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Nationwide News: Nationwide helps farmers grow retirement plans

Issue Date: April 15, 2020
By George W. Schein

Are you ready for the new state retirement plan mandate that may apply to you as soon as this coming July? Nationwide may be able to help.

Nationwide is partnering with the California Farm Bureau Federation in the creation of a new multiple employer retirement plan, or MEP, that is available to all CFBF members with employees, even those that already sponsor a retirement plan.

This MEP provides a cost-efficient method to comply with the new law that begins to apply in 2020 to California employers with more than 100 employees. The law will expand and apply to smaller employers during the next two years so that by 2022, all California employers with five or more employees will be required to either:

1) Sponsor their own retirement plan, e.g., a SIMPLE IRA, SEP IRA or 401(k), or

2) Facilitate automatic payroll deduction to enroll their employees in the CalSavers retirement program.

Those employers who do not comply will be subject to significant penalties, based on their employee headcount.

CFBF members who join this MEP will not only comply with the California law, but will also be able to take advantage of federal tax incentives available to employers that provide a retirement plan for their employees.

In addition, CFBF members will be providing their employees the opportunity to save for retirement with the help of Nationwide, which was recently recognized by both J.D. Power and DALBAR as a leading retirement plan provider. These national recognitions are attributable to Nationwide's Retirement Resource Group, which includes more than 20 licensed retirement specialists who provide one-on-one financial planning not only on retirement, but also on healthcare costs, Social Security and more. Another differentiator is Nationwide's robust foreign language capabilities to provide verbal and written retirement plan information in employees' native languages.

Nationwide is a perfect partner for CFBF because since its founding, helping protect the agricultural community has been a main priority. In fact, Nationwide was created by the Ohio Farm Bureau. Originally named the "Farm Bureau Mutual Automobile Insurance Company," it quickly spread from Ohio to several other states and changed its name to reflect its intent to sell insurance products "nationwide." Today, as the No. 1 writer of agricultural insurance in the country, Nationwide has more than met its goal.

As Nationwide expanded geographically, it also expanded the insurance products and services it offers its members and eventually, with the creation of Nationwide Financial, into financial services. Like the growth of Nationwide's agricultural insurance business, Nationwide Financial also quickly expanded.

Today, Nationwide Financial manages more than $143 billion in assets for more than 2.5 million participants in over 37,000 retirement plans. Those numbers include $27 billion in assets attributable to 2,500 retirement plans in California, where approximately 1,200 Nationwide associates live and work.

Based on its agricultural heritage and its solid presence in California, Nationwide is uniquely positioned to help protect the retirement futures of CFBF members. Those who opt to join this newly established MEP will be able to take advantage of:

• Lower costs because of the economies of scale realized through the pooling of all participating employees' assets, and the sharing of fiduciary services;

• Simplified administration because of the need to file only a single Form 5500, and correspondingly to conduct only one plan audit for all CFBF members of the MEP;

• Shared ERISA 3(16) plan administration and ERISA 3(38) investment management.

It follows that employees of all CFBF members who join the MEP will also share the same investment line-up. Notwithstanding the common investments, each employer that joins the MEP will still be able to offer a customized plan design that it chooses and best meets its own needs.

CFBF members who do not already sponsor a retirement plan for their employees are able to join this MEP, and those who sponsor an existing plan are also able to transfer plan assets into the MEP without any negative financial or tax consequences for themselves or their employee-participants.

For more information on the benefits of this new MEP offered through the CFBF partnership with Nationwide, consider joining one of the following webinars/teleconferences:

• April 20, 1:30-2:30 p.m. From computer, tablet or smartphone: Via phone, call 872-240-3212; access code: 511-739-269.

• April 23, 9-10 a.m. From computer, tablet or smartphone: meeting-session-2 Via phone, call 646-749-3122; access code: 554-071-341

You may also contact the following Nationwide Financial representatives in Private Sector Retirement Plans for more information:

• Paul Yossem, regional vice president, 858-997-8863;

• Aaron Barton, regional internal consultant, 614-435-4705;

(George W. Schein is with the Nationwide Advanced Consulting Group.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.

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