Deferred Annuities in Target Date Funds
|
|
- Rudolf Strickland
- 8 years ago
- Views:
Transcription
1 Deferred Annuities in Target Date Funds An Explanation of Guidance Issued by the Department of the Treasury November 2014 Risk. Reinsurance. Human Resources.
2 Target Date Funds and Deferred Annuities A Match? On October 23, 2014, the U.S. Department of the Treasury (Treasury) issued Notice (Notice) on deferred annuities in target date funds 1. Treasury attempted to clarify a technical consideration for sponsors offering deferred annuities to participants in a target date fund (TDF) series. The Notice provides a special rule allowing plan sponsors to satisfy qualified plans nondiscrimination requirements if certain criteria are met. This paper will focus on how deferred annuities with target date funds work, the considerations regarding nondiscrimination rules, and other plan sponsor implications. This latest Notice is the most recent guidance on retirement income usage in defined contribution (DC) plans. In July 2014, for example, Treasury released regulations on qualified longevity annuity contracts (QLACs) for DC plans 2. Aon Hewitt anticipates the DOL will likely provide additional regulatory guidance on ERISA fiduciary issues relating to offering annuities in DC plans and reporting retirement income on participant statements in early Helping participants protect themselves from outliving their assets is an important goal for all stakeholders. Aon Hewitt s previous research has shown there is a retirement savings gap among U.S. plan participants 3. Additionally, on October 27, 2014, the Society of Actuaries released new mortality tables quantifying how much longer people are now living. The result is that many participants are, or will be, exposed to significant longevity risk in retirement. How Does a TDF Series with a Deferred Annuity Work? If a TDF includes a deferred annuity, it acts as another investment option within the TDF series. In the Notice, Treasury indicates a deferred annuity is similar to a fixed income investment. In fact, many fixed deferred annuities have underlying investment structures similar to intermediate or long-term bonds. However, one important difference is that annuities offer individuals the benefit of longevity protection. As the investment manager constructs the investment glide path for a target date series, the asset allocation typically becomes more conservative over time. Therefore, as a participant ages, his or her investment strategy becomes more conservative. In TDFs without annuities, assets systematically move from equity allocations to fixed income allocations over time. For TDFs that use deferred annuities, the investment manager may have no allocation to deferred annuities at the start of the glide path and, at some point in the glide path, begin incrementally to add deferred income. The sample glide path below shows a hypothetical TDF series/family. Hypothetical Glide Path 4 with No Deferred Annuity At age 35 in the 2045 TDF fund, the allocation might be equity 90%, fixed income 10% At age 65 in the 2015 TDF fund, the allocation might be equity 45%, fixed income 55% 1 Treasury Notice: 2 Aon Hewitt s white paper on this topic is available at /Weekly-Update-27-October-2014.aspx. 3 Real Deal Study, 2012 Aon Hewitt: 4 Please note the above glide paths are hypothetical and are intended only to illustrate the deferred annuity concept for the reader. Deferred Annuities in Target Date Funds 1
3 Hypothetical Glide Path with Deferred Annuity At age 35 in the 2045 TDF fund, it might be equity 90%, fixed income 10% At age 50 in the 2030 TDF fund, it might be equity 65%, fixed income 30%, annuity 5% At age 65 in the 2015 TDF fund, it might be equity 45%, fixed income 30%, annuity 25% As shown above, for some current TDF products that use annuities, the deferred annuities may not receive an investment allocation until a later age (e.g., age 50). Once someone reaches age 50, the glide path allows an increasing allocation to the deferred annuity as the fund proceeds toward maturity. This approach is used because at younger ages, like 25 or 30, glide paths generally put people into heavy growth strategies so it may not be beneficial to purchase deferred annuities. Because of this strong age correlation and the fact that the annuity purchase price is age-contingent, some target date fund strategies restrict TDFs that use deferred annuities to older participants. Younger participants cannot purchase a TDF with a deferred annuity until they age into the option. This creates a potential rights and features disparity for younger participants, who are generally lower paid. This group would not have the same current access to deferred annuity products as older participants, which could be problematic since plans may not offer benefits that discriminate in favor of highly compensated employees. Guidance for Target Date Funds The Treasury Notice gave technical guidance to address this potential discrimination issue under the Internal Revenue Code. For purposes of the nondiscrimination testing rules, the plan could be treated as having a single right or feature provided that certain conditions are met. Such treatment alleviates the burden to perform testing to ensure that the target date fund series does not discriminate in favor of highly compensated employees. A target date fund series must meet the following requirements with respect to the limited offering of deferred annuity contracts to attain single benefits, rights, and features consideration and avoid nondiscrimination issues: Glide path fund differences. Investment managers must construct the TDF series based on prudent portfolio asset allocation theory. However: The only allowable rights and features difference among the funds in the TDF series is the asset allocation mix, in order to achieve the appropriate level of risk for individuals at particular ages; and Deferred annuity allocations must be available to younger participants once they reach the appropriate, designated age band. Deferred Annuities in Target Date Funds 2
4 Targeting specific ages. The deferred annuity can be available only to older participants. However, the annuity cannot include a feature called a guaranteed minimum or guaranteed lifetime withdrawal benefit. 5 Transparent securities. There can be no TDF series investments in employer securities that are not readily tradable on established securities markets. All other rights and features consistent. Except for the differences in asset mix described above, all other rights and features for TDF series participants must be consistent. Other Notable Guidance In addition to how TDF series may satisfy Internal Revenue Code nondiscrimination requirements, Treasury asked for the Department of Labor s (DOL) views on these TDF/deferred annuity structures. As a result, in a letter from Department of Labor Assistant Secretary Phyllis Borzi to Treasury Department Assistant Secretary Mark Iwry, dated October 23, , the DOL provided helpful guidance: QDIA status confirmed. The DOL opined that the TDF series with the deferred annuity feature may qualify for Qualified Default Investment Alternative (QDIA) designation. This recognition is helpful guidance to plan sponsors offering TDFs as their default for participants failing to make an affirmative investment election. If a TDF satisfies all remaining requirements that constitute a QDIA, the deferred annuity feature will not cause the TDF to lose QDIA status. Fiduciary considerations. Many plan fiduciaries also were concerned about the fiduciary guidance under ERISA for the selection of deferred annuities in DC plans. The DOL s most recent guidance indicates that the annuity selection safe harbor 7 applicable to DC plans (2008 Safe Harbor) establishes a means for plan fiduciaries to satisfy responsibilities under ERISA regarding annuity selection. At a high level, the 2008 Safe Harbor guidance for annuities says fiduciaries must: 1. Conduct an objective, analytical, and thorough search; 2. Assess the ability of the annuity provider to make benefit payments; 3. Consider the fees for the annuity contract relative to the benefit payments and administrative services received; 4. Conclude at the time of annuity provider selection that the annuity provider can make future payments and that fees relative to benefits and administrative services are reasonable; and 5. Hire an expert to assess the above criteria, if needed. 5 Guaranteed minimum withdrawal benefits (GMWB) and guaranteed lifetime withdrawal benefits (GLWB) are two types of deferred annuities that provide income to participants. The GMWB provides benefits over a certain specified time period rather than for the lifetime of the contract owner or annuitant. The GLWB provides benefits over a participant s lifetime regardless of deteriorating investment performance or asset level. GMWBs/GLWBs are not fixed annuities, but are variable annuities that pay a set, established periodic income (withdrawal) amount (e.g., 4%) based on the annuity value. There are specific features and considerations for GMWBs/GLWBs that are beyond the scope of this paper. We will discuss the implications on TDFs below. 6 DOL letter to Treasury: 7 DOL regulation Section a-4: Deferred Annuities in Target Date Funds 3
5 The DOL s letter to Treasury made two other meaningful comments regarding fiduciary considerations The plan fiduciary must prudently select and monitor the designated [TDF] investment manager at reasonable intervals to ensure the appointment is still appropriate; and 2. The designated and appointed [TDF] investment manager as a fiduciary under section 3(38) of ERISA is then responsible for selecting the deferred annuity provider. Implications for Plan Sponsors The guidance on retirement income from Treasury and the DOL indicates ongoing support from Washington. Plan sponsors can now contemplate offering a target date fund series that includes deferred annuities if it is appropriate for their plans without running into complex nondiscrimination testing features due to the inclusion of a deferred annuity. Some lifetime income issues relative to this topic remain, and we cite a few of them below. 1. What about GMWB/GLWB deferred annuities? GMWB/GLWB strategies are deferred annuity variations sometimes used with TDFs incorporating lifetime income. Guidance from the plan s legal counsel regarding these strategies may be helpful for further direction and appropriate sponsor action, particularly since the guidance in the Notice appears to address a particular arrangement that did not include a GMWB/GLWB strategy. The Notice says Treasury is considering whether to provide guidance at a future date relating to issues arising from these strategies. One open question may be whether GMWBs/GLWBs would be viewed as fixed annuities (similar to the arrangement described in the Notice) or variable annuities, and the implications of such differing viewpoints. If, however, the guidance is deemed unavailable to GMWB/GLWB products, the plan sponsor must assess the effect of GMWBs/GMLBs on its plan s nondiscrimination testing. 2. Is fiduciary responsibility lessened for plan sponsors under the newly issued guidance? Possibly, depending on the role of the plan sponsor and the investment manager. To the extent that the plan sponsor chooses the TDF investment manager, it must use prudent selection criteria. After this selection (and allocation of the responsibility), the designated investment manager is responsible for evaluating, selecting, and monitoring the deferred annuity provider. The DOL notes that if the plan sponsor discharges its fiduciary responsibility properly, then the plan sponsor may not be liable for certain investment manager actions. There is an exception for potential co-fiduciary liability under ERISA Section 405(a). The selection and monitoring of the investment manager is a critical initial and ongoing consideration. However, delegating the responsibility of selecting the deferred annuity provider to the investment manager may make sponsors more comfortable. 3. How likely is it that investment managers will accept fiduciary responsibility for deferred annuities? Some investment managers may not want to accept full fiduciary responsibility for deferred annuities. The DOL noted to Treasury that investment managers must acknowledge in writing that they are a fiduciary for the plan. The investment funds in an investment manager s TDF series typically consist 8 These considerations focus on common situations where the sponsor, acting as a named fiduciary, designated an investment manager under ERISA section 3(38) to manage the investments of the fund. Deferred Annuities in Target Date Funds 4
6 primarily of its proprietary products. This applies to products offered by investment managers such as Fidelity, Vanguard, and T. Rowe Price. Designated investment managers would likely have few concerns serving as fiduciary for their own products, but they often decline to be the fiduciary for any given plan because their products are deployed in so many varied plan situations. Serving as fiduciary for an annuity could be interpreted as a different set of circumstances, but it is not clear whether proprietary product providers accept this notion. It will be interesting to monitor how this evolves in the investment manager community. 4. What about potential conflicts with investment managers and the annuity provider? The DOL guidance describes the investment manager as an independent party from the underlying insurance company(ies)/annuity providers. However, there are some TDFs offered by insurance companies that include deferred annuities from the same insurer. How should these annuity products be treated? Also, the potential fees from insurance products paid to independent investment managers must be included in any due diligence assessment. Third-party due diligence assessments may become the prudent approach in assisting the market to achieve transparency and demonstrate strong fiduciary process. Plan Sponsors may also opt for custom target date funds over off-the-shelf funds from a single asset manager to further promote transparency. 5. How should you view these TDFs with deferred annuities relative to other DC retirement income products? Plan sponsors will need to vet these products similarly to any other investment alternative in their fund lineup. Whether these alternatives are better for a specific plan or not depends on many factors including plan design, participant demographics, product considerations, fiduciary issues, and recordkeeping implementation. Final Thoughts This latest guidance from Treasury and DOL shows that regulators have an interest in plan sponsor consideration of lifetime income. There are some technical items to consider, but these regulatory references may slowly move the market toward broader assessment and adoption. Although regulations are generally written in the context of off-the-shelf target date funds, deferred annuities may also be implemented in custom target date strategies with the same considerations and regulatory relief from discrimination challenges. Aon Hewitt believes that, as with many situations in the retirement markets, plan sponsors need to base their assessments on individual employer facts and circumstances. Does the plan sponsor still have an active defined benefit plan? Is the sponsor very paternalistic? Does the plan sponsor already offer in-plan or out-of-plan retirement plan solutions? There definitely is no one-size-fits-all solution. For some plan sponsors, deferred annuities in TDFs might make sense. Providing participants the ability to dollar cost average and purchase income over time can be a prudent and beneficial alternative. Aon Hewitt will continue to monitor these developing trends and provide careful and prudent guidance for plan sponsors. Deferred Annuities in Target Date Funds 5
7 Contact Information Steve Shepherd Partner, Institutional Annuities and Life Insurance Solutions Hewitt EnnisKnupp, an Aon Company Scott Fisher, CFA Associate Partner, Investment Consultant Hewitt EnnisKnupp, an Aon Company Diana Jacobson Director, HR Outsourcing Defined Contribution Practice Leadership Aon Hewitt Deferred Annuities in Target Date Funds 6
8 About Aon Hewitt Aon Hewitt empowers organizations and individuals to secure a better future through innovative talent, retirement, and health solutions. We advise, design, and execute a wide range of solutions that enable clients to cultivate talent to drive organizational and personal performance and growth, navigate retirement risk while providing new levels of financial security, and redefine health solutions for greater choice, affordability, and wellness. Aon Hewitt is the global leader in human resource solutions, with over 30,000 professionals in 90 countries serving more than 20,000 clients worldwide. For more information on Aon Hewitt, please visit aonhewitt.com. Copyright 2014 Aon plc. Deferred Annuities in Target Date Funds 7
Lifetime Income Provided Through Target Date Funds in Section 401(k) Plans and Other Qualified Defined Contribution Plans
Notice 2014-66 Lifetime Income Provided Through Target Date Funds in Section 401(k) Plans and Other Qualified Defined Contribution Plans I. PURPOSE This notice provides a special rule that enables qualified
More informationLongevity Insurance in DC Plans Paving the Way for QLACs
Longevity Insurance in DC Plans Paving the Way for QLACs A Roadmap to the 2014 Regulations on Qualifying Longevity Annuity Contracts and Plan Sponsor Considerations October 2014 Risk. Reinsurance. Human
More informationLongevity Insurance in DC Plans Paving the Way for QLACs
Longevity Insurance in DC Plans Paving the Way for QLACs A Roadmap to the 2014 Regulations on Qualifying Longevity Annuity Contracts and Plan Sponsor Considerations October 2014 Risk. Reinsurance. Human
More informationEvaluating Target Date Funds. 2003 2015 Multnomah Group, Inc. All Rights Reserved.
2003 2015 Multnomah Group, Inc. All Rights Reserved. Scott Cameron, CFA Scott is the Chief Investment Officer for the Multnomah Group and a Founding Principal of the firm. In this role, Scott leads Multnomah
More informationCustom Target Date Funds
Custom Target Date Funds Assessing the Best Fit IN BRIEF October 2013 Authored by Fred Reish and Joan Neri Target date funds are a popular plan investment option. The recent DOL guidance says that plan
More informationQualifying Longevity Annuity Contracts
DECEMBER 2014 WWW.DCIIA.ORG Qualifying Longevity Annuity Contracts Frequently Asked Questions (FAQs) Contributors Barb Hogg, Aon Hewitt Patricia Kuhn, BlackRock, Inc. Mike Westhoven, DST Retirement Solutions
More informationDCIIA Guide To U.S. Department Of Labor Tips On Selecting Target Date Funds
Defined Contribution Institutional Investment Association DCIIA Guide To U.S. Department Of Labor Tips On Selecting Target Date Funds Public Policy Committee Introduction In February of 2013 the US Department
More informationPaving the way to a secure retirement: A model DC approach
Paving the way to a secure retirement: A model DC approach Life expectancy (age) 95 90 85 49% 73% 0 20 40 60 80 100% Probability at age 65 A couple at age 65 has an 89 percent chance of one of them living
More informationMarch 30, 2010. Dear Assistant Secretary Borzi:
March 30, 2010 Phyllis C. Borzi Assistant Secretary, Employee Benefits Security Administration U.S. Department of Labor, Room S-2524 200 Constitution Avenue, NW Washington, DC 20210 Dear Assistant Secretary
More informationThe Basics of Fiduciary Responsibility under ERISA
The Basics of Fiduciary Responsibility under ERISA Prepared by Elizabeth A. LaCombe, Esq. I Who Is A Fiduciary Under the Employee Retirement Income Security Act of 1974 (ERISA)? Any person or entity who:
More informationLifetime Income Solutions for DC Participants
Lifetime Income Solutions for DC Participants Federal Regulators Offer New, Practical Guidance for Plan Sponsors 80% of participants responded that a guaranteed monthly payout benefit is a must have in
More informationNavigating the Target Date Fund Evaluation Process
Navigating the Target Date Fund Evaluation Process A Primer for Retirement Plan Sponsors Benjamin J. Smith, CFA Principal, Chief Investment Officer Contents Introduction. Understanding the Core Attributes
More informationDefined contribution (DC) plans such as 401(k), Retirement Income in DC Plans. The Next Evolution in Plan Design. The Remaining Problem
Retirement Income in DC Plans The Next Evolution in Plan Design by Steve Vernon Defined contribution (DC) plans such as 401(k), 403(b) and 457 plans are now the most prevalent type of plan for delivering
More informationEvaluating Target Date Funds. 2003 2013 Multnomah Group, Inc. All Rights Reserved.
2003 2013 Multnomah Group, Inc. All Rights Reserved. Scott Cameron, CFA Scott is the Chief Investment Officer for the Multnomah Group and a Founding Principal of the firm. In that role, Scott leads Multnomah
More informationInvestment Platform Options that Can Lead to Better Retirement Outcomes
Retirement Services Investment Platform Options that Can Lead to Better Retirement Outcomes For Plan SPonSor USe only not For DiStribUtion to the PUblic. Introduction Investment Platform Options that Can
More informationIN-PLAN GUARANTEED RETIREMENT INCOME
IN-PLAN GUARANTEED RETIREMENT INCOME PERSPECTIVE FROM TWO PROVIDERS Todd Bryden, Vice President & Actuary Prudential Retirement Andrea Cordani, Senior Actuary ING Retirement Services Joint Meeting of the
More informationSponsors Focus on Better Designing Plans to Meet Retirement Income Needs
Survey: Defined Contribution Trends 2014 (Part 1) Sponsors Focus on Better Designing Plans to Meet Retirement Income Needs Summary Defined contribution (DC) plan sponsors are increasingly engaging in internal
More informationJanuary 2014. Background. EAPs
Yes, Employers, There Is an Escape Clause! Christmas Eve Guidance Exempts Some EAPs and Limited Scope Dental and Vision Plans From HIPAA and Affordable Care Act January 2014 On December 24, 2013, the Departments
More informationRetirement Savings Proposals Summary of Key Provisions
Retirement Savings Proposals Summary of Key Provisions February 2014 Three different proposals have recently emerged from Washington D.C., each seeking to improve access to retirement plan savings vehicles.
More informationSTATEMENT FOR THE RECORD FROM THE AMERICAN COUNCIL OF LIFE INSURERS BEFORE THE 2012 ERISA ADVISORY COUNCIL
STATEMENT FOR THE RECORD FROM THE AMERICAN COUNCIL OF LIFE INSURERS BEFORE THE 2012 ERISA ADVISORY COUNCIL EXAMINING INCOME REPLACEMENT DURING RETIREMENT IN A DEFINED CONTRIBUTION PLAN SYSTEM WEDNESDAY
More informationRetirement Connections: A Professionally Managed Solution
Retirement Connections: A Professionally Managed Solution Expand your practice and build loyalty with an easy-to-use retirement plan for your small business clients For Financial Advisor use only. Not
More informationFiduciary toolkit for financial professionals
Fiduciary toolkit for financial professionals For financial advisor use only. Not for distribution to retail investors. Vanguard is your partner to help guide you and your clients in addressing fiduciary
More informationTarget-Date Funds: It s Time to Take a Closer Look
Target-Date Funds: It s Time to Take a Closer Look Executive summary Over the past few years, retirement plans have seen significant changes in their investment structures, as well as the level of fiduciary
More informationAllowing Retiring Employees to Test Drive an Annuity. by Melissa Kahn and Jody Strakosch
Retirement Policy Allowing Retiring Employees to Test Drive an Annuity by Melissa Kahn and Jody Strakosch If defined contribution (DC) plan sponsors haven t already done so, they soon will be giving serious
More informationA powerful combination: Target-date funds and managed accounts
A powerful combination: Target-date funds and managed accounts Authors: Anna Madamba, Ph. D., John Ameriks, Ph. D., and Stephen P. Utkus For investors seeking customized professional advice with their
More informationStatement of AXA Equitable Life Insurance Company Target Date Fund Joint Hearing. June 18, 2009
Statement of AXA Equitable Life Insurance Company Target Date Fund Joint Hearing June 18, 2009 Bringing Guaranteed Income Solutions into 401(k) Plans: Creating Awareness AXA Equitable Life Insurance Company
More informationNAIC Center for Insurance Policy and Research Symposium
NAIC Center for Insurance Policy and Research Symposium Lifetime Income Insurance Products and Emerging Issues Mark Shemtob, MAAA, A.S.A., EA Member, Lifetime Income Risk Jt. Task Force May not be reproduced
More informationGM Pension Settlement Actions
Consulting Retirement GM Pension Settlement Actions And Considerations for Plan Sponsors June 2012 On June 1, 2012, General Motors Co. (GM) announced a program that will settle approximately $26 billion
More informationA U.S. Perspective on Annuity Lifetime Income Guarantees
A U.S. Perspective on Annuity Lifetime Income Guarantees Jacob M. Herschler June 8, 2011 Mexico City Agenda Defined Benefit and Defined Contribution plan trends in the U.S. and prospects for longevity
More informationOversimplification in Target Date Funds Endangers Participants Retirement Savings
Oversimplification in Target Date Funds Endangers Participants Retirement Savings How are custom solutions evolving to mitigate risk? September 2015 Published by flexpath Strategies 2015 flexpath Strategies,
More informationThe Five Pillars of a Retirement Plan
The Five Pillars of a Retirement Plan An employee retirement plan can help: Recruit and retain valuable employees Bridge the gap between Social Security and retirement income needs, which are estimated
More informationNAIC Center for Insurance Policy and Research Symposium
NAIC Center for Insurance Policy and Research Symposium Lifetime Income Insurance Products and Emerging Issues Mark Shemtob, MAAA, A.S.A., EA Member, Lifetime Income Risk Jt. Task Force May not be reproduced
More informationImproving the Target Date Fund Selection. by Chris Karam
Improving the Target Date Fund Selection by Chris Karam The target date selection process has dramatically changed over the last five years aided by government regulations, an increase in the number of
More informationConsiderations for Plan Sponsors: CUSTOM TARGET DATE STRATEGIES
PRICE PERSPECTIVE April 2015 Considerations for Plan Sponsors: CUSTOM TARGET DATE STRATEGIES In-depth analysis and insights to inform your decision making. EXECUTIVE SUMMARY Defined contribution plan sponsors
More informationAre You in the Wrong Target-Date Fund?
Insights August 2014 Are You in the Wrong Target-Date Fund? Now Is a Good Time to Reevaluate TDFs may have different investment strategies, glide paths, and investment-related fees. Because these differences
More informationFoundations in Research for Regulatory Guidelines on the Design & Operation of Retirement Income Solutions in DC Plans
Foundations in Research for Regulatory Guidelines on the Design & Operation of Retirement Income Solutions in DC Plans By Steve Vernon, FSA Consulting Research Scholar Stanford Center on Longevity SEPTEMBER
More informationThe Four Pillars and Public Policy Prudential s positions on legislative and regulatory issues impacting retirement security in America
Prudential Financial The Four Pillars and Public Policy Prudential s positions on legislative and regulatory issues impacting retirement security in America Public policy affects many aspects of our everyday
More information401(k) Plan Administration: Fiduciary Responsibility and The Impact of Changes to Your Plan
401(k) Plan Administration: Fiduciary Responsibility and The Impact of Changes to Your Plan Presented by: Kirsten L. Vignec Shareholder Hill Ward Henderson Introduction Our discussion today focuses on
More informationEffective Due Diligence for Guaranteed Lifetime Income Options
Effective Due Diligence for Guaranteed Lifetime Income Options With ongoing market volatility and a continuing transition away from traditional pension plans, a new type of investment and savings vehicle
More informationAre Custom Target Date Funds Right for Your Plan?
Are Custom Target Date Funds Right for Your Plan? Customization to Better Meet Participant Needs January 2012 Hewitt EnnisKnupp, An Aon Company 2012 Aon Corporation Are Custom Target Date Funds right for
More informationTarget Date Funds: The Other 401(k) Scandal Why We Care: $1 Trillion Today Growing to $4 Trillion by 2020
Target Date Funds: The Other 401(k) Scandal Why We Care: $1 Trillion Today Growing to $4 Trillion by 2020 Ronald Surz President, Target Date Solutions Ron@TargetDateSolutions.com (949)488-8339 The First
More informationDimensional Managed DC
Pensions, benefits and social security colloquium 2011 Jan Snippe Dimensional Managed DC A Next-Generation Retirement Solution 26 September 2011 2010 The Actuarial Profession www.actuaries.org.uk Agenda
More informationDC Plan Demographics: Key Participant Behaviors That May Impact Retirement Success
DC Plan Demographics: Key Participant Behaviors That May Impact Retirement Success Peter T Walsh Institutional Portfolio Manager Global Asset Allocation 2014 FMR LLC. All rights reserved 681490.1.0 50-54
More informationGuaranteed Lifetime Income Options within Employment-Based Plans. Leveraging Advantages and Overcoming Challenges
Guaranteed Lifetime Income Options within Employment-Based Plans Leveraging Advantages and Overcoming Challenges January 2013 About the Insured Retirement Institute: The Insured Retirement Institute (IRI)
More informationTopics Covered. Two Ways To Be A Fiduciary 5/6/2015
ERISA Fiduciary Duty For Human Resources Professionals: Managing Risk and Implementing Cynthia A. Moore Jordan Schreier Dickinson Wright PLLC Topics Covered Who is a Fiduciary? What are Fiduciary Duties?
More information2013 Universe Benchmarks. Highlights 78% Measuring Employee Savings and Investing Behavior in Defined Contribution Plans
Consulting Outsourcing Retirement 2013 Universe Benchmarks Measuring Employee Savings and Investing Behavior in Defined Contribution Plans Highlights 81,240 76,020 57,150 2008 2009 2010 2011 2012 78% About
More informationService Provider Fee Disclosure Rules Now Final: Next Steps for Retirement Plan Fiduciaries. March 2012
Service Provider Fee Disclosure Rules Now Final: Next Steps for Retirement Plan Fiduciaries March 2012 Table of Contents Service Provider Fee Disclosure Final Rules 2 Background 2 Significant Clarifications
More informationTrends in Target-Date Funds. A 2014 Survey of Defined Contribution Plan Sponsors Sponsored by Janus and PLANSPONSOR Magazine
Trends in Target-Date Funds A 2014 Survey of Defined Contribution Plan Sponsors Sponsored by Janus and PLANSPONSOR Magazine Survey Overview & Methodology PLANSPONSOR Magazine conducts an annual survey
More informationRules on Penalties, Affordability, and Minimum Value
Up in Smoke? IRS Filters Out Most Wellness Programs From Affordability and Minimum Value Tests and Clears the Air on COBRA and Retiree Medical Coverage May 2013 Employers may only take into account whether
More informationBest practices for confident plan compliance
Best practices for confident plan compliance Ongoing efforts to expand retirement plan participation, promote transparency and enhance benefit security have increased responsibilities for plan sponsors.
More informationNow newly enhanced new functionality, new analytics, more intuitive design
TARGET DATE COMPASS SM EVALUATE AND SELECT TARGET DATE FUNDS WITH GREATER KNOWLEDGE AND CONFIDENCE SM Now newly enhanced new functionality, new analytics, more intuitive design Target date funds have quickly
More informationDe-risking Alternatives for Plan Sponsors Compliance Requirements. April 16, 2015 Presented by: Michael Falk, Erin Kartheiser, and Steve Flores
De-risking Alternatives for Plan Sponsors Compliance Requirements April 16, 2015 Presented by: Michael Falk, Erin Kartheiser, and Steve Flores Today s elunch Presenters Michael Falk Partner, Employee Benefits
More informationVerizon Announces $7.5 Billion Pension Settlement
Consulting Retirement Pension Settlement Trend Accelerates with Verizon Annuity Purchase Insights Into the Evolving Pension Transfer Environment October 2012 Verizon Announces $7.5 Billion Pension Settlement
More informationRETIREMENT INSIGHTS. Understanding your fiduciary role. A plan sponsor fiduciary guide
RETIREMENT INSIGHTS Understanding your fiduciary role A plan sponsor fiduciary guide ABOUT Perhaps no one topic in the employee benefits arena has drawn more attention and scrutiny over the last several
More informationVanguard Investment Perspectives. Retirement: From the mind of the TDF investor. Part 3: Insights from our target-date fund (TDF) survey
Vanguard Investment Perspectives Retirement: From the mind of the TDF investor Part 3: Insights from our target-date fund (TDF) survey This is the third of three papers in our investor insight series From
More informationFiduciary Guide. Helping to protect your plan. MetLife Resources
Fiduciary Guide Helping to protect your plan. MetLife Resources Table of Contents Introduction..........................................................................1 MetLife s Commitment.................................................................
More informationTHE WAGNER LAW GROUP A PROFESSIONAL CORPORATION DEFAULT INVESTMENTS AND INVESTMENT ADVICE UNDER PPA
DEFAULT INVESTMENTS AND INVESTMENT ADVICE UNDER PPA I. Default Investments. Fiduciary Relief. Plan sponsors are not responsible for the specific investment decisions made by participants if the plan complies
More informationUnderstanding fiduciary responsibilities
INSIGHTS SERIES Perspectives and viewpoints on investing in today s market Understanding fiduciary responsibilities A guide for retirement plan sponsors Offering a retirement savings opportunity in the
More informationRetirement Security: The Most Critical Items to the Obama Administration. Marcia S. Wagner, Esq.
Retirement Security: The Most Critical Items to the Obama Administration Marcia S. Wagner, Esq. Marcia Wagner MARCIA S. WAGNER is a specialist in pension and employee benefits law, and is the principal
More informationThe unique value of Target-Date Funds
The unique value of Target-Date Funds By Jake Gilliam, Senior Multi-Asset Class Portfolio Strategist supporting Charles Schwab Investment Management September, 2015 Target-Date Funds are excellent low-maintenance
More information2014 Universe Benchmarks. Highlights. Measuring Employee Savings and Investing Behavior in Defined Contribution Plans
Consulting Outsourcing Retirement 2014 Universe Benchmarks Measuring Employee Savings and Investing Behavior in Defined Contribution Plans Highlights About This Material Aon Hewitt is pleased to present
More informationBest Practices in Periodic Reviews of Participant Directed Retirement Plans
Volume 2013 May 29 Best Practices in Periodic Reviews of Participant Directed Retirement Plans Among the duties of a retirement plan fiduciary is the duty to monitor the administration of the plan and
More informationFor Institutional Use Only Not for Use with Retail Investors RETIREMENT FIDUCIARY FOCUS
AN ADVISOR S GUIDE TO UNDERSTANDING FIDUCIARY RESPONSIBILITIES IN A 401(k) PLAN For Institutional Use Only Not for Use with Retail Investors RETIREMENT FIDUCIARY FOCUS TABLE OF CONTENTS 1 Introduction
More informationRetirement Plan Fee Disclosure:
Retirement Plan Fee Disclosure: Preparing for Participant Questions The time clock for fee disclosure is ticking. Starting in 2012, the U.S. Department of Labor (DOL) is requiring retirement plan administrators
More informationAon Hewitt Retirement and Investment. 2015 Hot Topics in Retirement. Risk. Reinsurance. Human Resources.
Aon Hewitt Retirement and Investment 2015 Hot Topics in Retirement Risk. Reinsurance. Human Resources. Table of Contents Executive Summary.... 1 Financial Wellness and Overall Strategy.... 2 Defined Contribution
More informationRetirement Income Products:
Retirement Income Products: Which One Is Right for Your Plan? Volume 4, Number 1 Introduction As 401(k) plans have evolved from a supplemental retirement or capital accumulation plan to the sole retirement
More informationFee disclosure Q&A: Answering plan sponsor questions about Department of Labor regulations
Fee disclosure Q&A: Answering plan sponsor questions about Department of Labor regulations Spring 2012 U.S. Department of Labor (DOL) regulations outlining obligations of plan sponsors and service providers
More informationValue of an Independent ERISA Fiduciary Advisor
What s the ROI of an Independent ERISA Fiduciary Expert? There are at least six key benefits that employers and their employees may receive with their retirement plans after hiring a skilled and experienced
More informationThe growing demand for retirement income solutions: Options for the plan sponsor
Institutional Retirement and Trust The growing demand for retirement income solutions: Options for the plan sponsor The need for retirement income solutions has become more evident each year. Today, fewer
More informationResponse to Request for Information Regarding Lifetime Income Options for Participants and Beneficiaries in Retirement Plans
Response to Request for Information Regarding Lifetime Income Options for Participants and Beneficiaries in Retirement Plans Department of Labor RIN 1210-AB33 APRIL 29, 2010 General Questions 1. From
More informationNotice to All Employees Eligible to Participate in the Halliburton Retirement and Savings Plan
Notice to All Employees Eligible to Participate in the Halliburton Retirement and Savings Plan Halliburton Company (the Company ) has made saving for retirement under the Halliburton Retirement and Savings
More informationERISA Retirement Plans: Fiduciary Compliance and Risk Management for Investment Fund Selection and Fee Disclosures
Presenting a live 90-minute webinar with interactive Q&A ERISA Retirement Plans: Fiduciary Compliance and Risk Management for Investment Fund Selection and Fee Disclosures Discharging Fiduciary Duties
More informationTARGET DATE COMPASS SM
TARGET DATE COMPASS SM METHODOLOGY As of April 2015 Any and all information set forth herein and pertaining to the Target Date Compass and all related technology, documentation and know-how ( information
More informationConsiderations in the Use of Self-Directed Brokerage Accounts in Participant-Directed 401(k) Plans
Considerations in the Use of Self-Directed Brokerage Accounts in Participant-Directed 401(k) Plans Chuck Rolph, J.D. Director, Advanced Consulting Group Nationwide Financial Background Today's typical
More informationHow To Manage The Risks Of An Erisa Fiduciary
Mitigating fiduciary liability for defined contribution plan investment decisions Vanguard commentary June 2013 Executive summary. In recent years, several high-profile class-action lawsuits have alleged
More informationDo Diversified Growth Funds solve the diversification problem?
Aon Hewitt Retirement and Investment Do Diversified Growth Funds solve the diversification problem? Risk. Reinsurance. Human Resources. Do Diversified Growth Funds solve the diversification problem? Diversified
More informationDOL s Retirement Policy Agenda What Plan Sponsors and Plan Advisors Need to Know. Bradford Campbell Drinker Biddle & Reath
DOL s Retirement Policy Agenda What Plan Sponsors and Plan Advisors Need to Know Bradford Campbell Drinker Biddle & Reath Hon. Bradford P. Campbell Counsel (202) 230-5159 Bradford.Campbell@dbr.com Mr.
More informationMONEY MANAGEMENT INSTITUTE 1737 H Street, NW, 5 th Floor, Washington, DC 20006 Phone: (202) 822-4949 Fax: (202) 822-5188 www.moneyinstitute.
MONEY MANAGEMENT INSTITUTE 1737 H Street, NW, 5 th Floor, Washington, DC 20006 Phone: (202) 822-4949 Fax: (202) 822-5188 www.moneyinstitute.com August 28, 2013 Ms. Laura A. Henry Analyst U.S. Government
More informationThe Role of Roth 401(k) in Retirement Savings
Point of View The Role of Roth 401(k) in Retirement Savings Introduction Most financial experts agree that a Roth 401(k) savings feature can provide a significant benefit to a variety of savers from high
More informationInvestment Policy Statements. for DC Plans
Investment Policy Statements Presented by: for DC Plans Linda Ruiz-Zaiko, President Bridgebay Financial, Inc. ruiz-zaiko@bridgebay.com www.bridgebay.com Marlow Kee, CPA Director of Finance PATH www.path.org
More informationVanguard research August 2015
The buck value stops of managed here: Vanguard account advice money market funds Vanguard research August 2015 Cynthia A. Pagliaro and Stephen P. Utkus Most participants adopting managed account advice
More informationTreasury and IRS Issue Final Regulations for Reporting Compliance With Affordable Care Act Mandates
Treasury and IRS Issue Final Regulations for Reporting Compliance With Affordable Care Act Mandates April 2014 The Treasury Department and the Internal Revenue Service (IRS) issued final regulations on
More informationManaging Retirement Security with an Income Advantage
Managing Retirement Security with an Income Advantage The VantageTrust Retirement IncomeAdvantage Fund 0186480-00001-00 How can you make sure that you have the tools necessary to achieve your desired standard
More informationIRS and Department Of Labor Issue Automatic Enrollment and Investment Guidance
IRS and Department Of Labor Issue Automatic Enrollment and Investment Guidance By Cynthia Marcotte Stamer Recent guidance from the U.S. Department of Labor ( Labor Department ) and Internal Revenue Service
More informationMay 3, 2012. CC:PA:LPD:PR (Reg-115809-11) Room 5203 Internal Revenue Service PO Box 7604 Ben Franklin Station Washington DC 20044
May 3, 2012 CC:PA:LPD:PR (Reg-115809-11) Room 5203 Internal Revenue Service PO Box 7604 Ben Franklin Station Washington DC 20044 RE: Longevity Annuity Contracts To Whom It May Concern: The American Academy
More informationSolving the fiduciary riddle
The right choice for the long term An adviser resource for employer-sponsored retirement plans Solving the fiduciary riddle The retirement plan industry is rapidly evolving, driven largely by both recent
More informationAUTOMATIC ENROLLMENT 401(k) PLANS. for Small Businesses
AUTOMATIC ENROLLMENT 401(k) PLANS for Small Businesses Automatic Enrollment 401(k) Plans for Small Businesses is a joint project of the U.S. Department of Labor s Employee Benefits Security Administration
More informationDiscretionary Trustee Services
Discretionary Trustee Services An Overview for Plan Sponsors With the ever-changing rules governing retirement plan many plan sponsors are looking for ways to reduce their liability and risk. Busey Wealth
More informationTarget-date funds: the to versus through dilemma
November 14 Target-date funds: the to versus through dilemma Leo M. Zerilli, CIMA Head of Investments John Hancock Investments Recent U.S. Department of Labor guidance on target-date funds provides helpful
More informationTarget Date Funds: Debating To Versus Through
Target Date Funds: Debating To Versus Through Glenn Dial, Sr. VP, Head of Retirement Product Business Development, Allianz Global Investors Distributors LLC Scott Brooks, Head of US Retail Client Relations
More informationYour ERISA Attorney Isn t Going Anywhere Soon
Your ERISA Attorney Isn t Going Anywhere Soon PANELISTS: Jeremy P. Blumenfeld, Partner, Morgan Lewis & Bockius John E. Schadl, Principal and Head of ERISA and Fiduciary Services, Vanguard Marcia Wagner,
More informationDo you know if your 401k plan fees are reasonable?
Presents Do you know if your 401k plan fees are reasonable? Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC Wealth Management - Retirement Plan Consulting - Investments
More informationRETIREMENT PLAN FIDUCIARY GUIDE
RETIREMENT PLAN FIDUCIARY GUIDE CONGRATULATIONS You re sponsoring a valuable retirement plan for your employees, and BB&T is delighted to assist you in that effort. Employees will appreciate this important
More informationFiduciary Responsibilities Review, Training & Best Practices
Fiduciary Responsibilities Review, Training & Best Practices 1 TRUST LAW HISTORY & BACKGROUND History & Background» 12 th Century England Crusaders would title land to others in his absence with an understanding
More informationUnderstanding the Fees Charged Within Fiduciary Management
Aon Hewitt Delegated Consulting Services Understanding the Fees Charged Within Fiduciary Management January 2014 Risk. Reinsurance. Human Resources. Table of contents Overview...2 What are the fee components?...3
More informationGAO DEFINED CONTRIBUTION PLANS. Key Information on Target Date Funds as Default Investments Should Be Provided to Plan Sponsors and Participants
GAO United States Government Accountability Office Report to Congressional Requesters January 2011 DEFINED CONTRIBUTION PLANS Key Information on Target Date Funds as Default Investments Should Be Provided
More information401(k) Fiduciary Briefing
401(k) Fiduciary Briefing 7 Steps to Help Plan Sponsors Mitigate Risk Presented by: John A. Frisch, CPA/PFS, CFP, AIF, PPC TM President, & Managing Partner, Qualified Plans Common 401(k) Plan Objectives
More information