So I came across this article in Wired’s Good Design is Good Business that says:

 “A mix of factors, ranging from commoditization to evaporating barriers to competition, are conspiring to push design to the fore of business thinking”

They could be talking about our business, the retirement plan business.

While the entire retirement plan world seems to be focused on fees, plan design can be a good selling point for the advisor who wants to add value – and not be commoditized.

Here’s an example as recent as last week. Working with an advisor on a takeover of a medical group 401(k)/profit sharing plan, we looked at the plan document (always a good source of what could be done better) and noticed the profit sharing allocation formula used an “Integrated” method.

You would have seen a lot of these types of plans if you were in the business prior to 2000 when that was the only effective way of allocating more to higher paid employees. But in 2000, the Internal Revenue Service issued regulations for an allocation method called “New Comparability” or “Cross-Testing”.

More effective for tax planning purposes and more flexible than Integration, New Comparability has been  the norm for over 10 years.  It’s going to be hard for the incumbents to explain why the plan is stuck in the past.  

If good plan design is good business, then bad plan design can lose business.

Jerry Kalish is President of National Benefit Services, Inc., a Chicago- based Third Party Administrator. He is the publisher of The Retirement Plan Blog. Jerry can be reached at


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