I delivered a retirement benefits presentation to the staff members of a new client, who had recently concluded an agreement to commence a retirement savings plan and insured risk-benefit scheme for their employees. We suggested that we meet with the staff to assess the level of interest in this new offering. The staff participated enthusiastically, with some questioning the necessity of the new arrangement, while others were intrigued about how the benefits worked and whether they added value to them. Some questions were more complex, relating to the selection of investment managers, investment costs and performance of the recommended investment strategy.

Let’s understand the role of a retirement/employee benefit consultant

Benefits consulting is more than negotiating with insurance companies, presenting renewals, and tweaking cost-sharing. From an employer’s perspective, it’s essential to work with a flexible provider to cater to the needs that are unique to your company. Suppose you contract with an appropriate consulting company; in that case, you’ll have an employee benefits strategy that is compelling for recruiting and retaining employees, maximises employee health and wellbeing, and is aligned with your financial objectives.

No company hires only once a year; therefore, depending on your current solution, you might need more flexible options that provide room for your business to grow and ensure that new employees are not forgotten. It’s essential to find a solution that includes year-round support for employees for questions, comments, and concerns; your appointed consulting services company will also be able to provide this service in several languages.

An accomplished employee benefits consulting company should, at a minimum, perform the following services/functions:

• Retirement plan selection: If a company plans to offer a retirement plan to its employees for the first time, retirement benefit consultants should perform member presentations explaining the proposed fund structure and benefits.
• Plan changes: Retirement benefit consultants can also offer guidance on making changes to an existing retirement plan or changing to a new type of plan altogether.
• Investment oversight: Retirement benefit consulting services can include managing the plan’s investments, preferably with an independent investment consultant, ensuring they align with the member’s and employer’s objectives and goals.
• Plan documentation: A retirement plan consultant can help with creating key documents related to the plan, including an investment policy statement. This document outlines the goals and objectives of the plan and the steps the plan manager will take to achieve them.
• Plan participant/member education: Retirement benefit consultants can take responsibility for educating employees about the plan benefits and how to participate; this should be ongoing and is particularly useful when new employees join the company.
• Governance and compliance: Advise members and employers on the laws and regulations governing certain benefits.
• Communication: Assist the employer with written member communication and presentations should a transfer to another fund be required and all other requirements such as notification of termination to current service providers.
• Administration: Assist the employer with administrative duties, including medical underwriting requirements, claims etc.
• Member queries: Attend to general member queries and product-related queries.
• Management Committee: Assist the employer with the nomination and election of member representatives to the employer/member representative (management) committee. While these committees are not a legal requirement, they form an essential support and communication function for the employer, members of the fund, and the fund itself.
• Meetings: Arrange a management meeting (at least one per annum) to discuss fund matters and perform secretarial functions (recording of minutes).

The importance of independent advice

An independent benefits consultant can present clients with potential solutions of what they believe will best suit the client’s needs without being restricted to a specific provider/s. This means independent consultants have a wide array of service providers and products at their disposal, which can be considered in the advice process.

The key difference between independent consultants and tied agents is that tied agents can only offer you products offered by the company that employs them. The tied agent will be limited to formulating their advice using this specific product suite.