July 28, 2025
Double the Impact: How Pairing FICA Alternative with 457(b) Deepens Client Value
Maximize plan design, client retention, and compensation in the public sector.
For financial professionals working with government employers—especially local school districts, municipalities, and state agencies—retirement plan consulting is more than a benefits conversation. It’s a powerful door-opener to cost savings, employee satisfaction, and long-term relationships.
One of the most underleveraged tools in this space is the FICA Alternative Retirement Plan.
FICA Alternative plans are a mandatory-participation group sale—meaning once adopted, every eligible PST employee must be enrolled. That translates into commission based on
- Large initial funding volumes from payroll-based contributions
- Recurring group-level premiums or annuity deposits
- Consolidated asset management at scale
When paired with a 457(b) deferred compensation plan, it creates a comprehensive, cost-efficient retirement strategy that appeals to HR, payroll, and finance departments alike—while giving you access to significant group assets and recurring compensation.
Why pair these two plans?
While the FICA Alternative plan replaces Social Security contributions for PST employees, a 457(b) offers voluntary, tax-deferred retirement savings for full-time employees and higher-income earners—especially those not well-served by Social Security and seeking to supplement pensions. Together, they
- Cover both part-time and full-time staff, showing a holistic understanding of the employer’s entire workforce.
- It enhances your value as a strategic consultant, not just a product vendor.
- Give multiple entry points into benefits conversations with HR and finance leaders ultimately boosting employer retention and satisfaction with easy, bundled implementation.
If you’re prospecting in the public sector and you’re not leading with this strategy, you’re missing out on untapped compensation and client impact.
Sample talking points for prospecting discussions
“What if you could lower your payroll tax burden while giving all your workers a retirement savings plan—whether they’re full-time, part-time, or seasonal?”
“Many agencies are pairing FICA Alternatives for PST workers with a 457(b) for career employees. It’s a modern, efficient benefits strategy that saves money while enhancing retention.”
“We can implement both plans together with one education strategy, one point of contact, and one onboarding process.”
Emphasize ease of execution
Start with cost savings and risk reduction. Explain that redirecting payroll tax liability through a FICA Alternative can yield six-figure savings, depending on seasonal headcount.
Once you’ve addressed part-time employees, pivot to full-time staff. Highlight how 457(b) plans support deferred compensation, catch-up contributions, and long-term retention.
Offer a turnkey solution: bundled plan onboarding, combined employee education sessions, and centralized advisor support. The less friction for HR and payroll teams, the more likely they’ll say yes.
This dual-plan design positions you as more than a product pusher—it makes you a retirement architect for the agency’s total workforce.
See also
The FICA Alternative Advantage: Cut Payroll Costs & Build Retirement Security
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