What are common fees for cross-tested studies?

[Guest LJS]

I'm trying to find out what firms are charging to do cross-tested studies. For example, is there a minimum charge? A maximum charge? Flat fee? Hourly charge?

Any responses are greatly appreciated!

[Guest JF]

Slight more level of detail would help answer this one. Do you mean as a

1) "pre-study" to selecting a plan design or 2) To do a study at plan year end for purposes of determining an actual contribution allocation or 3)Doing a study to file with a Schedule Q determination 4)Doing the study on a plan that already did the allocation in the past.

Also, are you talking 20 employees or 2000 employees ?

Many firms will do a "proposal" for a potential new plan or plan change over and charge little to nothing. These types of study will be less "detailed" since they are only projections that can never be 100% right in advance. There are various proposal systems out there that can be had very cheap that will do the allocations based on your census input. For someone with a siftware system ,the main time consuming factor for this is just the census input. As far as actual testing of a plan, this may be more involved, and in some cases, you may want an actuarial review. We are seeing the cost of doing the actual allocation range from as low as $300-500 to as much as $1500 depending on the size and complexity of the company and formulas used. If you have a small census, post the info here, it will make for an interesting set of answers.

[Guest Tom Geer Daily Access Concepts]

We are running at $500 flat for design studies. Larger clients are better about getting us data files in usable formats, so there's less data entry hassle. We also give ou sales/marketing folks the power to waive the fee if we are hired for administration.

Our experience is that canned proposal software is too limiting. With the repeal of 415 combined limits in 2000, we expect to see some pretty aggressive planning. Also, we are using some hybrid plan designs (rate group cash balance plans, floor/offset-type arrangements) that just don't fit.