it's just like having an extra payroll tax, it's just something you got to do. I've been with companies that match, companies that don't match. And I gotta say, like where we're at now, it's a great recruiting tool if you have a good product. The employees really appreciate that. You know, the strong investments tools that help them think about their future and think about their retirement if you can get them to enroll in it. And then really we look at our matches as being a key, not only retention tool, but quite lucrative for the employees to help them get set for the future. [10:36] JD: When you're chatting with a new employee, do you take the match contribution and show it as part of their compensation package? Good question. [10:46] Tom: Yeah, that is a good question. It depends. Last two companies I've been with, no way. Because we didn't have a match at the current company, we absolutely lay it out. So, you know, we have a 50% uncapped match on our 401k, which is fantastic. And getting to the age that I'm getting to, you know, it can be pretty lucrative when you're over 50. So. Not saying I'm over 50, but if you were, could be pretty lucrative. [11:16] Chad: I mean, you look 35, so. [11:18] Tom: Thank you. [11:21] JD: JD can't hit that catch up contribution yet either. [11:25] Chad: Chad, does he match ketchup you think? [11:28] JD: Yes. [11:28] Mark: I don't even think he puts any money in his 401k. [11:31] JD: JD doesn't. [11:32] Justin: That why he's still rich? [11:33] JD: Uses it all on airplanes. [11:38] Chad: Justin, it looks like you were trying to jump in there. [11:41] Mark: Nope. [11:45] Tom: Well, I'll try to extend out answers a little bit. So it does give us a competitive advantage. You know, it's a competitive workforce. You know, you've got, you know, it's kind of a new generation coming into the workforce that really values not only their, their personal time and their ability to contribute to the organization, but is a lot more thoughtful than I think I was at their age in terms of their future and setting themselves up for the future. [12:17] Justin: All right, we have a question for you. Go ahead. [12:20] Tom: It's just been a great talent acquisition tool. [12:24] JD: Justin, let me, let me make one last comment because and I'm curious from you, your guys perspective and Rick from yours as well with all the groups that you're consulting with, I see almost none of them showing the retirement plan as part of the compensation package. Like if they have a profit sharing plan, if they have a non elective never do I see them sitting down with participants and saying hey, we're paying you $70,000 a year but with your remaining benefits, here's your total compensation. And I don't understand why in the small space that's not done. So my guess is Tom, you're probably working for and with some larger organizations, but I just don't see it in our world. [13:02] Tom: My current organization, we have about 102 team members so we're probably on the smaller side but you know, if it's a competitive market out there. So we really want to make sure they know what we're contributing to their 401k as part of their total compensation because it, because it is so lucrative. We don't want to just overlook that as a throwaway because it's certainly not for sure. [13:28] Chad: Yeah. And Chad, where I see it is, hey, this is anonymous Chief financial officer tomorrow. And Chad, where I see it is definitely in the larger market where you've got a more robust HR team or an HR team that has like a communications person on it and they put out a total benefit statement. Oh sorry. They put out a total reward statement either annually or every other year. And usually those total reward statements are going to include match some, some of them depending upon how they do it, they'll actually put a little box on it that says here's the benefits you're missing out on. [14:05] JD: So why, what's that? Why, why Rick? Why just the larger market? Why people gonna smile? How much time is your so easy to quantify? That's B.S. [14:21] Mark: oh that counts. [14:22] Chad: Human resource yeah, [14:28] Justin: Tom, I wanted to ask a question that Greg threw out in the chat a minute ago. He said, does your company offer a high deductible health care plan and. [14:34] Chad: And. [14:35] Justin: Or also off our health savings account. [14:37] Tom: We do. [14:40] JD: You have a health savings account? He's trying to bait you at the health savings account. I know that Bill Psorias that did it. So. Yeah, you guys do have. [14:49] Tom: I almost said hsa. [14:52] Justin: No, you just did. [14:53] JD: Yeah, I knew when you're doing it here, when you're doing it, you're taking a drink of beer. When I'm doing it, I'm taking a drink of Maestro Dobel. [15:04] Chad: It looks like you were flexing there for a minute. Chad did right. [15:08] JD: I have. I have worked out for the last two days. Darn green screen. [15:15] Chad: All right. Hey, one other question. One other question. Oh, Tom, go ahead. Sorry. [15:19] Tom: No, no, I was going to say we do offer a high deductible plan. Surprisingly not a lot of people take advantage of it and not exactly sure what, you know. [15:30] JD: It. [15:31] Tom: It's another way to put money away for the future, if I understand it right, which is very confusing. You get when you're 65, you can pretty much use it for anything. [15:43] Chad: Yeah. Do you guys match on the hsa? [15:46] Tom: We don't. [15:47] JD: Man, Rick, you're going to be hammered by the end of this. [15:52] Chad: One last question on my end. So you mentioned obviously the competitive market for talent and I think, hey, we're 401k people, so we've got a hammer, the world's a nail. So the answer to recruiting more things is higher. 401k match, higher employer contribution. But there's a lot of other elements to pay and compensation, whether that be higher hourly pay, bigger cash bonuses, more vacation, whatever it might be, whether it be current role, prior roles. I mean, what's your sense for what people value more if you're trying to attract or retain them? In the grander scheme of things, I'd [16:33] Tom: like to believe that they look at the total package, but I think most of them are a little more short term thinking. You know, they're looking for the total pay, they're looking for vacation, work, life, balance. Lately the biggest trend was people want to work without their pants on, they want to work from home. So it's a priority to, you know, either wear your lululemons or just go pant pantless. So that seems to be a big priority. [17:01] JD: I just don't. [17:04] Chad: Or just wear a robe around all day. I mean. [17:06] Mark: That's right. [17:06] JD: Yeah, there you go. [17:10] Tom: Exactly. [17:11] JD: Keeps Me warm. [17:13] Chad: Well, Brandon, I think we have some headlines. [17:16] Mark: Ooh, look at Rick throwing headlines in the middle. [17:21] JD: Damn, I like this. Now, Rick, you gotta tell us the headlines now. [17:30] Chad: Oh, I actually have to do it. [17:31] JD: Yeah, that should be it, man. [17:33] Mark: Wait, wait, they didn't give us any show prep, Rick. [17:37] Chad: No, I thought Brandon read the headlines or something. Okay, so, hey, we'll go back to the first one. Survey says nearly half of half of all Americans will retire in debt. So that was, that was kind of an interesting one. [17:51] Mark: Such a positive, positive headline there. I love it. [17:55] JD: Yeah, Love it. [17:57] Chad: I was instructed to find something recent and interesting also, since JD loves, always loves to give 401k specialist and John Sullivan a little shout out, apparently he had Brian Graff on his latest podcast episode. So for those of you who are interested in that. And then I think our last headline was three. [18:16] JD: You got to talk about the headline, Rick. Yeah, because I'm curious. I'm curious from those that do more, if someone is retiring in debt, is it because they have a mortgage? Is that what we're considering? In debt? Because most people that retire have more built up in assets. Right. Than the outstanding balance in mortgage at age 70. And I could be completely wrong or 65, but that's what I would think. That's the only debt I could see someone carrying at that age. Only debt at that age. You would think that maybe medical, health care, Jason. Yeah. So everything else would be done. [19:00] Chad: I got slightly past the headline on that one. And that was basically, you know, Chad, I think you're right. It's mostly mortgage debt. That was, that is. They were kind of looking at or charting out what they expected retirees to go into. Into retirees to go into retirement with. It was mostly that mortgage debt or something. [19:20] Mark: I mean, how about parents paying for, I don't know, parent plus these millennials. You know what I'm saying? These millennials. Yeah. You're going to incur a lot of debt because of them. Right? [19:32] JD: College fair. College fair, fair. [19:36] Mark: College kids are taking gap years now. [19:38] Tom: You don't even have, you know, they, [19:39] Mark: oh, five years later, I'm gonna go to school and I want to go to Yale. [19:42] Chad: Like. [19:43] Mark: Yeah. [19:44] Chad: Anyways, are you, are you self identifying right now? [19:48] Mark: Yeah. My children are 7 and 3. There's no way I'm self identifying. [19:52] Tom: Okay. [19:52] Mark: I don't even know what that means. [19:53] Justin: He was talking about yourself. [19:55] Chad: Was that your path [19:58] Tom: on the way. [19:58] Chad: I said, was that your path? Gap year, five years later, go to college? [20:03] Justin: No, Mark, he's talking to You. [20:04] Mark: Oh, I get it now. I get it. See, I didn't understand the question. No, I went right away, Rick. I went right away. Okay, got it done. [20:11] Chad: There you go, Tom. [20:12] Justin: What were you trying to say it now? [20:13] Mark: It took me 12 years, but I got it done. Okay, I'm joking. [20:19] Tom: It's funny because it's true. [20:22] Chad: Hey, Tommy boy. All right. [20:25] Tom: That school debt. [20:26] Chad: Yes. [20:26] Tom: Not surprised. I got two that are almost three. I got one that I'm making my last payment on that school debt. So retire without the debt. But they may be running up their credit cards for the retirement party too. [20:43] Justin: Yeah, man, that's just thinking about that. [20:46] Chad: Like how much are they really running up? [20:47] Mark: But I guess I mean, something that we all know, Chat Chad has gambling debts, you know. [20:53] JD: Yeah. But that nobody knows about that. That's like below the radar. It's in a little black book now. [20:58] Chad: They do. [20:58] Mark: Yeah. [20:58] Chad: And now we know JD has a gambling problem. Hence I'm here. [21:03] JD: Yeah, good point. [21:06] Chad: All right, and then the last headline was apparently 3.3 is the new 4 when it comes to withdrawal rates from retirement plans. So 4% has historically been a good rule of thumb in terms of what do you see from a. You know, if you've got a pool of assets, what can you safely withdraw from that and not run out of money, assuming you get a relatively, you know, like around a 6% rate of return and a balanced portfolio. So now what they're saying is based on forward looking capital market assumptions, 4% is going to be too much. So you need to back that down to about 3.3. [21:44] JD: So which means you smart folks on the financial side of this and not the nerdy compliance side, go in and say people need to save more. Right. You need to have a bigger egg when you get there. [21:57] Mark: Yeah. [21:57] Chad: Based on that, you need, you need [21:59] JD: a bigger account balance. 3.3 a year. [22:02] Justin: He's got a nice match. [22:03] Chad: So without naming names out there, you know what we are seeing this is, this is some of the argument that we're seeing in target date construction right now is there's a few target date providers that have historically been very aggressive in their equity allocation. And one of the reasons for that is that they feel America is under saved and they're overestimating how much they're going to have. We've got a few targeted providers right now that are actually announcing shifts within their glide path, especially glide paths that are closer to retirement to increase equity allocation even at where we sit in the stock market cycle. So it's an interesting the struggle is real, as I said, with Tom trying to get his stuff off container ships. [22:44] JD: Yeah. Tom, do folks in your line of work, do employees bring these kind of questions up to people within your company, or do they know to take this to their financial advisor? [23:00] Tom: You know, that's an interesting question. They really don't bring it up. I'd love to think it's because they do take it to their financial advisor. I'm just not sure they're thinking about it at this point. I think unless there's online tools or other things that help them understand whether they're ready or not for retirement and what their goals are, I don't think a lot of them are really thinking about it. So they don't ask, are you guys [23:29] Justin: hosting semiannual or maybe annual meetings with your financial advisor to address this type of stuff? [23:35] Tom: We do. They're not mandatory, so they're, you know, their volunteer that's there if they're available. Not usually super well attended, [23:46] JD: which is a shame. And I feel like that. Well, I feel like that's a failure on us as an industry to make these valuable enough that people will tune in, that people will want to show up, that people feel the need to show up. And perhaps. Perhaps that's a communication issue, and perhaps it's also on us, because I can't tell you how many damn meetings I step into that. The initial thought from the person sitting across the table is like, oh, shit, we're talking about 401k. There is no excitement from them whatsoever. [24:21] Chad: All right, Tom, I got another round of questions for you. [24:23] Mark: So wait, hold on, hold on. We should probably spin the wheel of ice. [24:29] Chad: I was told that was after topic number two, but go ahead. Let's. [24:34] Mark: We're midway point, Rick. [24:35] Chad: We gotta drink more. All right, let's do it. [24:51] JD: I always block it with my chat bar, and I can never see it. [24:54] Justin: Everyone. No, no, no. [25:03] JD: Flipped yet? [25:04] Justin: Oh, God. [25:05] JD: Okay. [25:07] Chad: I didn't have a white. A white claw, but I had a Coors seltzer. I feel like. [25:11] Mark: I mean, that works. That works. [25:13] Chad: I feel like that's kind of the same level of grossness. Entertain the. [25:18] Justin: The guests for us, Tom, while we drink. [25:20] Mark: Yeah, we'll just, you know, just tell us the story. [25:22] Chad: Hey, so, Tom, join us. The question I was going to give you is on the line. You've got a lot of people that sell things. Not everybody, but there's a lot of people that sell things. And a lot of people like to, you know, want to sell into CFOs so if you had to take a guess, how many calls do you get a week? Daily, monthly, whatever the case is? And what can maybe some people learn from some of those calls you've taken over the years? [25:49] Mark: Rick, you owe one. [25:51] JD: You do owe one, Rick. Brandon, why are you doing a froze b. Oh, we were safe. Yes, sorry. Go ahead, Tom. [26:01] Tom: All right, so I tell you the. You know, I probably get, you know, a dozen to 20 cold calls a week. You know, on the phone. I try to screen just by, you know, whether I know the number or whether it looks familiar. It's from an area code that. And if I don't know it, I let it go to voicemail, and then I'll listen to it and just won't call back. More prevalent is really the cold emails, which have been happening more and more frequently. The most particularly annoying thing is when they send me their calendly and say, hey, I'm cold calling you. Feel free to log into my calendar and set up a meeting with me. And I was like, oh, exactly, Josh. Very presumptuous. [26:56] JD: That's exactly what I would like to do. Yes. [26:59] Tom: I was like, okay, I don't know who you are. I wasn't looking for your service, but why don't I get on your calendar? You know, make the effort to get on your calendar because you can't bother to, you know, even reach out. So. [27:11] JD: Yeah. [27:13] Justin: Have you ever had an advisor just [27:15] Chad: show up at the office? [27:17] Tom: We get that with staffing agencies and a few others where they show up. And I think one kind of awkward situation last year was we're in the peak of COVID We only have our warehouse. Most people are working from home, and the staffing agency shows up with this big plate full of cookies, and all I could think of was Covid cookies. You're bringing us Covid cookies? Wrong time to bring a gift. You know, where you've been touching it, and we don't know where the cookies came from. [27:49] Mark: That's an acrosant, right? [27:51] JD: Yeah. [27:53] Mark: Right, Covid. [27:55] Justin: I don't know. [27:56] Chad: I'll drink with them for that. [27:57] Tom: Okay. [27:57] Mark: All right, you guys keep saying it, and I haven't pushed the button yet. [28:00] Justin: So hash cookies. Come on, Greg. [28:04] JD: Hey. Hey, Tom. Someone asked in the chat bar, are there any types of communications from these. These folks that actually get your ear that have you interested? What does it take to get Chief Financial Officer Tom excited about taking a meeting? [28:22] Tom: To me, really, it's just about timing. So if I happen to be either thinking about a particular topic or looking for Something and they happen to reach out at the right time, which is very rare. Usually if I do pick up or I do talk to them, I'll just say, if I. If I end up looking for this service and you're as good as you say you are, I'm sure I'll find you again. So there's not much really, that. That gets my attention. In terms of the cold call, what's the worst handoff or an introduction from somebody who knows somebody or has worked with them usually is much more meaningful to me. [29:01] JD: Oh, certainly. Yeah. That kind of introduction. What's. What's the worst you get, Tom? Is it LinkedIn? Is it email? Is it a phone call? Is it the ra. Random stop by? [29:11] Chad: Oh, the. The. The aforementioned sea cookies sounded pretty bad. [29:16] Tom: That was. That was a situation bad. But I think the LinkedIn, you know, the constant barrage of having to ignore invites from. From different salespeople who are obviously just trying to link in so they can send me a note to send me a sales pitch is probably, you know, the worst. [29:37] Justin: Yeah. [29:38] JD: Noted. Thank you, Tom. [29:40] Tom: Yeah. [29:41] Justin: So for someone in your shoes, Tom, you know, someone put a question in the Q and A as professionals in the 401k industry. [29:50] Chad: What. [29:52] JD: Question and answer. [29:53] Justin: Anyways. Oh, shit. Anyways. What services or assistance do you need that we in the industry are not providing to you? [30:01] Chad: You just need to jump in ahead. [30:05] Justin: Well, if I had a fucking agenda, I wouldn't. [30:08] Chad: Dude, this was. This was all locked down. [30:11] Tom: You know, let's keep that closeout question, you guys. [30:15] Chad: I'm saying that's a segment three question. [30:18] Mark: All right, well, let's table that then. [30:21] Chad: So, yeah, so the question. I think I'll take a slight derivative on that. You said, you mentioned timing, but how else can someone who's trying to get to know you, who's trying to earn your business in a positive way, how can they kind of get in the door or get into your Rolodex as somebody that is either, you know, in the. In the orbit when you need help or someone that you kind of consider running something by if you weren't happy with the current solution? [30:56] Tom: That's a tough question because usually what I do is I go out and, you know, now that we've got this. This series of interconnected servers, the World Wide Web, usually what I'll do is seek out, you know, various service providers, you know, look at ratings, recommendations, things like that. More so than when somebody's cold calling me. [31:20] JD: That's Rick for you. That's hard, right? Having ratings on these sites or references or what is it on LinkedIn when [31:29] Chad: the podcast has got a 4.7 rating. [31:30] JD: That's true. But advisors can shameless plugs both on LinkedIn. What's the damn word I'm looking for? It's not recommendations. [31:40] Chad: Yeah, endorsements. [31:42] JD: Endorsements, right. Like advisors can't get endorsements on many of the social media sites. So it can be hard for someone like Tom to find the right person or to weed through the wrong ones. Perhaps I should say. [31:54] Tom: Yeah, I think one key thing would be just working through networks, like networks with other CFOs. I happen to work with private equity backed companies, so usually we have a group of CFOs that you can lean on to find out who they're using, who they're working with, things like that. But it is. It would be tough as a service provider to really stand out. [32:19] JD: Yeah, well, and especially with the. [32:22] Tom: Sorry. [32:23] JD: With the ease nowadays of reaching someone. Like you said, you just get bombarded. When you said 12, I think you said 12 to two dozen. A dozen to two dozen communications a week, cold calls a week like that was mind blowing for me. That there are that many folks that are just looking at 5005-00 and dialing for dollars still. [32:45] Chad: That's everything. [32:48] JD: Oh, I get that. I just thought our industry had gotten past that. You know, the. The narrowing of the players. Right. Merrill, Morgan, all these firms said you, you, you and you cannot sell 401k plans. You got to use that corner office person. And so I thought the narrowing of the advisor arena would get rid of some of that straight cold calling on this space. But apparently I'm wrong. [33:12] Tom: You're wrong, Chad. [33:13] JD: Thanks, Mark. Appreciate you. [33:14] Mark: Just so you know. All right. [33:17] Chad: I don't know what this means, but it's time for lamer game. [33:21] Mark: What do you mean you don't know what this means? [33:23] JD: Oh, he knows. [33:24] Chad: I don't think I played this one a hard time. Feel like you have, Rick. [33:28] Mark: All right. No, I don't. [33:29] Chad: I don't think I have played this. [33:30] Justin: I don't think. We didn't do it when he was on the show last. No, early. [33:33] Chad: I don't think I played this one early. [33:35] Mark: All right, well, guess what? Guess what, boys. It's the Thanksgiving version of the lamer game. This is going to be right. No, hold on. This is going to be rapid fire. Okay? I'm not going to take too much time on all this stuff. Let me go quick. But just as a filler here, Tom, the lamer Game game is very Simple. I'm going to ask a question. It's either lame or your game. That sound easy enough. All right, so once I answer the question, Ask the question. I will always come to you first and I'll get your opinion or answer. Okay, here we go again. Thanksgiving edition. Keep that in mind. Number one, canned cranberry sauce. Lame. Or game. [34:18] Chad: Tom Lame. [34:21] Mark: Justin Lame. Chad. [34:24] JD: Disgusting. So lame. Rick. [34:29] Chad: Jellied. Game. The canned canned jelly. Game on. [34:34] Mark: Oh yeah, it's the best. All right, next question. [34:37] JD: Not the whole berries. [34:38] Chad: You can't have the whole berries in the can. It's got to be the jelly. [34:41] Mark: No, just like the one you cut and like, it looks like jello. [34:44] Chad: It's fantastic. [34:45] JD: Game. [34:45] Justin: Game on. [34:45] Tom: Yeah. [34:46] Mark: All right. [34:46] Chad: Best part about Thanksgiving. [34:48] Mark: Lamer. Game. Tom. Watching the Thanksgiving parade on tv. Go game. [34:54] Tom: Do it every year, Chad. [34:58] JD: With the kids. It is always on in the background. I'm game. [35:03] Mark: Justin Lame. You don't strike me as a parade guy. [35:08] Justin: No, I don't have the patience to sit there. [35:11] Mark: Rick. [35:13] Chad: Lame. I'd rather be watching Michigan State. [35:16] JD: All right, that was part of the question. Rick. It was just about the parade because yes, I'd rather be watching Michigan State too. [35:24] Mark: I'd rather be watching the Raiders for the Cowboys. But that's just my opinion. All right, Tom, Instagram posts of your plate of Thanksgiving food. So your Thanksgiving meal, once you serve yourself your 4000 calorie meal for the night, taking a picture like and eating the same meal that everyone else is having that day. Laying your game tomorrow. [35:46] JD: Wow. [35:46] Tom: When you phrase it that way, I gotta go lame. [35:50] Mark: All right, how about I don't need [35:51] Chad: the witness a little bit. [35:52] Justin: Don't fall into his trap there. [35:54] Mark: I know, right? Let's speak for you. All right, Justin. [35:58] Chad: Game. [35:59] Justin: Sharing the joy, the thanks. Let's do it. [36:03] Mark: Chad. [36:04] Justin: Imagine you know what type of picture we're get from Chad on. [36:07] Chad: Oh no, you're down here. Nevermind. [36:09] Justin: Anyways, keep going. [36:10] JD: I don't. Yeah, I didn't hear the question. But I'm going to stick with Tom and I'm going to go with Lane. [36:15] Mark: You didn't hear Mike? [36:16] JD: I was busy acknowledging Heidi saying that the Cowboys are lame and true. I missed your question. [36:23] Mark: All right, Rick. Okay, along those same lines, people who post, and I'm not even on Facebook, but people who post what they're thankful for or some sort of thankful. Thankful like little blurb positive messaging on this day of thanks. Lamer game. Tom. [36:48] Tom: You know, I think it's nice that they're thankful for things but they should keep it to themselves. Posting it is lame. [36:56] Mark: All right, Rick, [36:59] Chad: I'm going to talk out of both sides of my mouth here. I think if you are authentic and you really have something you are thankful for, I think it's super cool. I think if you are doing something as a selfie or whatever and you're like, thankful for my life, I think that's pretty lame. [37:18] JD: I don't know how to put this, but I'm kind of a big deal. [37:24] Mark: All right, Chad. [37:25] Chad: Many leatherman books. [37:27] JD: I'm kind of agreeing with Rick here. If you're genuinely thankful and you want to share that with people and let them know publicly that you appreciate them and then go for it. But saying I'm thankful for this great meal that, you know, mom cooked for me or I cook not. Not there. [37:45] Chad: That doesn't need to be shared with a huge something. [37:48] JD: Yeah, yeah. [37:49] Justin: Justin, you can tell the people who are just doing it just because they're social media whores and the people who are genuine. And so I get. I go through that like, you're full of shit. [37:57] JD: Oh, you're right. [37:58] Justin: Okay. Like you. [38:00] Mark: All right, last question. The tradition of going around the table at dinner time on Thanksgiving and asking everybody, now say what you're thankful for. Lamer game, Tom. [38:13] Tom: I'm glad. They usually spring that on us, but I think that's total game. Great Thanksgiving tradition, Justin. [38:24] JD: We don't do it. [38:25] Mark: That's not the question, bro. Do you want to do it? [38:30] Justin: Not really. I just want to eat and go to sleep. [38:33] Mark: All right, Chad. [38:35] JD: I'm game. If you're thankful and you want to share it all year round. You don't need to be put on the spot on one day a year to tell people what you're appreciative of. Like, live in the moment, man. Come on. [38:48] Chad: I'm thankful for Jason Lee. [38:50] JD: Jason's becoming one of my favorites. [38:53] Mark: And last but not least, my favorite retireholic, Rick. [38:57] Chad: I'm game. But we do, you know, we do a prayer and then we eat. So it's just not our deal. But I'm game for it. [39:04] Mark: All right, well, you know what they say? [39:07] JD: You know what they say? [39:08] Mark: I ran out of beer. [39:10] Tom: Cheers. [39:12] Mark: All right. [39:13] JD: You need more, Mark? [39:15] Chad: Justin, you had a phenomenal question a minute ago. I'd love for you to re ask it to Tom right now. [39:23] Justin: Tom, as professionals in the 401k industry, we all think we know what people like you need. But what services or assistances do you need that we don't yet provide? [39:39] Tom: Did you read that off of a cue card? [39:42] Justin: Yeah, it was bad. [39:43] JD: A LinkedIn cue card. [39:48] Justin: Someone was messing with the Q. [39:50] Tom: And are we answering? That's [39:54] JD: no. That's the full answer for you here. What else do you see? What could we do better? What do you need? [40:02] Tom: I take less paperwork technologies. [40:07] Chad: That's all Chad's fault, by the way. [40:12] Tom: Easier access, easier visibility. You know, I think the services has really stepped up. I think, you know, the next sort of, the next evolution is really access visibility and the tools you need to plan a great retirement and maximize your 401k. [40:41] Chad: Golf clap. Chad, would you want to jump in with something? [40:47] JD: I feel like Tom may be an anomaly in this. Like you sounds like you work for a good company right now. You mentioned 100 plus employees. You've got a company contribution in place. When I think about that question, the first thing I think about, Justin, is we need to deliver on what we promised we're going to deliver on in the first place. Like get education meetings done. Like Kush said in the chat bar, don't let them be generic. Come in and silo the employee base in the different groups. Communicate with them on what is actually meaningful to them. These are things that should be a given in every plan. They're not right now. So yeah, I'm going to do a [41:29] Chad: JD here for a second. Let's kill the education meetings and just do automatic enrollment. [41:34] JD: Oh, unserved. Geez. [41:37] Chad: What do you guys use? [41:40] Justin: Automatic enrollment? [41:41] Tom: We do not use automatic enrollment. [41:44] Justin: Is there a reason or just you guys haven't talked about it? [41:47] Tom: Our team members would probably revolt. [41:50] Chad: That's a perception. That's okay. [41:52] JD: It's rare, right Rick? Like it's rare that anybody revolts in that scenario. But the reason why I give you heat on that, Rick, is that doesn't solve most of these folks actual problem. Most of them, this saving for their future is not their issue. The issue is the decisions that they're making now. They're going out and they're like someone said in the chat bar, which is likely, JD they're putting Ferraris on their credit card. Like they're spending money they should not be spending. They're not paying down debt. They're not using their dollars in the right way. These are all things we should as financial professionals be able to help people with. [42:31] Mark: I have to ask the question I think it kind of butts up against that is because I give it a hard time. I think probably Justin and Chad know I'm going to say financial wellness or wellness Tools. Are you guys incorporating any type of financial wellness into your offering to your employees? [42:50] Chad: Is it utilized? [42:51] Mark: Because I'm a, I'm a naysayer on that side. I'm just curious to know. [42:57] Tom: No, we actually don't. I think the most we do is really the annual sort of education process. But I think most people end up in the age based funds because I think they get nervous to invest in anything else. [43:14] Chad: Do you guys on the health side, do you have a wellness program? [43:18] Tom: On our health benefits? We do not. [43:23] Chad: I think one begets the other in a lot of ways. [43:26] JD: What do you mean, Rick? [43:27] Chad: Meaning if you buy into wellness on the from on your health insurance, then if you've kind of baked that for a couple of years and people are used to that and they're seeing the communications around it, then that starts to beget. Okay, well what else can we do with this? All right, well, let's put financial wellness into that. And so that's where we've seen financial wellness be the most successful, is it's, it's tough to get somebody to buy off on wellness if financial wellness is the, you know, the first toe in the pool. But if you're, if you're already committed or you're thinking about executing a wellness program on the health side, then generally speaking people are looking to bolt different aspects onto that to increase the reach and effectiveness. [44:11] Mark: Man, our host is so well spoken [44:14] JD: and smart and eloquent. [44:16] Chad: It's ridiculous. I know it's. And I'm like three, four beers in [44:21] Mark: at this point, so I know it's impressive. Yeah. [44:23] Justin: I really hope our exit song is the 401K Friday's podcast. [44:27] JD: Yeah. Hey. To JD for years has said to us both in passing and on this show a bunch of that. He used to love the 401k focused advisor, but now he realizes the convergence means you shouldn't just be 401k folks. You could be, but you need to have the right partners to help with the health and the group side of things. Rick, to your point a second ago, and I think that this is why I enjoy advisors that do what you do. Meaning you're very holistic in the way you, you help clients and so are many of the folks here. As I see the chat bar bouncing. My problem with some of the people who are here right now that focus solely on 401ks is they sell what they get paid on. Right? Like the thought of, oh, let's push auto enroll, auto enroll is not necessarily right for everyone. But we want to Push the sale of a 401k plan. Right. I ran into it the other day where a company was pushing a 403B or, sorry, was pushing a 401K to a nonprofit, because that's what they sold. They didn't sell four, three. They don't have four or three BS as a suite for them. And I feel like as an industry, folks who are focused solely on the 401k sales, they're not really consulting with the client. They're pushing a retirement plan. [45:46] Chad: Yeah. When you got an. The world's a nail. [45:50] JD: There you go. [45:51] Chad: Yeah. But I think that. I think there's some really. This is a really cool time in our industry. You know, we're going through a cool evolution right now that I'm super excited about for, you know, for 2022 and beyond. And I think that really, at this point, pretty much everything's on the table. And I think for advisors, I think for people that are, you know, that have the year of the cfo, that have the year of the C suite, the more that you can talk the talk and kind of think about outcomes and think about what's important to them, which right now in our world is recruiting and retention and things like that, the more you can kind of help people connect dots or come up with ideas to sound different and capture people's attention, to either not leave or to join them, that's instant relevance, in my humble opinion. But, you know, I don't know, Tom. I'll leave that one to you. Maybe I'm wrong. [46:48] Mark: Sorry, Rick, you got. I don't know when it was, but you got called out by the chat bar and I believe them. I don't know. [46:59] Justin: Well, whatever, I'm in. [47:02] Chad: Hey, I've got happy hour after this, too, so this is going to be great. [47:04] Mark: Oh, man, you're an animal. [47:09] Tom: Hey, Rick, I know you threw it over to me, but I kind of lost you halfway through. [47:16] Chad: I mean, I think that's why my committee meetings go so well, is most people end up asleep at the end, [47:21] JD: but they're like, that guy is smart. I'm glad he's on our side. Hey, Tom, I threw out a question on LinkedIn and I pretty sure I know the answer to this one, but curious, because it's one of those points that we made earlier that I wish more would do. When you chat with the owners of your company or the powers that be about the cost of the match that you all have, do you help them understand the cost of the match? After the tax savings that the business accrues or are you just saying the cost of our match is 70 grand a year? Like that's what we're. That's our outlay. [47:59] Tom: I usually don't talk about the tax benefits of the match. It's really. I talk about in terms of the importance as a retention tool. [48:09] JD: Oh, kudos. [48:10] Tom: It's been part of the culture. We have very low turnover. I want to keep it that way. And so that's usually how I phrase really every year, keeping that match in place. [48:23] JD: Not really. [48:25] Tom: That's really a great ancillary benefit to it though. [48:29] Justin: Do you guys use a long term vesting schedule with that or is it [48:32] Chad: pretty short [48:35] Tom: right now? It's a. And Rick, you can correct me if it was a five year vesting schedule that vests 20% each year. [48:43] Mark: Okay, wait, Rick, correct me. Wait, are you a spicer on his money, [48:51] Tom: Rick? So knowledgeable about these things that I'm [48:55] Chad: clairvoyance when it comes to things I just know. [48:57] Justin: Like. [48:58] Chad: Like Kreskin. Oh, here. Yeah. So. So for so 401k nerd. This was a great. This was a great topic of conversation. 50% uncapped match, but want to be a safe harbor. Go. [49:12] JD: Wait, so to get 50% uncapped match. So 50 cents on every dollar put into the plan or 50 cents on income up to what will be on [49:22] Chad: every dollar put into the plan, but want to be safe harbor. [49:25] JD: Go. Yeah, look at deferral rates pretty cleanly. You only want to be safe harbor if you need to be safe harbor because you can use on the match. [49:32] Chad: I want a 50% uncapped match, but I want to be a safe harbor. [49:37] JD: No, you can't. You can't. The initial 3% needs to at least be 100% of the first 3%. Using a Quokka with auto enrollment. Then you can. [49:47] Chad: You got one. [49:48] JD: You got one, Rick, I feel like you just baited me there. [49:55] Chad: No, you're getting there though. [49:56] JD: Rick. [49:56] Tom: Your. [49:56] JD: Your ability to ask that question was almost like when you did the quiz of death question and I looked at you like, was that even a. Was that a question? How do you want me to answer that? [50:08] Chad: So there's a way to get there though. You just have to be more generous. [50:12] JD: Yeah, you got to give more upfront. You don't necessarily have to be more generous. You can look. And if your overall match outlay ends up being 6% of pay because the average deferral is 12, then your safe harbor is going to cost you less. But what you need to do is at least give them more upfront to meet the Safe harbor minimums. [50:32] Chad: So 401k nerd, check me on this. And then we'll go to the. And then we'll go to the wrap up here. So if I am. So I'm. If I want to keep my 50% uncapped match, but I want to be safe harbor, if I'm going to do 100% on the four to get, to get to safe harbor, I have to add another 50% onto the first 4%. So I'm really doing 150 on the first four and then 50 on anything above four. [51:02] JD: If you need the safe harbor protection, you can't match on anything above 6%. [51:08] Chad: Considered safe harbor. Yeah. Anything else is subject to AC average contribution percentage. [51:13] Mark: Oh, there you go. [51:14] Justin: That is. [51:15] JD: So what you're talking about is that [51:18] Chad: was like a check swing. I feel like that was a check swing. [51:21] Justin: You said two out of the three. I don't know. [51:22] JD: He. [51:23] Mark: He said [51:25] JD: that was across the plate. The hands crossed the bat drug a little bit. [51:29] Chad: Just like the third. Just like the third strike. [51:32] Mark: Because you said that you get one. [51:33] Tom: One. [51:33] Chad: Yeah. I'll take that. And this. And this was my, this was my warm Jameson. [51:39] JD: Ooh. [51:40] Chad: That I had. That was Rick. [51:42] Mark: You're gonna have some fun tonight, buddy. [51:44] Chad: Oh, yeah. [51:44] JD: He's going to happy hour after this. Hey, Rick. I'll make one more comment on that. The guys do this. We've done this for years. If you have a very young group of owners and you know, cross tested profit sharing doesn't work. It's heavy cost. On the profit sharing side, if you're funding any type of. Often what we'll do is what you're talking about a supplemental match. We'll do like a dollar for dollar match up to 6%. We'll add a supplemental match on the first 4%. So they're essentially getting a 200% match on their initial dollars going in. And you can get a 25 year old chief executive officer or business owner up to some 40 or 50 grand of funding into the plan without even using profit sharing. [52:26] Chad: I think he just said you were 25 years old, Tom. [52:29] JD: Yeah, Tom, 25. We're gonna get 50 grand into your plan. [52:33] Tom: Yeah, we're gonna have to talk a little bit more about how exactly you do that because I'm very. [52:40] JD: You need to let Rick go. Bring us on. We'll take care of you, Tom. [52:47] Chad: Well, on that note, I think it's [52:49] Mark: time to wrap up in a van [52:51] JD: down by the river. [52:53] Mark: Now we have to vote for. For chat bar champion. Okay. [52:57] Chad: All right. [52:59] Mark: Usually, again, Rick, I would let you kind of take this, but I'll run [53:02] Chad: with it from here just to make [53:03] Mark: sure we get this done. [53:06] Chad: I appreciate that. [53:08] Mark: Justin, your vote, please. [53:11] Chad: It's. [53:11] Mark: Oh, okay. Tom, were you able. Were you able to look at the chat at all? [53:18] Tom: I have been. I enjoy Josh Itzo. [53:21] Mark: All right. [53:22] Chad: Can't take him. I took him. [53:23] Mark: No, you can double. There's no rules against that, so. Times two, Chad. [53:31] JD: I was torn. I was torn between Jason and it's so. And I'm going. Jason Lee, heavy contributions tonight, and we appreciate you. [53:42] Mark: All right, Rick, who's your vote? [53:44] Justin: Why is my vote. [53:46] Chad: What are the criteria for champion? [53:48] Mark: Oh, it's anybody, really, if you like. There they said something funny. If they had good content, if they were active. It doesn't matter. [53:53] JD: Ask good questions. Anything that you find valuable in that bar. [53:57] Chad: I think it was Greg, as he's heckling me most about my podcast, especially the 4.7. Greg and the lack of. And the lack of. Or too much hair gel, apparently. [54:07] Mark: All right, I'm gonna throw Kush into the mix for some good questions. I've missed Kush being here. Welcome back, my friend. All right, Brandon will throw up the graphic. We'll have to take a vote, see who wins. [54:23] JD: Tom, your. Your vote, by the way, since you haven't been on before. All of these. These are staples, these folks that have commented tonight. These are people that always are in the top running of the chat bar, [54:34] Mark: and we're not allowed to vote, so [54:35] Chad: just get rid of that screen, okay? I was like, I can't do anything. No, we did. He doesn't let us vote. [54:42] JD: Itzo's written, like, four dozen books, so you picked a good person. He has a podcast like Rick. [54:49] Chad: I'm sure his is better than mine. [54:50] Justin: Mine's. [54:51] Chad: Mine's pretty boring these days. [54:52] Justin: He uses the same intro music you do. [54:54] Mark: I know, like, you guys, intros are eerily similar. [54:57] JD: Yeah. [54:58] Tom: Is it better than a 4.7? [55:03] Chad: It's on a scale of 1 to 10. [55:04] JD: You know, Anybody wants to get a vote? [55:12] Mark: Yeah, there we go. [55:13] JD: I think Greg's winning. [55:18] Justin: Congrats, sir. [55:19] Mark: Jason in the chat bar, tell us which mug you want. It could be Justin Silent Justin, Ernie Chad, limited edition Rick Unser that we don't have, but I guess we'll have to make it J.D. carlson or myself. And once you let us know which one, we'll send it to you. Anybody have Jason's contact Because usually we get it DM to JD but we don't. You just chat it to one of [55:47] JD: us in the chat. [55:54] Mark: Oh, wait, don't start the music yet. [55:58] Chad: Yes. Thank you. [55:59] Mark: All right, now we got. We got to say goodbye. I think, Rick, I think it's only fair that you send us out of here. [56:03] JD: Rick, by the way, well done. That's a hard seat to fill, keeping pace with these guys breaking the ice all the time, trying to throw you off your game. [56:13] Chad: I feel like we're right on time here. [56:15] Mark: Right? We are. [56:17] Chad: Thank you very much, especially considering we started late. Chief Financial Officer Tom, thank you for being here. Great insights. Super. Appreciate it. [56:24] Mark: Thank you, Tom. [56:26] Chad: I had a funny feeling. I had a funny feeling you'd fit right in. So, gentlemen, appreciate you having. Chad, Mark, always a pleasure, boys. Thank you. [56:35] JD: Thank you. Stick around if you can. Let us beat you up with some questions in the after show. [56:40] Mark: Yeah, we do hang out in a minute. [56:43] Tom: Really? [56:43] Justin: A two hour show? [56:45] JD: Like four hours, but who's counting? [56:48] Mark: All right, well, Brandon will play some music. Thank you again, Tom. And yeah, we're gonna stick around for a little bit, for a little after show fun. Thanks, everyone. [56:56] Chad: All right, all right. I don't think it was controversial enough. I needed to mix it up a little more like JD Just throw some bombs in there. [57:03] JD: Well, try to get Tom mad at you.