TAG Resources helping get people into retirement plans
By Tom Ballard, Chief Alliance Officer, PYA
Troy Tisue did not grow-up in the Knoxville area, but he clearly started and has grown a successful business here since founding TAG Resources LLC in 2002.
And, with the growing number of people who work independently in what is referred to as the Gig Economy, companies like TAG Resources will become an increasingly important option for those planning for their eventual retirement.
Tisue is an Iowa native and Citadel graduate who spent six years selling retirement plans in his native state before moving to Knoxville 18 years ago. His parents had semi-retired to the region, and Tisue says he and his wife tired of the harsh Iowa winters.
The concept for what became TAG Resources was launched in his basement on a whiteboard. As is the case with many entrepreneurs, there was also a matter of lucky timing, not just once but twice.
“The PEO industry (Professional Employer Organization) sought a ruling from the Internal Revenue Service on offering multiple employer plans” in areas like healthcare and retirement, Tisue said. “They figured out that the power of many is better than the power of one.”
When a favorable ruling was received, Tisue was ready with an idea; his company TAG launched the nation’s first open multiple-employer retirement plan (The Open MEP©). It is a fee-based, qualified 401(k) retirement plan established under 413(c) of the Internal Revenue Code that permits unaffiliated employers to adopt into a retirement plan sponsored by an outside entity that bears responsibility for administering the plan.
“Cost and liability were and still are the reasons smaller employers don’t offer a 401(k),” Tisue said. “We created the Open MEP to be a source for anyone . . . and we did it with a little office in Knoxville staffed with five employees.”
Today, TAG Resources has about 50 employees housed in a building on Deane Hill Drive just west of Central Baptist Church in Bearden.
TAG’s approach of fiduciary outsourcing and MEPs got attention in the industry.
“By 2011 everyone in the industry had an Open MEP or was building one,” Tisue said. Although an unfavorable 2012 ruling from the U.S. Department of Labor (DoL) limited growth opportunities in this new MEP structure, Tisue’s company saw a new opportunity for the Knoxville firm.
MEPs might have hit a road block, but the fiduciary outsourcing that they afforded small employers was clear. So TAG took the opportunity to rebrand itself as something called a 3(16) service provider. Authorized under ERISA (the Employee Retirement Income Security Act of 1974) that sets minimum standards for retirement plans in private industry, TAG Resources built its new business by serving as a third party fiduciary for a company’s retirement plan.
“We are a surrogate employer for our clients’ retirement plans,” Tisue says. “It’s a cool concept and a way for them to outsource the fiduciary risk.” TAG Resources has several hundred clients in Tennessee and between 1,300 and 1,400 across the country.
On the firm’s webpage, it touts a number of advantages to its clients including the ease of administration, consistency of compliance, containment of costs, and assumption of the fiduciary liability.
What’s the future hold? Tisue is optimistic that Congress will act to address the technical limitations posed on Open MEPs by the DoL ruling in 2012. There is both pending legislation and regulatory changes that could bring these back to the forefront.
“Multiple employer plans are going to come back in a big way,” he believes. The impetus will be a combination of the Gig Economy, low savings rates by individuals, and the fact that one-half of the population does not have access to a retirement plan.
“We need to get people in retirement plans,” Tisue says. “Multiple employer plans will do just that.”
As we do during every interview with a successful entrepreneur, we asked the TAG Resources President about the lessons he’s learned in his not quite 14-year journey with the firm he founded.
“You have to be an extremist in patience,” Tisue said. “You have to realize the big picture . . . push with everything you’ve got but realize it’s not going to be today. You have to have the tenacity to keep going.”