The Services Available to Your 401(k) Plan

Transcription

1 The Services Available to Your 401(k) Plan Spectrum Group at Graystone Consulting a business of Morgan Stanley Smith Barney LLC Transforming Complex Challenges into Practical Strategies

2 By offering your employees a retirement plan, you are providing them with the opportunity to save for a secure retirement. You play a fundamental role in managing this essential employee benefit and it is important that you understand your obligations as the plan s fiduciary. According to the Employee Retirement Income Security Act of 1974 (ERISA), fiduciaries of 401(k) plans must carry out their duties prudently and act in the best interest of plan participants. Fiduciary responsibilities can include: choosing a provider to administer the plan, selecting an appropriate menu of investments and monitoring such providers and investments on an ongoing basis. It has been said that ERISA s prudence standard is one of the highest duties known to the law. Fulfillment of fiduciary duties will generally be measured by the steps a fiduciary takes to meet its obligations and whether a fiduciary has made informed and reasoned decisions. In fact, the Department of Labor and the courts have taken the position that fiduciaries without the knowledge or experience to make sound decisions have a duty to seek expert assistance. specialist. For many plan sponsors, investment and other fiduciary responsibilities can seem overwhelming. That s where Spectrum Group can help. Spectrum Group can provide guidance and information to help you meet your fiduciary responsibilities. We know you re busy managing your business and that you may not have the experience or the time to do the necessary research to make the right decisions. Spectrum Group is one of the teams of Graystone Consulting, the institutionally-focused business of Morgan Stanley Smith Barney. We are equipped with the tools and experiences to help you make informed investment decisions as well as address your other plan responsibilities. You can feel confident knowing that Spectrum Group is committed to putting our resources and experience to work for your retirement plan. For example, when making investment decisions, a fiduciary who lacks investment experience should hire an investment SPECTRUM GROUP AT GRAYSTONE CONSULTING 3

3 Morgan Stanley and Smith Barney have joined forces to create a new industry leader. With a combination of more than 130 years of experience has as emerged as one of America s largest investment firms and has consistently demonstrated leadership in all areas of financial services. Morgan Stanley Smith Barney, LLC is a diversified financial services company and one of the world s leading providers of investment services. Graystone Consulting a business of Morgan Stanley Smith Barney delivers a suite of specialized tools and capabilities developed specifically for institutional investors, which can help you and your employees build a robust retirement savings strategy. SPECTRUM Upon request, Spectrum Group at Graystone Consulting can offer any of the following services to your retirement plan. Spectrum Group at t Graystone Consulting GROUP SPECTRUM GROUP AT GRAYSTONE CONSULTING 4

4 Evaluation Needs Assessment To derive the maximum benefit from your retirement plan, it is important to select the most appropriate features and services for your business. Spectrum Group can offer valuable guidance by identifying and evaluating your company s needs. Examine the history of your business and goals for your plan Review your retirement plan objectives Analyze the demographics and investment behavior of your employees Investment Management Investment Policy Statement An investment policy statement clearly defines plan goals and investment parameters and provides the plan investment committee with guidelines for investment management decisions. It is also an effective way to ensure your investments are meeting your plan objectives on an ongoing basis. Spectrum Group can help you develop this important document. Provide a sample investment policy statement Help identify specific goals Assist in selecting a broad range of asset classes to be represented in your retirement plan Identify investment parameters to help measure success Establish a process to periodically review plan investments against stated goals Investment Services Spectrum Group has the ability to help you select the appropriate range of potential investment options to meet your plan s specific needs. Educate on general investment concepts such as diversification, risk, asset allocation and historical rates of return Identify multiple investments within each asset class from the provider s fund universe that are consistent with your plan s investment policy statement Help ensure that the funds meet the requirements of Section 404(c) of ERISA Diversification does not guarantee a profit or protect against a loss. Past performance is guarantee of future results. SPECTRUM GROUP AT GRAYSTONE CONSULTING 5

5 Plan Management Investment Monitoring While selecting appropriate investments is critical to the success of your plan, monitoring each investment option is just as important. The criteria you use to monitor your investment options should be consistent with the goals outlined in your investment policy statement. Spectrum Group can provide the tools and guidance to help you maintain an appropriate range of investment options within your plan. Review periodic reports to help you monitor the plan s investment performance Conduct searches to replace investment options that are no longer consistent with the plan s investment policy statement Provide investment education and research to encourage sound decisionmaking Fiduciary Audit File One of the best ways to demonstrate compliance with the appropriate standards under ERISA is through adequate written documentation. This can be compelling evidence of an adherence to a prudent process and an effective argument against allegations of a fiduciary breach. Spectrum Group can help you establish a fiduciary audit file. Organize key plan records Help identify areas requiring further Development Demonstrate that policies and procedures were established Document adherence to those policies and procedures Issue Resolution While the ongoing maintenance of your plan is important, at Spectrum Group we understand that it is not your only responsibility. Spectrum Group can help you resolve issues that arise in connection with the day-to-day activity of your plan. Interface with your plan provider to address your questions Seek corrective action for any deficiencies in service Provide ongoing support SPECTRUM GROUP AT GRAYSTONE CONSULTING 6

6 Plan Participation Enrollment Meetings & Participant Education Participation is vital to the success of any plan and a strong participant education program contributes to this success. Now more than ever, investors are looking for assistance in reaching their financial goals. Spectrum Group can help your employees make informed decisions by educating them on the features of their plan and basic retirement planning concepts. Explain your plan s features Review the importance of diversification and other asset allocation strategies Reinforce the benefits of participation and increasing contributions Encourage the use of retirement planning Strategies Strategic Enhancements While a good education program is important, it may not always help to ensure a successful plan. If you are concerned about low participation rates, low deferral rates and whether your employees are properly diversified, Spectrum Group can introduce strategies with the potential to improve the health of your plan. Review plan demographics and asset allocation to identify areas for improvement Recommend appropriate strategies including automatic enrollment, automatic deferral increases and default investment options Help you monitor the impact of the strategies you choose to implement Investment Seminars & Re-Enrollment Meetings One of the best ways to encourage your employees to maximize the benefit of their retirement plan is through in-person meetings and seminars. Spectrum Group can provide continuing education for your existing employees and enrollment meetings for new employees. Reinforce concepts presented in initial enrollment meetings Offer programs to further employees understanding of financial markets and personal financial planning strategies Assist retiring employees with retirement plan distribution strategies SPECTRUM GROUP AT GRAYSTONE CONSULTING 7

7 Meet Your Financial Advisor Team An experienced institutionally-focused team backed by the strength and resources of an industry leader in investment advice. James Pupillo was Chosen by Barron s Magazine as one of America s Top 100 Advisers in 2006, 2007, 2008, 2009 and Ranked #1 in Arizona for 2009 by Barron s Magazine Top 1000 Financial Advisers. selection criteria related to ethical standards, professionalism and success. Source: Barron's Top 100 Financial Advisors, February, 2009, as identified by Barron's magazine, using quantitative and qualitative criteria and selected from a pool of over 800 nominations. Advisors in the Top 100 Financial Advisors have a minimum of seven years of financial services experience and $600 million in assets under management. Qualitative factors include, but are not limited to, compliance record, interviews with senior management, and philanthropic work. Investment performance is not a criterion. The rating may not be representative of any one client's experience and is not indicative of the Financial Advisor's future performance. Neither Morgan Stanley Smith Barney nor its Financial Advisors pay a fee to Barron's in exchange for the rating. Barron's is a registered trademark of Dow Jones & Company, L.P. All rights reserved. Source: Barron's Top 1000 Financial Advisors, March, 2009, as identified by Barron's magazine, using quantitative and qualitative criteria and selected from a pool of over 3,000 nominations. Advisors in the Top 1000 Financial Advisors have a minimum of seven years of financial services experience. Qualitative factors include, but are not limited to, compliance record, interviews with senior management, and philanthropic work. Investment performance is not a criterion. The rating may not be representative of any one client's experience and is not indicative of the Financial Advisor's future performance. Neither Morgan Stanley Smith Barney nor its Financial Advisors pay a fee to Barron's in exchange for the rating. Barron's is a registered trademark of Dow Jones & Company, L.P. All rights reserved. SPECTRUM GROUP AT GRAYSTONE CONSULTING 8

8 Spectrum Group at Graystone Consulting is dedicated to making your retirement plan a success and, at the same time, helping you meet your fiduciary responsibilities. To deliver the retirement plan you and your employees deserve, contact Spectrum Group today. Upon request, Spectrum Group can offer any of the following services to your plan EVALUATION Needs Assessment INVESTMENT MANAGEMENT Investment Policy Statement Investment Services PLAN PARTICIPATION Enrollment Meetings & Participant Education Strategic Enhancements Investment Seminars & Re- Enrollment Meetings PLAN MANAGEMENT Investment Monitoring Fiduciary Audit File Issue Resolution Tax laws are complex and subject to change. Morgan Stanley Smith Barney LLC, its affiliates and Morgan Stanley Smith Barney's Financial Advisors do not provide tax or legal advice and are not fiduciaries (under ERISA, the Internal Revenue Code or otherwise) with respect to the services or activities described herein except as otherwise agreed to in writing by Morgan Stanley Smith Barney. This material was not intended or written to be used for the purpose of avoiding tax penalties that may be imposed on the taxpayer. Individuals are urged to consult their tax or legal advisors before establishing a retirement plan and to understand the tax, ERISA and related consequences of any investments made under such plan North Scottsdale Road, Suite 250 Scottsdale, AZ Spectrum Group at Graystone Consulting a business of Morgan Stanley Smith Barney LLC TELEPHONE: TOLL FREE: FACSIMILE: brian.l.hein@morganstanleygraystone.com Morgan Stanley Smith Barney LLC. Member SIPC. Graystone Consulting is a business of Morgan Stanley Smith Barney LLC. SPECTRUM GROUP AT GRAYSTONE CONSULTING /09