Helping you fulfill your fiduciary duties online

Transcription

1 Retirement Plans Fiduciary Series Website User Guide Helping you fulfill your fiduciary duties online For Plan Sponsor Use Only

2 Getting started Accessing the site Leveraging reports and tools Interpreting reports 1 fiduciaryseries.com

3 Getting started When it comes to balancing fiduciary responsibilities like selecting, monitoring and replacing the investment options in a retirement plan, do you wish you had a helping hand? The Nationwide Financial Fiduciary Series SM website can help you navigate the decision-making process. And more importantly, the site can help you fulfill other fiduciary responsibilities, such as recordkeeping, review of plan expenses and timely submission of plan contributions. This User Guide will focus on helping you access the Fiduciary Series SM website and learn more about how to monitor investment and document due diligence. You ll be able to manage available investment options to determine if they are still appropriate for the plan and participants by reviewing available reports. You ll also learn more about available checklists that can help maintain compliance. For more information about the available underlying investment options, including all charges and expenses, please consult a fund prospectus. Fund prospectuses and additional information relating to your retirement plan can be obtained by contacting your pension representative or by visiting nationwide.com. Before investing, carefully consider the fund s investment objectives, risks, charges and expenses. The fund prospectus contains this and other important information. Read the prospectus carefully before investing. fiduciaryseries.com 2

5 Accessing the site Visit fiduciaryseries.com and, if you re a returning user, simply enter your tax ID number (TIN) and password on the homepage. If you ve forgotten your password, please contact your third-party administrator. If you re a first-time user, follow these steps to create an account: l 1. Click First time accessing your plan? under the login fields 2. Enter your firm s TIN in the appropriate field; do not include dashes or spaces 3. Leave the default password 1234ABCD in the appropriate field and click Submit 4. Review the terms of agreement; click Continue to accept and proceed 5. Enter the default password and then create a new password; choose six to 10 characters containing at least one alphabetic character and at least one numeric character 6. Submit the new password again and click Continue to enter the site Keep in mind Each firm is permitted only one username and password. This information will need to be shared by all your plan fiduciaries or others needing access to the site. fiduciaryseries.com 4

7 Leveraging reports and tools After successfully logging on to the site, you ll arrive at the Plan Home page. From there, you ll have access to: Quarterly Status Summary The Quarterly Status Summary provides a snapshot of the ranking and status of your plan s investments. There, you will see your investments batting averages and statuses, represented by icons if they have reached below average status and require your attention. Or, if all funds are performing adequately, you will see a column of icons. To see a detailed analysis of a fund s batting average, you can click on any or to learn more. For more information about batting average calculations, see the next section called Interpreting Reports. Pass Above Average batting average against peers (greater than.250), Meets minimum fund analysis criteria outlined in Investment Policy Statement Fail Below Average batting average against peers (less than.250), Does Not Meet minimum fund analysis criteria outlined in Investment Policy Statement Warning Sign indicator secondary fund analysis On Available Investments, Quarterly Status Summary, Plan Overview reports: indicates fund has at least one Warning Sign, Detailed Analysis report details quantity and characteristics of Warning Sign(s) NOTE: this will only appear on the aforementioned reports. fiduciaryseries.com 6

8 Leveraging reports and tools Plan Overview The Plan Overview report details how your employees are using the plan s available investment options. Information collected from this report can highlight portfolio diversification issues and employee education needs. Parent share class Indicates a fund in which the share class offered in the Nationwide product is different than the share class displayed. This is typically an indication of a fund share class with less than 3 years of performance history, in which case the history for the parent share class with the same fund name has been substituted. The two funds have identical investment objectives and holding but may have different fund expenses, which would affect the performance. Please consult your other Nationwide materials and a prospectus for information on the true share class. Blocked fund Specific to individual plans: Fund is no longer available for new investment by participants but assets remain in the fund. 7 fiduciaryseries.com

9 Available Investments This is the list of investment options you can choose from when creating and maintaining your plan s portfolio. The list displays the fund asset classes, peer groups and historical performance. These details can help you compare your options. You may encounter a situation that requires further research in order to determine if an investment option is still appropriate for the plan. Much like the process of initially selecting your portfolio, use the Available Investments page as a first step in identifying other investment options that may be appropriate for your plan. Your plan s financial advisor and plan administrator can help communicate and implement appropriate changes with Nationwide. fiduciaryseries.com 8

10 Leveraging reports and tools Detailed Analysis When you click on a or status icon in the Quarterly Status Summary or Plan Overview sections, you ll see a Detailed Analysis report that provides: > Warning signs, represented with icons, which highlight issues potentially impacting a fund s continued performance against its peers > Relevant investment data and supporting detail behind any warning signs > Relative peer group and index performance > Indication as to whether or not the fund is following its stated style, which is particularly useful to ensure the fund is suitable for use within an asset allocation program > Overall batting average and status to help determine if the fund meets the model Investment Policy Statement criteria > Risk-adjusted return rankings illustrating performance of the fund manager Consider the timing of this information when scheduling and completing your reviews. All of the reports and underlying performance information and analysis are made available each calendar quarter. Due to the depth of the analysis, the reports are updated approximately 30 days after the end of the quarter. 9 fiduciaryseries.com

11 Reference Tools This section provides access to educational presentations and electronic versions of this User Guide and the accompanying Education Guide, along with a Fiduciary Responsibility Success Quiz, a full glossary document and other pieces of information related to Fiduciary Series. Support Tools Plan fiduciaries are evaluated many ways, but the most important criteria to the U.S. Department of Labor is prudence in decision-making. Plan fiduciaries are not judged on how well investments perform, but whether they acted in a similar manner to other prudent plan fiduciaries in the same situation with the same knowledge. As a result, it is imperative for plan fiduciaries to demonstrate prudence through judicious record keeping. You can do this by conducting periodic and consistent formal reviews or meetings. You should also maintain hard or soft copies of the decision-making process and information reviewed leading to the decision. The following resources can help facilitate this ongoing documentation: > Plan Fiduciary Meeting Checklist can serve as an agenda of items to be covered > 404(c) Q&A Brochure can be customized to your plan and distributed as part of ERISA 404(c) compliance > Due Diligence File Checklist provides a list of items to maintain on file to support practices and decisions > What Use is an Institutional Trustee? explains the reasons to consider using an institutional trustee > 404(c) Checklist can help facilitate compliance with ERISA 404(c) fiduciaryseries.com 10

13 Interpreting reports Using proven methodology previously available to only the large-plan market, the Fiduciary Series website simplifies a comprehensive and systematic process to help you prudently select, evaluate and monitor funds more quickly and easily. One way it does that is through the use of a batting average to evaluate the investments. Here s how it works: each fund in the Morningstar fund universe with three or more years of performance history is evaluated and monitored on a quarterly basis and assigned an overall fund batting average and status rating. This lets you quickly know if a given investment passes the criteria outlined in the model Investment Policy Statement. So what s behind the batting average? Six evaluation measures* are condensed into a single number that summarizes how well each fund has historically balanced expenses, returns and risk compared to other funds in its S&P peer group. These six measures quantify: > Relative operating expenses > Total returns > Risk-adjusted performance How exactly does a fund pass or fail the IPS criteria? Above Average Quality Fund: > Equity, bond, and hybrid funds: overall fund batting average of or higher > Index funds: five-year tracking error of 1.00% or lower (use three years if the fund has less than five years of performance history) > Cash equivalents: expense ratio less than or equal to 0.80% Below Average Quality Fund: > Equity, bond, and hybrid funds: overall fund batter average less than > Index funds: five-year tracking error greater than 1.00% (use three years if the fund has less than five years of performance history) > Cash equivalents: expense ratio greater than 0.80% Warning Signs: First, the following fund screening criteria* are evaluated and monitored to reveal potential risks: high operating expenses, high portfolio turnover, high performance volatility, high individual holding concentration, high economic sector concentration, low style purity, low asset base, low manager tenure, high duration bet, and low credit quality average. Then this additional information is condensed and provided in the form of warning signs to help highlight potential barriers preventing the fund from continuing to operate effectively. Generally, when selecting between two similar funds with similar batting averages, the plan fiduciary may wish to choose the fund with fewer warning signs. * Six measures are expense ratio, Sharpe ratio, trailing performance, rolling information ratio, performance consistency and rolling section return. Definitions for these and other concepts can be found in the Glossary in the Reference Tools section. fiduciaryseries.com 12

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15 Need help? If you need further assistance with your plan, your fiduciary responsibilities, or the Fiduciary Series website, please contact your financial advisor, third party administrator, or Nationwide representative. For additional fiduciary education resources, visit: nationwide.com/fided fiduciaryseries.com 14

16 The Nationwide Financial Fiduciary Series is a service mark of Nationwide Life Insurance Company. The Nationwide Financial Fiduciary Series is made possible by Nationwide and is protected by copyright. The materials are designed for exclusive use with Nationwide products, programs and services. The Nationwide Financial Fiduciary Series is general in nature and not intended to constitute legal or investment advice on any particular matter. Neither Nationwide nor any of its representatives provide tax, financial or legal advice. The Nationwide Financial Fiduciary Series is not for participant use. Each fund is evaluated on the basis of six evaluation measures (fund evaluation measures) that quantify the relative operating expenses, total returns and risk-adjusted performance of a fund within its peer group. The total returns of cash equivalents and index funds are evaluated against their specific market benchmarks. The evaluation methodology is not an attempt to predict a fund s future potential; it summarizes how well each fund has historically balanced expenses, returns and risk. The six evaluation measures together provide a systematic process to evaluate and monitor funds using generally accepted investment principles and modern portfolio theories. For each of the six evaluation measures, all funds are ranked using percentile rankings ranging from 1% (best) to 100% (worst) within their respective peer group to determine each fund s relative performance. Percentile ranks for each evaluation measure are translated into batting averages for presentation purposes. Batting averages range from (best) to (worst). The six evaluation measures are equally weighted to compute each fund s overall batting average within its peer group, which is used to determine each fund s status rating. This ranking system provides for appropriate comparisons of funds with similar objectives and investment styles. The batting average is not adjusted for any plan or Nationwide charge s or expenses (if applicable). This report must be accompanied by the Fund Evaluation and Monitoring Methodology which is available at Detailed batting average information for each fund can also be obtained at this website. Federal income tax laws are complex and subject to change. The information in this brochure is based on current interpretations of the law and is not guaranteed. Neither the company nor its representatives give legal or tax advice. Please consult your attorney or tax advisor for answers to specific questions. Certain underlying investment options are not publicly traded mutual funds and are not available directly for purchase by the general public. They are only available through variable annuity/variable life insurance policies issued by life insurance companies or in some cases, through participation in certain qualified pension or retirement plans. The Nationwide Group Retirement Series includes unregistered group fixed and variable annuities and trust programs. The unregistered group fixed and variable annuities are issued by Nationwide Life Insurance Company. Trust programs and trust services are offered by Nationwide Trust Company, FSB, a division of Nationwide Bank. The general distributor for variable products is Nationwide Investment Services Corporation, member FINRA. Nationwide Mutual Insurance Company and Affiliated Companies, Home Office: Columbus, OH Nationwide, the Nationwide N and Eagle and Nationwide is on your side are service marks of Nationwide Mutual Insurance Company Nationwide PNM-0120AO.8 (02/15) FOR PLAN SPONSOR USE ONLY