Many retirement plan sponsors are losing money as they sponsor employees who are no longer employed by their companies. By helping them better balance their plan, agents and financial service professionals can save their clients money.

Rollover Systems, a Charlotte, N.C.-based company, wants to help insurance agents and financial service professionals clear their retirement plan sponsors’ rolls of these costly enrollees who no longer work for the firm. Since the cost to plan sponsors for most retirement plans is based on the number of employees being included, having former employees on the rolls can be quite costly.

“Every company is looking at ways to cut costs and this is one way that’s being overlooked by most of them, said Jim Langenwalter, chief sales and marketing officer for Rollover Systems. The company assists agents and financial service professionals in working with plan sponsors to purge these people from their retirement plans.

‘Improved relationships’

“The agent who can bring this to his clients is going to save that plan sponsor some money, which is going to improve their relationship considerably,” added Langenwalter, whose firm was formed in 2001 and has about 75 employees.

The company contracts with financial service professionals, who agree to turn over their entire list of plan sponsors.

Working with the financial service professional and the plan sponsor, the rolls are rid of former employees and retirees, both of which can be costly to the plan. Rollover Systems’ staff contacts retirees and former employees by letter and phone to help them consider the alternatives available to them as they leave the plan.

“We make sure even the small guy gets access to the help he needs with his retirement,” Langenwalter said.

Agents, financial service professionals and the plan sponsor pay nothing for this service.

The majority of suits filed over retirement plans come from former employees, Langenwalter said, so eliminating these people from the rolls lessens the likelihood of a suit.

This story originally appeared in the March 2009 print edition of Insurance & Financial Advisor.