Leadership In Law Podcast

09 Choosing the Right Retirement Plan for Your Team

• Marilyn Jenkins • Season 1 • Episode 9

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Can strategically designed retirement benefits be the key to attracting and retaining top talent in your law firm? Discover the untapped potential of retirement planning as we host Courtney Shipley, founder and chief planologist of Retirement Planology, on this episode of Leadership in Law. Courtney takes us through her fascinating journey from a music performance major to becoming a leading authority in retirement planning. She reveals the critical importance of offering comprehensive retirement plans and the significant tax advantages they bring. Through her expert insights, learn how well-crafted retirement benefits not only help secure the future for your employees but also align seamlessly with your firm's business goals.

Explore the specifics of retirement plan designs tailored for small and midsize firms, with practical examples like 3% non-elective contributions and dollar-for-dollar matches up to 4%. Courtney explains how such strategies can help bypass complex IRS tests and rules, making them ideal for firms with six to twelve employees. We also delve into the vital role of employee education in optimizing these plans and the responsibilities of HR, controllers, and outsourced HR professionals in their implementation. If you're seeking to start or revamp your firm's retirement plan, this episode offers invaluable steps and resources to get you on the right track. Join us for a deep dive into how retirement benefits can drive your firm's success.

Courtenay Shipley is the founder and Chief Planologist of Retirement
Planology, a consulting and registered investment advisory firm for
corporate-sponsored retirement plans. With a wealth of experience in the
retirement plan industry, Courtenay not only offers her clients expertise in
investment analysis, plan design, and employee education, but also helps
them leverage their employee benefits in a way that supports their own
business goals. She has worked with qualified retirement plans, developed
strategies for third-party administrators, and conducted over 10,000
educational meetings. Courtenay holds various designations including
Accredited Investment FiduciaryTM, Chartered Retirement Plan Specialist,
Certified Plan Fiduciary Advisor, and Certified Exit Planning Advisor. She is
also the esteemed president of the Retirement Advisor Council, and her
outstanding contributions have earned her accolades such as Top Women
Advisor, NAPA Young Gun, and FT Top 401 Advisor.

https://www.retirementplanology.com/


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Speaker 1:

Welcome to the Leadership in Law podcast with host Marilyn Jenkins. Cut through the noise, get actionable insights and inspiring stories delivered straight to your ears your ultimate podcast for navigating the ever-changing world of law firm ownership. In each episode, we dive deep into the critical topics that matter most to you, from unlocking explosive growth to building a thriving team. We connect you with successful firm leaders and industry experts who share their proven strategies and hard-won wisdom. So, whether you're a seasoned leader or just starting your journey as a law firm owner, the Leadership in Law podcast is here to equip you with the knowledge and tools you need to build a successful and fulfilling legal practice.

Speaker 2:

Welcome to another episode of the Leadership in Law podcast. I'm your host, marilyn Jenkins. Please join me in welcoming my guest, courtney Shipley, to the show today. Courtney Shipley is the founder and chief planologist of Retirement Planology, a consulting and registered investment advisory firm for corporate-sponsored retirement plans. With a wealth of experience in the retirement plan industry, courtney not only offers her clients expertise in investment analysis, plan design and employee education, but also helps them leverage their employee benefits in a way that supports their own business goals. She has worked with qualified retirement plans, developed strategies for third-party administrators and conducted over 10,000 educational meetings. And conducted over 10,000 educational meetings. Courtney holds various designations, including accredited investment fiduciary, chartered retirement plan specialist, certified plan fiduciary advisor and certified exit planning advisor. She's also the esteemed president of Retirement Advisor Council and her outstanding contributions have earned her accolades such as top woman advisor, napa Young Gun and FT Top 401 Advisor. Wow, I'm excited to have you here, courtney.

Speaker 3:

Thank you Welcome. Thank you so much. I'm excited to be here.

Speaker 2:

That's incredibly impressive. Tell me your backstory. How did you get started and what are you doing?

Speaker 3:

Well, I got started kind of on accident. I have a degree in music performance, and when it came time to graduate from college, I needed a job, and so I interviewed for the Career Center and landed at an insurance company that also helped school teachers with their retirement planning. And I thought, you know, I love everything about this retirement and investing side of things. How do I never sell insurance again? Not that there's anything wrong with that, it just wasn't for me. And so then my career kind of took the steady path of helping employees figure out their retirement and what that's going to look like for them with their corporate sponsored account. So that's where I am today.

Speaker 2:

Okay, excellent. So we're talking about leveraging retirement benefits for employee retaining employees, that sort of thing, and helping, say, a law firm set up a retirement plan. How would you begin about that? What would be your requirements to get started? Size firm, that sort of thing would probably be a good idea.

Speaker 3:

So why would you want to start a retirement plan for your employees, or why would you want to even look at the one you already have in place? Because many are set and forget right. The reason would be because I think at this point it's table stakes for a lot of employees. They expect to have some way to have health insurance, some way to save for retirement, maybe some short-term, long-term disability. Those types of benefits and having a 401k or having some sort of retirement plan in place is valuable in attracting and then retaining the talent that you want. So that would be the purpose behind it. But when you go to start it, you have to think about what do we want this plan to do? Like it's not just enough for it to say we need to have it and have it in place, but rather what should this? Just enough for it to say we need to have it and have it in place, but rather what should this also do for the business?

Speaker 3:

And it could be that the managing partners are like you know what? We've spent all of our time and money building this firm. We haven't given two thoughts about our own retirement. We need to get something in place for us, and, as a byproduct of that, our employees get access to it too. It could be that they're finally at a tax situation where they're pretty profitable and they want to either give back to employees or just help to offset the type of taxes that they have to pay from an income standpoint. It could also be that they really have some important level employees Maybe they're not partners, or maybe they're just. Maybe they're non-equity partners, or maybe it's the support staff that they just could not live without that they want to make sure are rewarded in a certain way, and so this plays a role in that as well. So there's all these different types of reasons why you would want to offer the plan and then what you want that plan to do. So that's, that's step one when it comes to thinking about offering something for your employees.

Speaker 2:

Okay. And yet, after hearing about all the quiet quitting and that sort of thing over the last few years, when you have an A player on the team, you want to make sure that you have something that'll keep them, and I think people are looking for something beyond just salary right now. You know the advantage or the benefits that they can look forward to the future, absolutely. And how do you so? You would start with, like, the partners. A lot of the times you do it start with partners and then it just trickles down through the company like you're talking about. So it becomes something that the partners that okay, now we need to do something and it's tax advantageous for them to bring in the employees on the program.

Speaker 3:

Yeah, and so most of these types of programs you're going to have to include your employees in. If it's a small business, you have the option of the SEP IRA and you can work with your accountant on that to figure out how much you could set aside, and with a SEP IRA, what you give yourself, you also have to give the same proportion to all of your employees. So if you are able to put 25% of your income away, then you would have to provide that for your employees too. So it tends to be a little bit more expensive but can work really well in just like a very small firm setup. The next option would be a simple IRA where they can, everybody has their own. It's like a souped up IRA it's a large IRA, if you will where everybody has their own. It's like a souped up IRA it's a large IRA, if you will where it has a higher limit.

Speaker 3:

The employer is responsible for either making a matching contribution or a small contribution to everybody's account, whether they contribute or not, and then, once you outgrow those, the 401k plan is typically what you see happen next. And with the 401k plan it's a trust, so you have some fiduciary responsibility for overseeing it and making sure that you're making good decisions in the best benefit of your employees, you are safeguarding things and you're making good decisions overall. There is a lot more flexibility, though, with that one, because you can set different parameters around eligibility. You can set different parameters about vesting. So if you make an employer match or employer contribution and your employee quits tomorrow, could they take all of that with them, or would they have to have worked for you for a certain amount of years? So you know, with more complexity comes more rules, and the IRS and DOM are more involved.

Speaker 3:

So once you step out of that IRA world and into the 401k world, it does get more complicated, but you do have the ability to really tailor that plan to your employer base or employee base, rather your demographics, what kinds of purposes you want the plan to serve. And so that's where we come in is to help you slice and dice that and figure out what the best setup for the plan looks like. And then how's? Where we come in is to help you slice and dice that and figure out what the best setup for the plan looks like. And then how do we keep it going forward? And for many of your maybe your larger listeners, larger firm listeners. You may already have something in place, but it might've been something that was put in place years ago, when things were different, and so these plans do change and evolve over time, as your business changes and evolves over time too.

Speaker 2:

OK, all right, excellent. And what is the ideal size? To start looking at this?

Speaker 3:

You should have a.

Speaker 2:

Or would you say profitability.

Speaker 3:

Yeah, it's just what I would say. Most firms we don't see them putting a 401k plan in place until you get above about 10 employees. In general, the smaller plans that I mentioned before, like the SEP and the simple IRA, tend to be easier to administer for smaller firms. But when you do grow into that 401k you get the profit sharing piece so you can make a discretionary profit sharing contribution at the end of the year and many firms like that flexibility of being able to say do we want to give something you know to everybody in the plan at the end of the year, once we know what the books look like for the year? That's a that's a pretty powerful tool to have.

Speaker 2:

Okay, thinking about what are the four key components that organizations should consider when they're creating a retirement plan of employees.

Speaker 3:

You may have very hands-on do it myself. I like investing. I understand the concepts. You need to think about how your employees are going to find out about the plan and how they are going to absorb information about the plan, so you can call this employee education, but really it fits in with their financial wellness and also your stance as a firm on how much of that type of education help you want to provide. And then I would say the last part is your fiduciary responsibility, just making sure that you're overseeing the plan.

Speaker 3:

You know what's going on in the marketplace and really, when this comes down to it, you do need help, because your time really should be spent on your work and the lawyering that you're doing, rather than all the administrative back office, but on the administrative and back office part of it, operationally speaking, on the back end, you want to have a plan that's easy for your staff to administer for you. So this should not be something that becomes a burden, but rather something where the systems align your payroll system maybe, talks to your 401k record keeper and exchange information, so things like that. So those are the types of things to be looking for.

Speaker 2:

OK, now thinking about what, what are other companies offering at this time? I mean, what are you seeing happening with say, say, let's go small, let's go six to 12 employees. So just think of a small and midsize firm. What are you seeing out there?

Speaker 3:

In that case I would say that they're looking for the opportunity for employees to be able to save. Oftentimes the managing partners in those situations or the partners are looking to save a lot for themselves, as much as they can, and so the plan design that we see in that situation says that we're going to give everybody 3% of their pay, no matter if the employee chooses to participate or not, and so they build it into their budget. We also see that structured a little bit differently, where they can match dollar for dollar up to 4%. So that would be in general. Those two are the most common that we see across the board, just because there's some IRS rules and tests that they get out of by implementing that type of plan design, and that tends to be really important on the smaller side.

Speaker 3:

For sure, as you move up into the larger areas, you don't necessarily have to have a guaranteed match or a guaranteed. We call it a non-elective contribution. The gift you know here's 3% of your pay in your retirement plan, but as your company grows you might have a few more options for being a little bit more nimble with how you make that work, so you could match up to a larger percentage than I mentioned before, or structure where instead of it's, you know, dollar for dollar match it's 50 cents on the dollar, up to 8%. I don't know, I'm throwing out numbers here, but one thing that you can do is just like look across the board at your competitors. Usually there's some information available on the website. You can ask HR consultants in the area will probably be helpful as well and just kind of gauge like where you stand against others of your size and that can be helpful in constructing your compensation package for your employees and think about how much you want to pay in the paycheck versus in the benefit side.

Speaker 2:

And that's definitely for acquiring those A players and keeping the A players and all of this is tax exempt or pre. Is it pre-tax? Yeah?

Speaker 3:

For the employee yeah, it's pre-tax for the employee. There's also the opportunity to put Roth money in there. Now. That was a relatively new provision in the last 10 years, so you can put some after-tax dollars into this as well. But for the employer the benefit is that when you make the contribution the employer contribution then you get that as a tax deduction. And for the employee, when they're putting their money in, you know they are not paying taxes on that money at this time. If it's a pre-tax contribution and you as the employer don't have to pay the, you don't have as much to pay in tax as well on the payroll taxes pay in tax as well, the payroll taxes.

Speaker 2:

Okay, so I'm assuming with you you've done 10,000 education programs. I'm assuming that you, if you step in and you're helping, then you're going to do some sort of employee training. What's your role in helping someone decide what to do and enrolling it out?

Speaker 3:

Yeah, we feel like as an advisory firm, you know you spend all this time and money providing this plan. It's imperative that your staff understand and appreciate the plan and are getting the best out of it they can. So when we are looking at how to educate people, we're thinking about things like where are all the eyeballs going, you know? Does everybody log in in the same place? Can we put a message there? Is this a virtual environment? These are questions we didn't have to ask necessarily before COVID started. Are we all virtual? Do we get together at any point in time? Is an in-person meeting versus a video or a virtual meeting better?

Speaker 3:

Future employees just from like that, that physical like how are they going to get the message? But then also you have to think about what kind of life stage are they in, what kind of message will be relevant to them? And it could be that you know they're early on in their career. That's a different type of messaging than somebody who's five, 10 years out from retirement and the types of things that they're thinking about and their life stage and where their family might be or not be, et cetera. So that's what we're helping to think about and craft in that situation.

Speaker 2:

And do you work with the HR departments or who would be the ideal person to speak with you to open the door?

Speaker 3:

I would say most commonly we work with HR, but a lot of times we're working with controllers or CFO, just depending on the size of the firm and how they have things structured. In some cases the controller might wear two hats and do some HR. We also have clients where it's an outsourced HR person. Those can be a great resource, especially if you don't have enough employees or don't have enough work full-time for an HR professional to be on staff, especially with the smaller firms. So that's a great resource for those who maybe don't want to hire somebody dedicated all the time. But those are the types of folks that we typically are working with.

Speaker 2:

Yep, okay, so say, some of the listeners are like they really want to start exploring what's going on and what the options are. What would be? What would they do? What would be their first step? Reaching out to you.

Speaker 3:

For reaching out to us. You can go to retirementplanologycom slash learn more, and there's a wealth of information there. Also, they can book a call to just discuss what's on their mind or send us an email. Another way might be to follow us on LinkedIn and I'll just go ahead and put a plug out there to say of the types of things I mentioned before. You know we do 401k and up, so we are you're kind of growing into that larger space. And then you need us for sure On the simple IRA, on a SEP IRA. You know your accountant or your local financial advisor might be a good resource, but the IRS website is actually quite good for those types of programs as well. So kudos to them for having an easy to read website. But otherwise, go check us out at retirementplanologycom slash learn more.

Speaker 2:

Okay, so we've talked about a lot and I know that this is a really detailed subject. Is there anything that I didn't ask that you want to that would help our audience in understanding what you're doing? Anything that you wish I would have asked.

Speaker 3:

I would just say the last thing is thinking about your compensation package is an extension of your company culture to an extent, so really concentrating on the fact that you don't have all the dollars in the world to spend on benefits right, you're constrained by your budgeting, so think long and hard about what types of things your employees appreciate besides just that paycheck that they take home and then figure out a way to to have those benefits be relevant and be something that they appreciate and use as a way of giving back, but also as a way of defining like these are the types of things that are important to us as an organization. I think it was kind of surprising during COVID to hear what employees thought about where the retirement plan fit in, and it was never something that they would have quit over, but it was the last straw they're like, and after they're done with their tirade, they don't even give us a 401k match.

Speaker 3:

So those little things do add up and you know we're here to help, it helps you know, figure out where those dollars should go.

Speaker 2:

And maybe it's not their retirement plan in some cases, but if it is, so do you find that over the last I guess since COVID that firms and companies are looking more towards a culture as part of the way you know their company culture, of keeping those A players and bringing in the A players, which this would be a big part of? Are you seeing that the culture is something that's part of the conversation as well?

Speaker 3:

Yes, definitely We've seen a lot of reconsideration around how they are designing compensation packages. A lot of it came out from the you know, can we be in a more hybrid or virtual environment, especially for law firms? Whereas, like, how do we focus our time and attention for when we are together in the office? Because I think law firms, much like financial services there's a lot of kind of apprenticeship that happens, and being able to knock on somebody's door down the hall to get expertise is important or bounce ideas around. How would you approach this?

Speaker 3:

So we saw a lot of focus on what they're doing from a workplace culture standpoint to make it easier for people to want to come back to the office and then also for a while there we had the great resignation and so it was about keeping people. How do we really make sure those A players stick around? What are the types of things that they appreciate? Are we meeting their needs, both from a professional standpoint but also a personal standpoint? So I think all of that, just a big confluence around all of that after COVID.

Speaker 2:

Yeah, I think this plays into the company culture being. It's not all about the salary, it's about a lot of other things that come into play when it comes to job satisfaction, that sort of thing, so I think this plays in really, really well. This has been really interesting. I know that my listeners are going to want to reach out to you, so let's have those URLs again. You said you're on LinkedIn and then I'll make sure that the URL gets in the show notes, but that's retirementplanologycom slash learn more Perfect, perfect this. Yeah, this has been great. I've learned a lot on this as well, and I'm sure I listen as well too. We'll make sure to put everything in the show notes, and thank you so much for your expertise today. It's been lovely listening to you.

Speaker 2:

Thank you for having me. This was great, awesome, thank you.

Speaker 4:

Thanks for joining me today for this episode. As we wrap up, I'd love for you to do two things. First, subscribe to this podcast so you don't miss an episode, and if you find value here, I'd love it if you would rate it and review it. That really does make a difference in helping other people to discover this podcast. Second, you can connect with me on LinkedIn to keep up with what I'm currently learning and thinking about. And if you're ready to take the next step with a digital strategist to help you grow your law firm, I'd be honored to help you. Just go to lawmarketingzonecom to book a call with me. You Just go to lawmarketingzonecom to book a call with me. Stay tuned for our next episode next week. Until then, as always, thanks for listening to Leadership in Law podcast and be sure to subscribe wherever you listen to podcasts so you don't miss the next episode.

Speaker 1:

Thanks for joining us on another episode of the Leadership in Law podcast. Remember you're not alone on this journey. There's a whole community of law firm owners out there facing similar challenges and striving for the same success. Head over to our website at lawmarketingzonecom. From there, connect with other listeners, access valuable resources and stay up to date on the latest episodes. Don't forget to subscribe and leave us a review on your favorite podcast platform. Until next time, keep leading with vision and keep growing your firm.