Log. Present by RPAG Member:

Transcription

1 Log Present by RPAG Member: Robert Greulich Managing Member The Pinnacle Planning Group, LLC 2013 Retirement Plan Advisory Group. All rights reserved. RPAG Registered Representative and Investment Advisory Services fered through Hornor, Townsend & Kent, INC. (HTK) Registered Investment Advisor, Member FINRA/SIPC W. Bryn Mawr Suite 1200, Chicago, IL Retirement Plan Advisory Group (RPAG) and The Pinnacle Planning Group, LLC are independent HTK. Please note all contents in this analysis are prepared by RPAG and are not necessarily representative the views and opinions HTK and its affiliated entities. This information is for educational purposes only, and is not representative specific financial, tax or legal advice A4CM E2

2 Disclosures The Pinnacle Planning Group, LLC is a member Retirement Plan Advisory Group (RPAG ). The consulting services described in this presentation reflect services that we will provide to your company as a result our membership with RPAG. This includes, but is not limited to, investment due diligence, RFP and fee benchmarking, plan design and fiduciary review and communication services. An investor should carefully consider the investment objectives, risks, charges and expenses carefully before investing. Go to the investment company s website for a prospectus that contains this and other information. The prospectus should be read carefully before investing. 1

3 At-a-Glance When you entrust your plan to a member the RPAG alliance, you gain three keystone advantages: Knowledge Our 900 advisors represent 465 firms from across the nation that are dedicated to serving over 25,000 retirement plans with strategic, expertly crafted consulting services. Expertise Earned through skillful and steadfast management more than $115 billion in collective retirement assets under influence. Ingenuity Driven by robust technology, systems and services to help create successful retirement plan experiences for plan sponsors and participants alike. Legend RPAG members *Updated 6/26/14 2

4 Service Model Investment Advice Fiduciary Compliance Fiduciaries rest assured Participant Outcomes Participants achieve retirement income potential Plan Design Plan design consistent with company philosophy Benchmarking Provider that balances fees, services & investments Select skilled investment managers 3

5 Service Structure Client Plan Consultant ERISA Department Investment Department RFP Analysis Department Non Qualified Department 4

6 Service Plan At the start each relationship we set goals and objectives via a written Service Plan. We then track the timing and frequency each service delivered and post all deliverables on our secure plan sponsor portal. 5

7 RFP/Benchmarking

8 Fee Benchmarking and RFPs BENCHMARKING is not about the lowest fees, but the balance cost to features provided. 7

9 B3 Provider Analysis Report Assists with fiduciary obligation to ensure fee reasonableness Connects to over 100 bundled and unbundled recordkeepers and TPAs Handles start-up to mega-large plans Over 400 data points Side-by-side comparison for thorough perspective 8

10 Live Bid vs. Average Average fee benchmarking is based on average plan design and average demographics. Live bid benchmarking is based on your plan design and your demographics. fees Live Bid Average Represents 25% to 40% plan costs plan assets 9

11 Provider Analysis Process Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Initial discussion and selection service providers Information gathering RFP questionnaire sent to qualified service providers RFP questionnaires received Initial analysis created Initial analysis presented Semi-finalist service providers selected Final analysis semi-finalists created Final presentation RFP analysis Finalist service providers selected Presentations by finalists Final decision made Implementation meeting with winning service provider Begin conversion process 0 weeks 4 weeks 8 weeks 10

12 Benchmarking or RFP Benchmarking Stay with your current provider. Potential negotiated outcomes Lower fees Enhanced investment lineup Enhanced services RFP Considering new provider. Expanded list providers Additional qualitative analysis Finalist presentations Site visits Costs Investment Management Recordkeeping Core Competencies Compliance Technology Services Communication Financial Strength/ Experience Delivery System Compatibility Cornerstones for screening providers Product Excellence Demographic Match 11

13 Overview Industry Fees Investment Management: A percentage assets invested. Deducted from the return. 12b-1 Fees 12b-1: Paid by mutual funds from fund assets for broker commissions, marketing expenses and other administrative services. Asset / Wrap Fee: Additional fees layered on top total investment fees. Investment Management Fee Shareholder Servicing Fees Sub-TA (Agency Transfer Fees) Shareholder Servicing: Revenue shared by the mutual fund company with the service provider. Sub-TA: Recordkeeping and other services related to participant shares ten go to a third party called a sub-transfer agent. The above listed fees may not apply to all investments. Check the prospectus or fact sheet to determine what fees are being charged. 12

14 Investment Due Diligence

15 Investment Due Diligence Process QUANTITATIVE Sophisticated Mathematics INVESTMENT UNIVERSE 20,000+ Investment POLICY Statement Investment Review COMMITTEE Plan Investment MENU QUALITATIVE Internal Research 14

16 Scorecard System Proprietary institutional scoring system Identifies skillful managers Powerful & compelling data (an MRI vis-à-vis an x-ray) The Scorecard ranking evaluates investments on a scale 0 to 10 in core asset classes, including asset allocation investments Quantitative Factors Qualitative Factors Style Risk/Return Peer Group Ranking Qualitative Ranking 1. Style Analysis 2. Style Drift 3. R-Squared 4. Risk/Return 5. Up/Down Capture 6. Information Ratio 7. Returns 8. Information Ratio 9 &10. Awarded for factors such as manager tenure and fund expenses, among other criteria 15

17 Scorecard System The Fiduciary Investment Review includes recommendations for fund additions, deletions and replacements Contains a variety advanced report features Market Review Scorecard Score history Mapping strategies Asset class comparisons Fund fact sheets Large Cap Equity A LCEAV Mid Cap Value Opportunity MCVOV Mid Cap Equity Value MCEVV Small Mid Cap Growth A SMCGV U.S. Small Cap Value LCEAV Small Cap Value Equity Inst l SCVEV Small Cap Stock Fund SCSFV Small Cap Growth Stock Fund A SCGSV 16

18 2014 Back Study - Process OBJECTIVE to support the Scorecard System as a process to select skillful money managers and to support the finding that past performance is not indicative future returns Study Large Cap Value Asset Class Top 9 Top 9* Russell 1000 Value Random sampling 50 funds Minimum five year performance history Compare performance results and analytics Evaluate funds through a full market cycle Performing Funds based on historical returns vs Scored Funds based on Scorecard System Q Q Q Observation period Evaluation period *There were nine funds that consistently scored10s over the observation period 17

19 2014 Back Study - Results Evaluation Period Q4/2011 Q4/ % 24.00% % 23.00% 22.00% 21.00% 20.00% 24.79% 22.89% % 20.74% 24.30% Russell 1000 Value Benchmark Large Cap Value (LCV) Sample Average Top 9 LCV Funds Based on Historical Returns Average Top 9 Funds Based on Scorecard System The two year evaluation period was a short horizon and active managers were out performed by the index. However, the value going beyond returns was evident in this Back Study. 18

20 Independent Investment Due Diligence Clients rely on our investment review process to: ENHANCE Investment Opportunities MANAGE & CONTROL Risk REDUCE Exposure to Liability 19

21 Fiduciary Compliance

22 Fiduciary Fitness Program guidance DIAGNOSTIC ACTION PLAN EDUCATION advice Fiduciaries rest assured. 21

23 Fiduciary Diagnostic Periodic compliance gap analysis Ensures that everything is in order for safe and secure operation Covers hundreds fiduciary requirements in 20+ separate education modules 22

24 Fiduciary Plan Review The Fiduciary Plan Review is an all-encompassing deliverable that provides education, documentation and plan metrics to meet fiduciary responsibilities and improve operational efficiency. Evaluates plan design and compliance issues Charts participation, deferral rates and plan performance Benchmarking Total Plan Cost 404(c) Notice and Statement Compliance Checklist Fiduciary File Checklist Investment Committee Charter Ongoing Best Practices 23

25 Committee Education Multi-year process covering all fiduciary requirements in over 20 modules: Fiduciaries, Overview Fiduciary Responsibilities Fiduciary Liabilities Selecting & Monitoring Service Providers Fees & Expenses Selecting & Monitoring Investments ERISA 404(a) & 404(c) Compliance Maintaining Your Fiduciary File Investing in Employer Securities & Real Property Minimizing Risk Strategies Claims & Appeals Procedures Addressing the Participant Experience Prohibited Transactions 408(b)(2) Disclosure Regulations 404a-5 Disclosure Regulations Controlled Groups Mergers & Acquisitions Timely Deposit Employee Elective Deferrals Exclusion Employees from Making Elective Contributions Target Date Funds DOMA 24

26 Documentation Everything required for compliance including: Investment Committee Charter Investment Policy Statement Compliance Checklist Fiduciary File Checklist 404(c) Notice and Statement Executive Summaries And more 25

27 Fiduciary Briefcase Secure online portal Functions as your virtual filing system for Meeting summaries Newsletters Compliance documentation Employee communications And more 26

28 Plan Design

29 Plan Design Connect plan design to EMPLOYER CULTURE & VALUES PARTICIPANT OUTCOME 28

30 PLANavigator Interactive system that shifts the conversation regarding retirement income potential from the participant to the plan sponsor Set meaningful goals that will enhance plan outcomes PLAN ASSETS TOTAL REPLACEMENT RATIO PARTICIPATION EMPLOYER COST PARTICIPANT ACCOUNT BALANCES 29

31 PLANavigator Create high impact plans that maximize participant retirement income potential Difficult participant decisions are simplified while still accommodating specific preferences Minimum Deferral Loans & Hardships Automatic Enrollment PLANavigator Considerations Employer Match Automatic Escalation Investment Re-enrollment Employer Cost Participation 30

32 Education & Communication

33 Newsletters and Employee Memos Monthly Plan Sponsor Newsletters keep clients abreast on the latest retirement plan news, legislative updates, and industry trends Each newsletter includes sample employee memos that you can print and distribute to employees Contributing writers and editors represent a staff one dozen pressionals with an average industry tenure over 10 years 32

34 Service Solutions Group and Individual Education Meetings Employee Communication Strategies RPAG members maximize benefits for plan participants! Asset Allocation and Investment Guidance Financial Planning Bilingual Consultants Education Modules and Employee Memos 33

35 Concierge-Level Communication CUSTOM CONTENT EDUCATION ADVICE GROUPS INDIVIDUALS Dedicated Education Staff 34

36 Conclusion

37 The RPAG Difference Retirement Plan Advisory Group, and our hundreds expert advisors nationwide, are united in our mission to build a winning retirement plan for employers and for employees. Protection Many. Trust in One. Protect fiduciaries from financial loss Ensure plan efficiency and compliance Minimize total plan cost Knowledge. Expertise. Ingenuity. Enhance investment opportunities Maximize benefits for plan participants Promote understanding 36