[00:00:00] Speaker A: SA welcome to Balancing Acts, the show where we explore strategies, challenges and breakthroughs that help business owners build profitable, resilient companies. I'm Linda Hamilton, your host, a CPA certified exit planning advisor and a certified systemologist. Running a business is not just about hard work. It's about strategy for managed growth and profitability and for building a business that for the long term supports your life and not the other way around.
And today we have with us Bob Nienaber.
He has chfc, R I C P, a lot of letters after his name. He's co founder of BenefitRFP, an award winning author and trusted advisor to boards and executives. Many business owners know they need to attract and retain talent, top talent. But executive benefits are often misunderstood. And Bob helps companies design strategies that protect leaders and their organizations.
So Bob, you've been doing this, working in this industry for a long time, since maybe 2009.
How have benefits evolved over that time? I only see them from the tax side.
So, you know, I'm really interested on looking at it from the bigger picture.
[00:01:51] Speaker B: Well, the, and actually I go back before 2009, I've been doing this for about 35 years. And the, you know, when you think about executive benefits, what you're thinking about is, is how to put together a program that helps you recruit, retain, reward your top people. And at the end of the day, if you don't have a good team, you're not going to have a very powerful company. And so you really want to focus on that. What a lot of things, some of the things that have really changed over the past 20 years is these plans were usually just used for the benefit packages for public companies, very large companies. Now we see smaller companies that are doing a plan for one or two people because it's so competitive out there, they're looking for strategies to keep them tied in and locked into their company. And I like to use sports analogies. I'm a baseball fan and you see the Yankees, whether you love them or hate them, every year they put together a good team. They keep everybody locked in, they take care of their people.
Teams, though, that don't do so well are teams that constantly are changing people, staff.
They don't keep people locked in. The culture changes.
Everything is kind of, you know, crazy when you have people coming and going. And what a lot of companies don't realize is that one of the largest costs you're going to have for executive payouts is, is when you either don't have a plan or you do a plan improperly. And there's no reason for people to stick around. So, you know, we work with companies very, very closely.
Public, private, not for profit, it doesn't matter. We get in there and find out what the design strategy needs to be to make that company more successful with their folks they have so they don't suffer the high cost of turnover.
[00:03:34] Speaker A: Well, that's, I think that's so true that there was a time it was only for big companies. And I'm, I'm a member of the Women Presidents organization. So that's a national organization and there's a lot. They are small companies and you know, if you look at the SBA definition of a small company, we're all small companies. But they do struggle with, with attracting talent and with keeping them because people will jump ship easily. So you have to have a mix of culture as well as financial benefits because it's not just about salary. Right, right.
What would you say is the biggest misconception business owners have about executive benefit packages?
[00:04:16] Speaker B: Well, they're, you know, their misconceptions are, are backed by years and years of poor plan and poor designs that have been put together.
The, the perception is that if, if I put together a plan, it's just going to be a lot of money coming out of the corporate pockets and I might not have that. I might be a growth company, I might be a, you know, Silicon Valley company or now with AI grown, we're seeing a lot of AI companies come to us to put together packages to, to keep their company's culture the same, to really grow on, on what their long term growth is going to be, but also how to keep these people happy on the short term. But when a plan is done properly and funded properly, the plan will actually produce a profit for the company. So it's not really a cost, it's a profit for.
Also from a cash flow standpoint because of most non qualified plans have a missed current deduction that goes into play. But when you play these out, you really understand that the cash flow related to building out these plans is much cheaper than paying them the old fashioned way by giving them a bonus, giving them stock and then dealing with the long term ill effects that sometimes has. And so you know, the first thing that we always tell people and we give this as a guarantee that these plans will produce a profit for the company. CFOs love that, their tax guidance loves that, their treasury departments love that. But then also demonstrating for them before they even implement the plan how to make sure these plans are going to reduce the cash flow necessary to pay these executives. And actually when they build the profits into these, and when I'm talking about profits, a small plan will profit the company by several million dollars. A mid sized company is going to represent about a 5 to 7 million dollar savings. And we show them how to take these dollars, put it back to other uses within the company. They might want to improve things like 401k plans for, for people that are at all levels with the company, maybe they want to do something for the owners and shareholders. They can use those dollars for that so they can use these, these excess dollars any way they can. So it really puts a company in a stronger financial, financial position. And just from doing this for the past 35 years, I can tell you with my experience, I've seen a lot of great companies really grown like crazy, but they didn't implement a plan and then later they fell apart. And so when you, when you're thinking about these plans, you don't want to think too late in the game. You want to, you want to be upfront and early with them so that you can lock in your best people and you know, start building the culture that you want.
[00:06:47] Speaker A: So there's a lot of information there. I want to unpack that a little bit and walk back.
So one, when you're talking about designing a plan that sounds like it's not a one size fits all for, you know, the companies that come to you, there are going to be some choices. What influences some of those choices?
[00:07:06] Speaker B: Really it's the demographics of the company. So I can take and line up all the Fortune 100 companies that we've worked with and I can tell you all their plans are different because their goals are different, their settings are different, their diagnostics report different tax rates for the company. Some are net operating losses because they're buying and growing and reinvesting dollars. All these things go into the conversation. When you're designing a plan with a non qualified plan, one of the areas that makes it so exciting and so much fun to work with and it should always be fun when you're talking about money. Right? So, but one of the things that makes it really nice is a non qualified plan. A 409A plan is the reg that these fall under really is an open architecture world for all these companies. And so they can get in and really specifically design these plans simply for their highly compensated executives. They're highly compensated executives need these plans because if you're, especially if you're working in a state like I'm in California, you don't get a lot of tax relief in California businesses, but these plans can actually provide parity around the country or around the world. So that if you have folks living in tax free areas or folks that are living in reduced tax areas or high tax areas like California, you can still take advantage and provide the same type of parity across the board for everybody in there. It's just based on plan design, how you want to have vesting provided in these. Do you want to allow participants to Defer up to 100% of their income or 100% of their bonus?
Are you having a 401k testing issue? Are you having, are you being forced into safe harbor plans which are really not very good at retaining people since you're giving out vested dollars right off the get go. But if you take those highly compensated people out of that plan or if you actually mirror them into those plans and provide both a non qualified plan as well as a 401k or whatever your qualified benefit plan of choice is, you're going to make that plan and that participant feel much more successful because they're going to be able to set aside. And as you can guess, if you're making a half million dol want to put away, you know, 20, 30% of your income because you're trying to do some catch up for retiring, you can't do that with a qualified plan because they have restrictions, but with the non qualified plan you have no restrictions.
[00:09:22] Speaker A: Right.
[00:09:23] Speaker B: So it's very favorable for the companies that utilize these plans.
[00:09:27] Speaker A: So I just want to briefly say for those listening who don't know what the difference is between a qualified and non qualified plan. Right. Has something to do with whether tax taxation and whether or not the how much they can put in for their employees. Can you just give us a brief differential about that?
[00:09:48] Speaker B: Sure, sure. When you're dealing with qualified plans, qualified plans, they fall under ERISA rules and, and you can't discriminate. You have limitations. What you can put into the dollars, you have to pull that money out within certain periods of your lifetime.
You know, you really are in partnership with the government with a qualified plan. With a non qualified plan, a lot of the ERISA rules are eased so that you can actually discriminate who you're putting in.
So these plans are designed for the highly compensated folks because they are restricted against qualified plan limitations.
And so at the end of the day, non qualified plan, it's nothing illegal. It's not, you know, you're not signing papers behind the build and that type of thing. These are simply plans that do not have to qualify for all the risk of rules. So it gives you great flexibility from an employer standpoint, from a participant standpoint.
[00:10:40] Speaker A: Great. And when you talked about that, the, the non qualified and kind of large amounts we're discussing. So are there, you know, is there specific size, like how small a company in revenue could, could consider something like this? Is it 1 million, 2 million? I mean some of the numbers you throw out were much larger.
[00:11:02] Speaker B: Yeah, there's, that's a great question. Because these plans, when you, when you're thinking about a non qualified plan, you're really focused on your highly compensated individuals. And so let's say I'm in a company and we have 10 employees and one of them is in a technology area for AI or for any tech firm, I can do a plan for one person. So it's really not company size that's going to make a big difference as you go up in size. As a company becomes, you know, a company that's doing $200 million of revenue on up, then you're going to see a much broader population that's going to be utilizing these plans. So for, you know, a lot of the larger public companies, they use these as the number one benefit tools out there because even if they don't want to give out stock, they can give out stock appreciation rights and make that participant feel as though they are sharing in stock.
And you can treat these folks so that if I'm in a private company and I'm competing for top talent and I'm trying to figure out a way to get them away from a public company where they're used to giving stock and you know, stock appreciation rights and RSUs and all these things. I can now compete, I don't have to worry about not being able at the same level.
[00:12:17] Speaker A: And that's, I think that's great information. We're going to take a break in a moment. How can people find out more about your company?
[00:12:25] Speaker B: They can call, they can call. If it's a CEO or senior exec, I always give out my direct phone number, 916-838-0866 and you know, we can talk through anything they want to design. I prefer to have those direct conversations with those folks. But also they can go out to our website, www.benefitrfp.com. we're a Simplicity company so we've got 90 offices around the country and you know, this is what we focus on. So we, we've seen every type of plan that, that's out there and available.
[00:12:55] Speaker A: And we're going to take a break now. Executive benefits aren't just about perks. They're about creating stability and, and financial safety for leaders and businesses. Stay with us. And when we come back, we're going to talk about building a culture of financial security for leaders. Stay with us.
Welcome to Balancing Acts. I'm your host Linda Hamilton and we're talking with Bob Nienaber about executive benefits and perks.
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Executive benefits, they're not just perks, but they're about creating a long term financial security for leaders who are building growth companies who are having a lot of success and do need to retain talent. Bob brings a humanitarian lens to his work and he makes sure that the programs serve both the executives and the organizations.
Bob, I know you've won humanitarian awards for your work. How do you bring that perspective into financial planning and benefits for businesses?
[00:14:58] Speaker B: Well, first off, thank you for having me this morning, Linda.
When you think about the humanitarian award, people always ask me where that came from and all that. That's just from years and years of working with Congress on the rules around executive plans.
You know, working with charities, given a lot back to the community, doing mentorship programs, all that stuff. So that just kind of comes out as a, you know, long term career goes through its normal process.
For, for plans though, you bring up a great point. These are not just for the largest companies on the face of the planet. We're seeing more and more in the last 20 years. We're seeing most of the plans for much smaller companies. Companies that are doing 10, 20, $30 million are getting involved in these plans because yeah, these aren't just perks, these are must haves. Non qualified plans are the most commonly used benefit programs that exist out there. But it could be a simple key person insurance program that gives the cash values to the participants when they retire. It could be a full scale non qualified plan like a deferred comp plan or defined contribution plan. It could even be a disability program. It could be a long term care program all wrapped in these programs.
So it's all over the place and it's really based on what the company's needs are. So the company's needs, whether you're big or small, are how do I keep my good people around? How do I get people that are excited? So it's not always me, the company throwing out just more and more money at them, but utilizing tax laws, Department of Labor regs and ERISA regulations to make sure that the plans that are put in force for these people provide the best benefit for them. And so when we go through and we look at these things, a lot of companies are surprised that probably 50% of what we bring their people through, our total rewards or concierge programs have nothing to do with the company paying at all. We work with, for example, we work with the Department of Labor regs that have existed long before qualified plans and they came out of the old pension rules, but they still have the plans that allow participants to get qualified plan dollars out 100% tax free. And that's available from most providers. There's only one or two providers in America that don't allow their plans to be utilized in that fashion, which is, you know, I understand the background of, it's because they lose control of the assets and the participants take more controls. But if, if I'm somebody that has a 3, 4, 5 million dollar qualified plan and I want to get that money out tax free, those are people we talk with all the time. The other thing that that happens all the time is people will bring plans that maybe they've grown out of and they don't know how to get out of the plans. Maybe there's surrender fees or something like that that are locking them in or making them believe that they can't move their plan. So we get free audits to all our plans. Generally takes about two days. Small plan audit is going to generate an average of about $2 million back to the company shareholders. Midsize plan is going to be about 5 to 7 million dollars. But these are all real dollars. And so we look at the whole picture when we're talking total rewards, we're looking at the company's demographics and what it's going to mean to set up a plan properly. We're looking at the ownership, we're looking at the participants. Maybe it's a pass through, maybe it's a C corporation or not for profit. So whatever they are or however they're set up, we're going to go in there and not just show them a good plan, we're going to show them the best plan we Use a lot of AI, we use a lot of technology.
We've been recognized for that. And we have one tool in particular. It's called the heat map that compares every single life insurance against one another. So that when a company is implementing a plan or if they already have a plan and they don't feel it's doing well, then we will take a look at all the products that are available in the market space to make sure they have the best plan. And we do it on an annual basis to make sure product changes, tax law changes. We're always in there with the best products.
[00:18:49] Speaker A: So let's take a minute.
How would a business leader or business owner know if something isn't working well for them in a plan? You've mentioned that a few times to look at what's the best fit.
So what's a sign that you don't have a good plan?
[00:19:08] Speaker B: It's really easy. If the company's putting out more money every year or the same amount of money that they would be paying the participants, then they have a bad plan. It's not operating under all the tax rules and regulations that actually help them with these plans. If a participant doesn't know how much money they're going to need at retirement, then the plan is ineffective. And so when we go through and just kind of looking at that, so if I'm, if I'm a company and I've put in five, $10 million into a plan with participant deferrals going into it and it's not yielding a profit, I don't have access coming out of that plan. It's a bad design plan.
If I have, if I'm a participant and I can't get information on how to transition dollars as I'm getting ready to retire and then how to get that money out, either tax preferred or tax free at retirement, then I'm really in a bad relationship. And that's where really we're an RICP office, we're a registered investment retirement office. And so we look at things, we don't just look at things that really are related to the plan. We go outside of the plan. You know, if they have outside money that they've inherited from somebody, if they have qualified plans that, that we don't manage, we go into all those values to look at it and, and show them exactly how to get those dollars out in a much more favorable method. And, and so, you know, like I said, I'm from California. We have the worst tax hit in the country. And so any tax, any State tax program is going to be better. And a lot of people that come to us, they say, how do I get this money out without paying state taxes? And that type of thing. And there's been programs, rules on the books, on the IRS code for the last 35 years that enable you to do that. And so we look at all these things. Those things don't cost the company a dime. Those are really consultative type of programs that help people understand it and get the maximum out of it. That's why our plans, you know, the industry average participation rate is less than 40%.
We're well over 95% is because people know what's going on, companies understand them. Companies are fully putting as much money as they can into these programs because they operate in a tax free world once they get it set up properly. So it really does give the company and the participants 100% better place to look and understand what's going on.
The best conversations you can have is when you provide a report card. And we do that every year for every one of our participants so that they can share it at home with their spouse. The spouse sees us go to work every day and so they know we're okay. But when we retire, what's that going to mean? That's, that's pretty scary. And, you know, everybody knows that financial conversations are one of the biggest scary points in a marriage. Well, you want your spouse to know, you want to know, you want your tax advisors to know so that, you know, if I'm, if I'm reaching out to somebody like you, Linda, I'm going to want to make sure you're on the same page with us so that you understand what we're doing with that client of yours and to make sure that you guys are both getting the most out of it.
[00:22:11] Speaker A: And you know, as you talked about this, taxes are a big part of many decisions, right? Because once you pay out the taxes, the money's gone, right?
It's not ready to be reinvested or you can't use it. It's just gone. It's gone.
So being able to defer taxes and minimize them as well is, you know, is a strategy most business owners, executive companies, are looking for, for the executives themselves, what should they be asking when they evaluate benefit packages? And I don't know if I'm thinking about, you know, employee executives, you might hire your management team or if I'm thinking about the owner as well, because they're making choices about what to do with their money. That's part of what Balancing acts is about, you know, there's a lot of demands for time and money.
So how do you spend it? So what about that? What should they be asking?
[00:23:01] Speaker B: No, that's a great question. You know, there's an old math formula out there. It's been around for 100 years. You take a dollar, you double it every year for 20 years, you have a million dollars, you plug a 40 tax into it and now you have $12,000. It's going to take you a decade just to make up for the difference. And that's because of taxes. And so these are important conversations when we go in and we do our total rewards, live conversations with every participant. We show them how to get and maximize the human life value. Because yeah, when you pay taxes this year and you've got another 20, 30 years of life left, you didn't just pay taxes this year, you lost the ability, as you said, Linda, you lost the ability for those dollars to compound interest. They're out of your being.
And nobody knows this better than the IRS or the state tax auditors. They want that money. And so we work with folks that, let's say they're coming into retirement and they're too low, they're not going to have enough, they're not going to be able to support the expected 20, 30 years lifespan after retirement.
We help them get back on track. And we do this with a lot of either individual programs helping them with their investments so they understand real risk and real reward. A lot of people think that putting everything into the s and P500 is less risky than bonds. But if bonds don't keep up with inflation, if bonds don't keep up with cost of living, that is the most aggressive risk that you can have working against you. And so we help people understand all that, so that they understand and can mitigate the fears in their own personal lives and what they're doing. But then we target a number that they're going to have based on their, their current income so they know what it's going to mean for them today when they're doing any type of deferrals in a 401k or deferred comp or whatever it may be. And they know that if they're not taking matches from companies, how much they're losing or leaving on the table. And we want them to see that because people are such visual learners.
We want them to see that, understand that we want their spouses involved and again their tax advisors, attorneys, all these folks want them involved because that's the Only way they're going to get there. You're going to more than double your capability of retirement if you have this type of instruction. If you don't, sadly, America doesn't teach us in schools and so we don't really learn it that way. So we need assistance.
[00:25:13] Speaker A: And on that note, we're going to take a break in a moment, but when we come back, I do want to talk to you some about the platform, the technology and assessments you work with. I think it's great when, you know, executives feel secure their teams are. You talk to your spouse. It is a team sport planning which is very complicated. Bob, tell us how we can find you online.
[00:25:35] Speaker B: Well, if you're one of the senior executives or HR director, you can reach me directly. I prefer that I travel the world quite a bit, so, but my phone is always with me and that's 916-838-0866. If you want to go to our website and see a lot of learning guys out there and videos and, and we do it in a very simplistic fashion. We have them on cartoons so that people can pull it up and it's generally one or two minute videos. They can go to www.benefitrfp.com and they can track us down that way as well.
[00:26:05] Speaker A: Thank you so much and stay with us. When we come back, we're gonna talk more with Bob about different things you can do with executive benefits and retirement packages. Thank you.
[00:26:16] Speaker B: Thank you, Linda.
[00:26:33] Speaker A: Welcome back to this episode of Balancing Acts. We're talking to Bob, Nina Berg about Benefit rfp.
We've been talking about executive benefits, perks, tax savings, way to minimize taxes. I want to switch now to talking to Bob about his journey from being an author to an innovator and beyond running Benefit rfp. Bob's an award winning author with books now being adapted for film. His journey blends business, creativity and innovation. And of course on Balancing Acts, we're always interested in the entrepreneurial journey and how those of us, you know, pivot over the years and change and have long lasting, long term businesses. So Bob, what inspired you to start writing?
[00:27:24] Speaker B: You know, actually, you know, I'm one of those guys that usually sleeps four or five hours a night. So I read a lot. I read about 80 books a year and I write a lot and you know, it's my meditation really, but and I guess I've written about six or seven books on my own now. I've done chapters and, and co authored, you know, another dozen books.
One of my most recent books that came out was Rev Retention Revolution. And I didn't know it was going to be such a hot topic, but it became a number one bestseller on day one and it's just done great because you know, people really are concerned about how to keep their, their core team together. They want the culture that they have, that they've been building. They want to do all the right things. And that book helps you with that. So it takes you through a very simplistic guide of how to recruit, retain, reward the top people. We know that everybody comes in for their job from salaries, from the original money that's being given to them. But then what keeps them in their seats and prevents them from leaving are properly put together benefit programs. And so that's what we work on, that's what we focus on. And then you know, as far as when we get them in the door, what we do. And we're one of the largest providers of executive benefits in the country. We're a simplicity company. We have about 90 locations around the country and we just focus primarily on the highly compensated executives in these discussion.
We start with the owners down, the shareholders down, because it's got to be right for them. A plan has to be profitable. And this is something that I don't think people hear me until I say it about five or six times. A plan that's put together property will actually build a profit center for the company. And those dollars can be used by shareholders, those dollars can be used to better the plans like four 1Ks, maybe they're in a safe harbor plan that's not working well for them and they want to get away from that, they can do that. But we go through a full audit process. So if it's a new plan, we're going to do a live diagnostic, we're going to get you on the phone and we're going to take you through a quick 30 minute conversation about, you know, what plans you have and what you don't have so that we can have a report card to show you how you're doing against your competitors. And we use the benchmarking with it and then we start the discussion around your demographics. If you're a small company, mid sized company, large company, public, private, not for profit, doesn't matter. We're going to go through these steps and then we're going to come to the finish line, understand exactly what we need to put in place for you. And if you have a plan that's already in place, we're going to look at the asset liabilities. We're going to make sure it's producing profit. If it's not, we're going to get you out of that plan or recommend that you leave that plan so that you can have a plan that does the right things.
Plan that is not profitable for the company means it's probably not that productive for the participants as well. So you want to do it on both sides and even doing the cash flow on these things. A lot of times owners here, especially smaller companies here, oh my gosh, if I get to do something for, for executives, you know, where am I going to get the money? How am I going to get the money? What can I do to make this happen without me pulling out so much money? It's actually good news on this because it's actually less cash flow to build the plan out properly and to have it fully functioning at the best top levels for the participants.
It's cheaper to do it that way than the old fashioned way where we just pay them dollars, we just pay the money out the door because you lose a lot of tax benefits, you lose a lot of perks, you lose a lot of capabilities for these plans to grow and go. Once a plan is put together, we'll administer the whole plan. Any plan that we sell will administer it from top to bottom. We don't represent any carriers, we don't represent any investment firms. Our fiduciary is strictly on the side of the client.
And that's great news because most executive benefit plans today, the fiduciary from the wholesaler that's working with your broker is on the company that's selling you the products. And that's the absolute worst place it can be because they're not going to tell you what's the best stuff out there.
[00:31:20] Speaker A: I, and I completely agree with that. And I see that when you buy, you know, your, even your 401k plans through a payroll company, there, there's always, there's a middleman and you know, there's markups. So you're never quite sure what you're getting. But before you know, we, we go a little further into that. I want to go back to your books again because, you know, storytelling is a big buzzword now for every area of business. You know that storytelling to your ideal customer. And it's storytelling and you know, and how you message and it's everywhere.
[00:31:56] Speaker B: Right.
[00:31:57] Speaker A: And I, and I, of course I love Donald Miller's book storybrand, which I think many of us read. So your books, I think one of them is one or more is going to Become a film. So how does storytelling help how people understand finance and leadership? I know you have those explainer videos on your website, which are kind of fun to watch. And I do taxes for a living, so, you know, that's not exactly exciting either. So tell us how storytelling makes a difference to finance and leadership.
[00:32:29] Speaker B: Well, you know, I've done some. Some travels in my career. I go overseas, I go to the Middle east, and I've been behind enemy lines in a lot of weird situations, some dangerous situations, and I've written the books about them.
It's really based on the encounters or in some cases, on the historical side of the events that's taken place. And rather than just write a boring book like you said, being an executive benefit guy or a CPA is not always the most exciting things.
But if you do use storytelling, and I obviously use storytelling in the historical books that have done make them fun, I've got a couple that are going into the movie process right now. And so, you know, that's all fun stuff. But, yeah, you want to utilize that, too with your benefit programs. You want to use examples. You want to show them exactly the difference between where they're at right now and where they can be and help them live that dream of where they're going if they go the right direction. Because it does drive in, you know, a lot of great conversations.
Because, yeah, it can't just be dollars and cents. It's gotta be emotion. It's gotta have, you know, how your family's gonna feel, how you're gonna feel, how your kids are gonna feel. All these different things come into play that pure numbers can't. Can't even come close to demonstrating. So you want to incorporate both.
We learned that in a very weird way years ago. About 20 years ago, we did a live presentation for the Fortune 1000 company.
We had all but two of the Fortune 1000 companies on the call.
97% of the people on that call said they were about 30 to 50% knowledgeable on executive benefits, rules, how they work, all these things. And so what we did at that point, we said we got to make it easier. Because as you can imagine, if the Fortune 1000 doesn't understand these plans and how they work, where they have dedicated staff, when you go downstream to smaller companies and maybe you've got an owner that's wearing three hats or an HR person that's wearing multiple hats, they can't focus on this. So we simplified it. We. We took all the hard lifting. We put it behind the technology that we have we built a bunch of proprietary technology over the, over the years and we incorporated very simplistic films to it. I was lucky enough to write the Grammys plan years ago and in that process I met some of the folks from the south park team and, you know, coincidentally, they ended up doing our cartoons to simplify these presentations.
And you can go out to our website, which
[email protected] and you can pull up all these, these individual presentations and they're about a minute to two minutes long, but they're very impactful, they're very simplistic, they're very easy to follow.
And it just makes the, the process more fun again because if you don't understand how these plans work, you're never going to get it done for your people because, you know, it's scary if you don't understand it and you're expected, spend a bunch of money and you're worried about all these things, you'll never get to the finish line. And so we utilize, you know, all aspects of storytelling, of light videos, using the cartoon characters, everything. Our, our data, our technology, our total rewards program for our concierge programs for the participants so that it's simple. And that's why our, our, you know, participation rates are, are more than two and a half times the industry average. And you know, if you do it right, people should have fun again. This is money, this is fun, this is your retirement, this is your dreams and goals and this is what your people want to see and hear about. And, and you have to take the time to do this if you're an owner, if you're a senior executive or hiring people, because if you don't, you will have turnover. And turnover, unfortunately is very expensive on the lower end of hcs. It's three times the replacement cost of their salary.
So if I'm paying somebody 200 grand and they leave, it's going to cost me 600 grand to recruit, train, hire people. Hopefully the person that left didn't steal other people, didn't take clients with them, all these things. And so if you can lock that down, you eliminate that, the hidden cost and, or at least dramatically reduce it so that you can go on and be one of the prosperous companies that we read about all the time in the, in the news and newspapers and everything.
[00:36:41] Speaker A: Excellent, excellent point, excellent point.
Losing, losing your key people and losing employees is very painful.
Not even just the money, the time of retraining and getting them to understand your customers can be, it's very disruptive.
So we've Only a short time left on this segment, but innovation is a theme in both your writing and in your business and what drives your creativity.
[00:37:12] Speaker B: You know, I'm a very simplistic person. When I go out to the Internet, I'm looking for answers quickly. I'm looking to understand what's going on in an easy fashion that I can follow easy. And I do, you know, I do learn from audible conversations, obviously, but I also learn a lot better from visual conversations. And so we just try and make it very simple. That's part of our, one of our key mission statements is to make executive benefits easy, simple, you know, something that you can recommunicate back to your, your boards or back to your, your other partners or whoever is involved in these plans. And then we want you to understand, forget about all the rules because that's all kind of behind the scenes stuff. But we're going to give you the perks and show you all the things that you can do so that when you are making the decision, you're making them based on everything you understand. You don't have to remember the regs, you don't have to remember all the rules that are behind this. You don't have to remember all the things that Congress does on a regular basis to change these rules and to make it more favorable. We do all that for you, but you'll have the benefits of seeing all what those perks mean and what it means to both the owners and the participants.
[00:38:20] Speaker A: Excellent. You have a fascinating journey from, you know, shaping executive benefits, actually working with the government on shaping all those complicated rules and to stories on the big screen and your book. So I'm very inspired and I can't wait to actually pull up, get one of your books. Let us know how we can find you online if someone wants to follow you. Sure.
[00:38:43] Speaker B: Well, for the books you can, you can just put in my name and type in American Bloodline or Retention Revolution or Blur or any of the books will come up on. As far as if you're a senior executive and I always give my cell phone out to the senior execration that's going to be on the design team or maybe the Chro or HR person because they're going to have the most questions, especially if you're going through reevaluating a plan that you have already or trying to implement a new plan. My direct number is 916-838-0866. I travel the world so that phone's always with me. It's the best way to catch me if you want to get in touch with my team, you can go out to benefitrfp.com and just, you know, plug away on the website. Get, get a lot of your questions answered. But, you know, don't be shy and don't be, don't be fearful of these, these programs. They actually are money makers for you. We want you to get all that out of it.
[00:39:33] Speaker A: Thank you, Bob. We'll be back in a moment. Stay with us. And we're going to have Bob one more time talk to us about Lessons from the Boardroom. Stay with us. Bob always has great information to share with us.
[00:39:45] Speaker B: Thank you. L.
Foreign.
[00:40:01] Speaker A: Welcome back to Balancing acts. I'm your host, Linda Hamilton, a CPA and certified exit planning advisor. And we're talking with Bob Neineber about executive benefits plans. If you love what you're watching, you can catch Balancing Acts and all the Now Media shows on Now Media.
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You can get the free Now Media TV app. Just search for that and you can get business, news, lifestyle and culture all in English and Spanish. 24. 7. So start watching now Media TV and watch today.
Bob, we've been, we've had a great conversation. There's so many things we covered. And I know you also advise boards across the country on financial matters. And, you know, so that experience gives you a very unique view about, you know, how strategy, risk and leadership all kind of come together and connect.
What are some common challenges you see boards facing when it comes to executive compensation and benefits?
[00:41:03] Speaker B: Oh, great question. The. Yeah. You know, it's funny, in my business, I've, I've worked with, I think, you know, I'm on like 140 companies right now from an advisory position. I serve as a board member for colleges and for other companies and all that.
And I've had, you know, both the experience of working with Congress for the last 25, 30 years, in the last four or five white houses. And so, you know, when you give that advice and when you start to package this stuff up, you realize you start to learn that the customers that we're serving a lot of times really don't understand it, whether it's a huge company or a very small company. And so, you know, I'll give you an example. I'm big on storytelling, as we were talking about a little bit ago. And one of the things that I can tell you is one of the companies that I was brought in about 20 years ago, they were a private company.
They were, you know, worth maybe about $50 million, but there wasn't a lot of profit. And that's a very common thing to run into. But in the meantime, they had already set up an executive benefit plan that nobody in the company was going to receive any great results of. In fact, the person that sold it made the most results, and that's really a disappointment. And so we got in there and we looked at it and we did our audit, went through everything, redesigned a plan based on what the demographics were of the organization, what they were trying to achieve, and then we started enrolling the plan. And the participants were absolutely 100% suspicious of me and my team when we came in, because they had been through 10 years of a plan that did nothing for anybody. And so we got in there, we changed the plan dramatically. We changed the product. We put in corporate, commercial products that enable the company to profit on the plan from day one. And this is something that most people don't realize, that without a plan, you're paying a lot more money. With a plan, you're paying a lot less money, and you're receiving the government perks as long as the gut. The plan is set up properly. So we got in there, we built out a plan. They now have two legacy groups at Legacy One, which were the original plan that we put together. And now the company's grown so, so large. It's now about a 350, $400 million company.
It's doing fantastic. And the biggest thing that ownership cites is, is the. The addition of having a plan because they've kept their culture all intact. They've got the right people on. On their management team that they want to have in place. And people love the plan, and that's kind of the glue that holds it all together.
But a lot of times we'll have. We'll have companies. You know, it's always great to go in and have those success stories, right? And so those are always fun. But we'll also have companies that'll come to us that they're in a net operating loss and they're just building a company and they don't know how to build, put together a plan. A lot of them make the mistake of buying a phantom plan. A phantom plan is probably the most expensive plan you get into for the longevity of any plans. And most participants don't even feel that they're real because there's nothing behind them. They're not taking advantage of anything, and they're actually hurting themselves. So if you have people that are suspicious or they feel like they're not going to get out of anything out of the company long term, they will leave. And, and especially if you're in a high tax state where you need a plan to help them reduce their taxes both while they're working as well as when they transition into retirement and then into the retirement years, they have to leave because they have to go somewhere else to find a company that's going to support all these, these processes in their life. And both are related. You, you can't do one and not the other. You can't make it great for the company, not good for the participants. You can't make it great for the participants and not good for the company. So they have to be tied together.
But when you do it right, you use the technology, you go into the board meetings and you simply are given the reports as to, you know, here's what you had, here's where you're at, here's where you're going.
Boards love it. Even the most sophisticated companies out there, their treasury departments will take me aside and say, I really don't understand this stuff. Can you really help me with this stuff? And so if you feel lost, if you feel you're a little company, if you're afraid to make that first call because you think it's going to be expensive or somebody's going to push you hard to sell, we don't do any of that. We simply educate by showing you and demonstrating for you, telling your story, helping you so you can tell the story to your top people and keeping everything going the right direction so that you are one of the winning companies that.
[00:45:26] Speaker A: Has everything locked together and that's so, so important. And I think, you know, benefit plans are incredibly complicated. What I do in tax, taxes are complicated. Not even close to, to benefit plans, I think. But on another aspect of tax planning and is succession planning, does succession planning come up in your conversations with companies and, and how much before, you know, this accession is in motion? Do we have to talk about it?
[00:45:57] Speaker B: Yeah, it comes up quite a bit. A lot of times it'll come up primarily, of course, from private companies.
Owners are looking at, you know, how do I, how do I transition and get my money out of this company I built? Because that's where, you know, the majority of the retirement or income is, how do I do this without living a legacy of risk that I'm going to have after I walked out of this in 20 years and have to get called back when I'm 80 to fix something?
All these things are great worries. We do, we Utilize all kinds of different plan designs for succession planning. We also do it for estate planning. You know, the bulk of our folks that we work with are the highest paid folks in the country.
And for CEOs especially, they, they might walk out with 5, 10, $20 million of stock in their plans. And they're looking for estate planning help, they're looking for direction on that. So as a registered retirement income specialist, we're looking at these things with them and, and we're working with their team. If they have investors already, that's fine. You don't have to get rid of your investor.
If you have a CPA or a tax attorney, we're going to work with them to make sure they're all completely at the same level of understanding that the participants need to be to make this a successful endeavor and, you know, keeping those people long term. You know, I'm big on culture. I love seeing people have teams that last forever. And so Linda, I'm guessing your best clients are people that have worked with you for the last 20, 25 years. They get you, you get them, you understand it. That's the culture you want to have. And then, then the rest becomes emotional. What are you going to do with the money? You know, how are your kids going to feel that they're going to get an extra 5, $10 million because you plan properly that they probably wouldn't have gotten otherwise? How are you going to feel when you recover 5, 10, $20 million that you paid on taxes in the past that we can help you re recover and put back into your compoundable state?
These are all real conversations.
And then, you know, we just put it together and have fun with it.
[00:47:53] Speaker A: It's absolutely right. They're critically important because if you don't, if you don't have them, it's very hard to change things at the last minute and.
[00:48:03] Speaker B: Oh, completely.
[00:48:04] Speaker A: Right.
You know, even with tax planning, once the year is over, I can't. Other than maybe, you know, one of those retirement plans where you can open after the year, you can't change anything right now.
[00:48:17] Speaker B: Once that can's been kicked, it's done. And as you know, and you just stated perfectly, once it's done, it's done. It's, it's really hard to go back. We do have some programs that can do some relooks, but they're, it's harder that way. If, if you're thinking about retiring in the next three to five years, that's when you should have these conversations both with your cpa, tax Advisors, you know, attorneys, folks like myself. That's when these conversations should be had. We have, you know, I Talked about the DOL926 earlier.
That enables participants to get money out tax free from any corporate qualified plan. And most people look at that and they say, you can't do that legally. That's some opinion letter. It's going to get me in trouble, it's going to get me sued. We've never had a lawsuit. We've never had a participant or client complaint. We've never had a lost audit. So we don't get outside and use opinion letters that we hear and read about so much that causes people just the worst headaches.
Found out by the people in your position, Linda, that what are you doing here? You can't do this, you know, and the IRS is not forgiving, so you got to do it right and you can't take chances.
[00:49:20] Speaker A: Exactly. You do have to do it right. So what advice would you give to business owners who are maybe first starting their journey on retirement?
Will, can small, you know, what's the smallest businesses that can come and learn from Benefit RP or, you know, other resources they can get if they're just getting started on this journey of growing their companies and tax savings?
[00:49:45] Speaker B: Well, it's, it, as you know, it's an open, it's an open whiteboard. You can make the plan do whatever it needs to do. So if it's for one person, a business owner, or a thousand people that are participants and we have different levels and we got to use a tiered plan or whatever it might be, the, the biggest step, the scary step, is always to reach out first.
Don't be afraid that you're going to ask stupid questions. There are no stupid questions. And you know, everybody, even the largest companies on the face of the planet have the same questions. I remember I was dealing with the largest company in the world a couple years ago and we, we got off a call and they called me and they said, can you really do this? I didn't know you could do this 100%. We took them to the tax code where it exists, the whole thing. So these are very complex conversations and we spend a lot of time and money and effort on our team to really utilize technology, AI service. We have a dedicated service platform that's won international service and awards on this stuff for I don't even know how many years.
We utilize all that stuff to make it an easy, fun process for people. But most importantly, always remember, we can't do anything with you for you, we can't help you if you don't make that call. So don't be afraid of asking the questions. Even if you're a big hotshot on TV all the time on this stuff. Call us, ask us the questions, we'll get you through it. It's a private conversation. Nobody needs to know about it. And, you know, you can ask your questions and feel comfortable. And the most important thing is to get those answers you're looking for and to get it done properly.
[00:51:17] Speaker A: And on that note, how can people call you and find your website?
[00:51:23] Speaker B: Well, if you're a senior executive, you can always reach out to me. I'm international, so I travel quite a bit. But you can reach me at 916-838-0866.
Or if you want to go into our site and play around with the videos. We have a lot of videos that south park is their team, was our cartoon team that, that built these for us. Just to simplify things. They're like one or two minute cartoons on how this stuff works, are designed to be simple and fun. But you can go in there and watch those at, at our
[email protected] and, you know, write down all your questions, get all your questions, call me and we'll make sure you're, you're well taken care of.
[00:52:02] Speaker A: Thank you so much. And what I want our audience to realize is that, you know, we talked about boards and some larger companies do have boards. Small companies don't always have boards, but you can put together an advisory board, you can find the right team and outside your cpa, a lawyer, someone like Bob to help you understand what benefits are available. But do take that step because financial security and foresight in debt, planning for the future can make all the difference to building a profitable, resilient company. I hope you'll join us again next week for another episode of Balancing Acts.
[00:52:37] Speaker B: Thank you, Linda.
[00:52:38] Speaker A: Thank you, Bob.
[00:52:43] Speaker B: This has been a NOW Media Network's feature presentation. All rights reserved.
