Prospecting the Federal Form 5500 – Identifying your Client
December 17, 2018

Using 5500 Data for Offensive and Defense Business Development (Part 1)

This article is the first in a five-part series devoted to helping you more effectively use the 5500 for prospecting. By the end of this series, you will learn:

  • Steps to locate viable new business
  • Defense strategies for your book of business
  • How to approach your first meeting with a potential client

Identify your Clients

There are over 1 million ERISA qualified plans active nationwide each year. Nearly 800,000 plans in the retirement space alone. Finding the plans that fit well into your business model can seem like a daunting task. The first step in business development is often research. Here are 3 questions to ask yourself:

Who Are My Current Clients?

Knowing who you currently work with is a great indicator of where you should be looking for new business. Consequently, as no one knows your client’s as well as you, it is always a good idea to dig deeper and see if there are unifying traits that you may not be aware of. The 5500 form provides a ton of information that, when analyzed, can reveal trends and traits that may not have been uncovered by your face-to-face interactions.

What Are My Strengths?

Properly identifying your skill set is imperative when planning your prospecting. Perhaps you are a good educator and skilled at letting employees know the value of their plan. Maybe you are a data wonk and are skilled at identifying trends in large pools of data. You may have spent years in the 401(k) market and are known in your region for strong 401(k) performance.

Who Looks Like My Current Customers?

A good place to start are those categories of sponsors that are similar to what you work with and blend well with your strengths. Therefore, if you can find sponsors who resemble your client base, sponsors that also may have an unhealthy plan, you have yourself a beginning of a great lead list.


The Retirement Plan Prospector database was designed not only as a lead generation service but as a tool to help you identify trends in large datasets.


Find the second post in this series Here!

Posted in: Blog
 | Tags: , , ,
One Form 5500, Two Industries
December 10, 2018

Retirement vs. Health & Welfare when Examining 5500 Data

This article is going to focus on how the disclosure differs for two distinct industries, retirement and welfare. Sponsors fill out a different Form 5500 for these plans and may even file a separate 5500 for multiple types of retirement or welfare plans. A great example is that a Sponsor might have a defined benefit plan and a defined contribution plan. That would result in two different filings with the Department of Labor.

Despite being utilized by both retirement and welfare plans, 5500 data has a lot in common between these two distinct groups. The sponsors who file are primarily private sector employers. That means that government agencies and employers are exempt, whether it’s at the city, county, state, or federal level. There’s a gray area when it comes to non-profits. Those organizations typically file a Form 990 about their expenses and funding, but not a Form 5500. They can elect to file if they feel it is advantageous for them to do so. It’s always worth a shot to search for them!

Many Schedules are filled out by both retirement and welfare plans. The publicly disclosed Schedules are A, MB, SB, C, D, G, H, I, and R. Not every plan files each Schedule though. It depends on the services utilized by the plan, its funding, and how it’s structured. Below we discuss some of the significant differences between the two plans. Most of us are solidly working within one industry, such as retirement, so you can jump to the section that applies to you.

Retirement Plans

You may have noticed while researching prospects that a behemoth like Acme Explosives disclosed their schedule of assets, an auditor’s report, their annuity carrier and vendors like their record keeper, yet Mom & Pop Shop USA has none of that. Absolutely maddening!

What you’re seeing is the Form 5500-SF, an abbreviated version of the Form 5500. In 2009 the DOL created a short form version of the 5500 to reduce the burden on companies with under 100 participants. With the exception of the Schedule SB, filed by smaller defined benefit plans, sponsors are not required to fill out schedules.

The Schedule A

If a plan has an insurance contract, they need to complete this Schedule. It’s where a carrier and their brokers are disclosed. When disclosing annuity contracts, they fill out Part II for the value of their investments.

The Schedule C

Retirement plans often use this Schedule to list their record keepers, brokers, investment managers, accounts, and so on. Section 2 is where service codes describe what they’ve been compensated for and we can see how much they received. Retirement plans are also more likely to make use of Sections 1 and 3, where we can see if a provider was eligible for indirect compensation and the formula for it.

The Schedule H

Only plans with over 100 participants file this Schedule. It has the same financial disclosure questions as the Form 5500-SF yet many more. You’ve probably heard that these filings also have a Schedule of Assets. As of 2018, the DOL doesn’t have a standard document for this supplementary Schedule. Instead, Sponsors submit attachments which are viewed as PDFs. These are always available in the Retirement Plan Prospector tool once you are looking at the Plan Details pages.

Health & Welfare Plans

Health and welfare plans can cover a wide variety of benefits. As long as they’re ERISA-qualified, it’s likely you can find it. Unlike with retirement plans, the minimum to file is 100 participants. Note, it’s not employees, but the number of individuals in a plan. If a sponsor has under 100 participants in their plan, then they’re exempt from filing a Form 5500.

The Schedule A

Like many of the Schedules, this one can be filled out by both retirement and health and welfare plans. On welfare returns, the Schedule A is often the star. Plans with insurance policies file this schedule and report the carrier, lives covered, premiums, benefits insured, and, if applicable, the brokers who sold the policy.

The Schedule C

When a welfare plan has organizations or individuals who are not insuring benefits, yet providing services to the plan, they’re disclosed here. The most commonly filled out Section is 2, where we see provider service codes and compensation values. Typically this includes third-party administrators, consultants, ASOs, and accountants. Users who work with self-funded plans make more use of this Schedule because it provides clues as to how the plan is managing their benefits.

The Schedule H

Unlike retirement plans, this isn’t as commonly filed. Roughly 10% of the plans in American Directory of Group Insurance have this Schedule. The general rule of thumb, when a plan is unfunded, they’ll file a Schedule H.


Posted in: Blog
 | Tags: , , ,
The History of the Employee Retirement Income Savings Act (ERISA)
December 03, 2018

The Early Days of Pension Plans

Private pension plans had been around in various forms since the early 1890s, but first real regulation of pension plans came with the Revenue Acts of 1921, 1926, and 1928, which included three major provisions that helped define retirement plans as we know them today. These acts allowed corporations to deduct contributions made to pension plans from their reported income, and allowed pension funds to accumulate income tax-free, and deferred taxes on the participants until the pension was distributed. These benefits were accompanied by discrimination testing and financial audit requirements.

One of catalysts that led to the enactment of ERISA was the closure of the Studebaker-Packard Corporation car manufacturing plant in South Bend, IN in 1963. The pension had promised generous benefits for the participants, but the plan was severely underfunded and wasn’t able to cover the benefits for many of the employees vested in the plan. The failure of the Studebaker pension plan, along with a high profile conviction of infamous Teamsters boss James Hoffa on pension fraud, drew a lot of attention to pension plan corruption and mismanagement and spurred talk of reform and regulation in Washington, DC.

The Introduction of ERISA

It took ten years for ERISA to come to fruition after the Studebaker pension failure. Senator Vance Hartke of Indiana (not coincidentally the state where the Studebaker plant was located) was the first to propose new legislation in 1965 that would provide for pension insurance and create the Pension Benefit Guaranty Corporation (PBGC) to collect the premiums from insured pension plans. The PBGC would pay out if a pension plan were to close and not have the funding to cover the amount owed to participants in the plan. Senator Jacob Javits was the architect of the main ERISA law, as he sponsored a number of different laws in the late 1960s that would later become key components of the final version of ERISA, with regulations touching on participation, vesting, funding, reporting, and disclosure rules for private pension plans.

Companies and labor unions both fought the passage of new regulations for pension plans, uneager to take on the challenge of more closely monitoring their pension offerings. Faced with the prospect of states enacting different sets of pension regulations that would have proved difficult for many companies who operated in multiple states to navigate, businesses warmed to the idea of national pension regulations. ERISA was passed by both houses of Congress by March 1974 and was ultimately signed into law in September 1974 by Gerald Ford.

“Who’s Who” and “What’s What”

The act gave regulating power to three agencies: the IRS, the PBGC and what is now known as the Employee Benefit Security Administration, or EBSA. As of the 2016 filing year, ERISA covers over 700,000 retirement plans and over 50 million active plan participants.

The Form 5500 was created by these three agencies to collect the disclosure information required by ERISA, and is the source of the vast majority of the data you’ll get from Judy Diamond Associates’ prospecting tools.

Posted in: Blog
 | Tags: , ,