“The Year Of Executive Benefits” with Aviva Sapers & Patrick Bugbee of Sapers & Wallack

Nathan (0s):
Welcome back Radio Entrepreneurs, listeners and fans. I’m producer Nathan Gobes filling in for Jeffrey Davis this morning. I’m excited to have Aviva Sapers president of Sapers & Wallack here with me and alongside her I have Patrick Bugbee director of executive benefits at Sapers & Wallack as well. Welcome Aviva and welcome Patrick.

Aviva (21s):
Thanks for having us.

Patrick (23s):
Thank you very much. Appreciate it.

Nathan (25s):
Of course. Usually I’d have a Evan mosquito at my side, but he’s recovering right now. But since this is usually a, one of the segments Evan would do, this is where we would mention that this is an FEI associated segment. We’re really appreciative to have them as part of our show, but today’s topic is executive benefits. We wanted to do a deep dive onto those. And so obviously Sapers and Wallach has been on our show before, you know, Evan’s been on many times. Aviva, you’ve been on many times, but why don’t you start by telling our listeners about Sapers & Wallack specifically in the area of executive benefits? How can you guys, how do you guys focus on those?

Aviva (1m 4s):
So, Nathan, as you know, we’re a full service employee benefit and financial service firm, and we’re really all about taking care of people, their employees, and families, et cetera, but in the world of executive benefits, they’re really designed to attract, retain and reward key people. And in today’s world of the great resignation, I think there’s even more emphasis being placed on executive benefits. Why they’re important, having ones that are understandable, that are appreciated. If you’re going to spend money on something, it should be something that people actually feel is doing something for them. We’ve noticed over the years, that there are a lot of executive benefits that are out there that are so complicated for even for a small closely held business that you would have thought it was part of GE or something.

Aviva (1m 53s):
I mean, they’re, they’re so complex that you have to have performed certain things on a given day with a wind blowing at a certain speed and the, in the sun, just so high in the, in the, in the, in the sky. So people, if they don’t understand them, they’re not motivated by them. They’re not, they’re not appreciative of them. And frankly, they may look at them even as more of a hassle than what they’re worth. So you’re not going to get retention out of that. You’re not going to get increased performance. So in the world of executive benefits, we’re trying to keep it simple. And when we have to get a little more complicated, regardless, it’s about making sure that the employees understand it and it fits in with their it’s communicated to them fits in with their whole picture.

Patrick (2m 35s):
I’ll echo a little bit of would have Eva just said. I think one of the other aspects of executive benefits that we seem to focus on quite a bit lately is helping executives sort of protect and prepare themselves whether it’s for retirement or in the event of the disability and to Eva’s point that things can get pretty complex. And I’ve been with sabers and wallet for 16 years. And I think that’s one of the things that as a third generation firm, we do well is we communicate and we’re, we’re pretty consistent about having points of contact that remain consistent over a pretty long period of time. I think that’s something that’s a really great aspect of Sapers war while in our firm.

Nathan (3m 18s):
That’s great. What do you see as some of the most popular executive benefits right now in the marketplace? You know, obviously there’s a lot that can be done to attract these executives to either stay or to join an organization. But what are the, what are some of the most popular ones right now?

Aviva (3m 37s):
It’s a good question. So back when we started in the executive benefits business, a lot of the plans were designed towards retirement and people staying with companies like Patrick is what it is an anomaly. It is a lot of the folks sabers and Warlick or anomalies that way. Having been with us for a long time. Most people don’t see themselves staying at jobs more than five years. So the old concepts of a deferred comp plan, and some of these SERPs are great where the culture of the company is long-term. And a lot of employees might be there for a while, but if you’re thinking you’re going to hop around and leave a job within five years, they actually are very few benefits that might retain somebody.

Aviva (4m 22s):
So you’ve got to think that through and figure out what works for your culture in your environment. You know, Patrick, do you want to talk about some of the things that we’re doing?

Patrick (4m 30s):
Yeah. I would say a common phrase internally is that this is the year of the SARC and that’s a term supplemental alternative retirement plan. It’s, it’s really sort of a Roth IRA look alike, and we’ve been communicating both with the executive team and then giving that out to the sort of the VP levels at quite a few of our clients. And it’s a great way to help folks that are maxing out their 401k, save a little bit more in a tax advantage way. And we’re seeing a lot of great feedback on that. I think people appreciate the opportunity to, to save more.

Patrick (5m 11s):
And it’s just, it’s really taking off this year in particular. I think the, the great resignation as a Veeva pointed out a little bit, that’s something that’s keeping people around because it’s something that really doesn’t exist at every employer. So that’s something we’ve seen quite a bit of.

Aviva (5m 27s):
Yeah. And I’d also say the world of our cart benefits where you really are designing benefits for individuals within a company. The one size fits all is somewhat a thing of the past, but the executive benefits kind of come in two packages. One is where the employer is trying to incentivize and retain folks. And the other is getting rid of something. We call reverse discrimination where I know you don’t want to use the word discrimination in today’s day and age, but in case there are many highly compensated folks that by nature of either the government rules or the contract restrictions, don’t get as much of a benefit as the non-highly compensated.

Aviva (6m 9s):
For example, disability insurance pays you 60% of pay up to a cap. So let’s say it’s 10,000 a month that may cover you for 180,000 of compensation. But if you’re making a half a million dollars or, or you’re on commission, and you’re the top sales guy at a, a, a company you may be making a lot more than that. And if you became disabled, you’d get a fraction of your income covered by disability. Same thing with retirement plans, you’re capped out what you can do by dollar limits or percent of pay from the, the federal government. And as a result, supplemental savings is an attractive in an area where we’re trying to give other folks a tax advantage way to save, like the syrup that Patrick talked about, like deferred comp, like SERPs that have vesting schedules because the vesting schedules can provide a little handcuff while the tax deferred nature provides something equivalent to the 401k or other types of retirement plans.

Nathan (7m 5s):
Hmm. Interesting, interesting. What would you say to employers that are considering forgoing some executive benefits? Obviously we’ve talked about the value of the upside of having them, but what kind of costs can be, can be lost or w you know, what can be lost by not having these executive benefits?

Aviva (7m 30s):
Well, the biggest cost is, is to find a new replacement person for the person who just walked out the door and took a job, paying a little bit more, better benefits somewhere else, not to mention the disruption of getting somebody new, up to speed on the culture and on how you do things at your firm. So I would say it’s a huge cost between which you have to pay the head hunters. If you’re using head hunters, the time of interviewing and doing all of that kind of stuff is huge. So it’s a big disruptor for most companies. So if you’ve got good people and you want to keep them executive benefits are something that should be considered.

Patrick (8m 6s):
And I just want to add to it, a Viva said, the point you made earlier on the disability, if you decide to forgo executive benefits and disability in area where you have a number of executives who hit that cap, and God forbid someone does become disabled. If you didn’t communicate that clearly that can have some ripple effects throughout the company. And to both not provide that type of executive benefit where you supplement disability coverage, but then you communicate that poorly. That’s just a, that’s a kind of a disaster waiting to happen.

Aviva (8m 39s):
Yeah. And actually, you, you remind me of something. If you have a long-term employee who becomes disabled as an employer, you have a moral decision to make. If your disability insurance only paid that person 10,000 a month, and they were 25,000 a month. And living at that level, because that’s what people do is their salaries increase in many cases. What do you do when their spouse comes back and says, Hey, Susie has been working for you for 25 years. And this is how you repair you sit there and say, you know what? We really should do something else. So then you start supplementing their pay, and now they don’t qualify for the disability coverage.

Aviva (9m 22s):
Cause you’re supplementing their pay. They ha they’re still getting income. So it’s, it’s a vicious circle of nonsense and it can cause all sorts of problems, but, and then that you did it for Susie when Jim has that problem, what do you do for him? So having good benefits, making sure that everybody’s covered where they need to be is probably a good starting point to make sure that you, you don’t end up with the additional cost. Cause that costs you. If I have to supplement your pay and I paid for disability insurance. Hmm. Who’s the real loser there.

Nathan (9m 54s):
Right. Right. And I’m sure good disability insurance just also shows the employee that you’ve got their back, right. When something happened. Well, we’ve talked a lot about specific executive benefits or executive benefits as a whole, but I’d love to get into Cyprus and Wallach. And how, what differentiates you guys from other executive benefits firms?

Aviva (10m 17s):
I think it’s the personal attention to design and come up with a plan that actually works for the client and then the servicing and making sure it’s communicated properly. And on-goingly, there is such a word. The idea is, you know, even give you an example. We had a client who had, somebody was really key to the organization at a couple younger kids. I’d say one was 10, one was 12 or maybe 12 and 14. And one of the things they want to do is keep that person. So we came up with a very creative concept called the key plan that was going to incentive them by saying, Hey, you stay with us until your number one child gets to college.

Aviva (11m 4s):
We’ll pay 25,000 towards your first year tuition. And when number two child will pay 35,000 towards first year tuition. Those are pretty big nuts to have hanging out there as, as incentives to stick around that extra year, extra two years or whatever it might be. And that was meeting a need. The, the employee was thrilled. The company was happy cause they stayed and, and that’s thinking outside the box, it’s not designing the typical off the shelf deferred comp or serve or, you know, additional insurance type plan. And so I would say that it’s creating what really works and having a feel for the fact that you might have four people who were in within five years of retirement and a whole group of up and coming folks who are looking for something totally different.

Aviva (11m 56s):
They’re right now looking for college savings, they’re looking for insurers to protect their families. They’re looking for very different things than the ones that are saying, do I have enough in my 401k, Patrick, you want to add to that?

Patrick (12m 8s):
And I think I sort of touched on this earlier. One of the things that differentiates us is our sort of consistency and longevity. I’ve been here 16 years, I think has been here. I don’t know how long, but we have a lot of team members that have been here a long time. And when we’re talking to these, we talk both to the C-suite, but we also talked to that next level down of management. And when they know they can call us up and they can call a Viva, they can call myself and they they’ve worked with us for a long time. They see our name everywhere. And I think that’s pretty important. It builds trust because it isn’t a myself one year and then another person the next having that consistency, I think our clients value that.

Aviva (12m 55s):
Yep. I’d also say we’ve been told that we explain things in English in simple terms because some of these are complicated and when we’re handling the other benefits, like a 401k and we’re adding on a supplemental retirement, we can advise them on how those two things sort of joined together. And it gives us that ability because we do employ the basic employee benefits, as well as the executive benefits. You can paint a much more holistic picture for them of what they have and do some planning. And then on the wealth management side, if they want to do personal planning, we can tie that in with what they’re doing elsewhere. So it’s the holistic approach to

Nathan (13m 31s):
Excellent. Excellent. Well, I want to thank you both for joining us today. This has been a wonderful discussion of executive benefits. Hopefully eyeopening to some business owners out there. Aviva. If people wanted to get in touch with you at, or find out more about Cyprus and Wallach and Patrick, I’ll get to you next. But if people want to find out more, whether it’s an executive benefits question or something else that separates, and while it can help with what’s the best way for them to do so

Aviva (13m 58s):
They can email me at a Sapers at Sapers hyphen Wallach. That’s with a K, not a H w a L L a C k.com. Or my phone number is (617) 715-0125.

Nathan (14m 14s):
Excellent. And Patrick, how about you?

Patrick (14m 16s):
They, well, they can certainly look us up on the internet and go to our website. sapers-wallach.com. They can search for us on LinkedIn. And I’m also available via email@pbugbeesapers-wallach.com as well.

Nathan (14m 30s):
Awesome. Well, thank you both again for joining us. This has been a wonderful discussion and really appreciate you joining the show

Aviva (14m 39s):
Once again. Thanks for having us, Nathan, really appreciate you reaching out

Patrick (14m 44s):
And have a great day.

Nathan (14m 45s):
Thanks. And we’ll be back with more on radio on.