PERSON? WAITTHATS ME STRATEGIES FOR MAINTAINING A SUCCESSFUL - - PowerPoint PPT Presentation

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PERSON? WAITTHATS ME STRATEGIES FOR MAINTAINING A SUCCESSFUL - - PowerPoint PPT Presentation

Dec 21, 2023 315 likes •551 views

WHOS MY 401K OPERATIONS PERSON? WAITTHATS ME STRATEGIES FOR MAINTAINING A SUCCESSFUL RETIREMENT PLAN MT SHRM Williamson County 6/9/2016 Chris Boyd Julie Freeman Financial Advisor, Chartered Retirement Plans Specialist SM Chief

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SLIDE 1

WHO’S MY 401K OPERATIONS PERSON? WAIT…THAT’S ME

STRATEGIES FOR MAINTAINING A SUCCESSFUL RETIREMENT PLAN

MT SHRM – Williamson County 6/9/2016

Julie Freeman

Chief Human Resources Officer Martin Ventures 40 Burton Hills Boulevard, Suite 100 Nashville, TN 37215 615-829-7314 Jfreeman@martinventures.com

Raymond James & Associates, Inc., member New York Stock Exchange/SIPC

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Chris Boyd

Financial Advisor, Chartered Retirement Plans SpecialistSM The Fowler Group of Raymond James 1033 Demonbreun Street, Suite 500 Nashville, TN 37203 615-645-6717 Chris.Boyd@Raymondjames.com

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SLIDE 2

Evolution of the 401(k) & Plan Structures Today Common Myths Around 401(k) Plans Operational / Compliance Considerations Vendor Transitions Successful Plan for Your Employees

AGENDA

Raymond James & Associates, Inc., member New York Stock Exchange/SIPC 2

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SLIDE 3

WHAT SOME EMPLOYEES ARE THINKING…

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SLIDE 4

401(K) HISTORY & BASICS

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SLIDE 5

THE 401(K) WAS CREATED IN 1978 AND CONTINUES TO EVOLVE

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1978 1986 2001 2016

IRS Code 401(k) Deferred Comp Non- Discrimination Testing EGTRRA Catch-Up & Roth Permanent PPA (2006) Auto Enroll QDIA

Raymond James & Associates, Inc., member New York Stock Exchange/SIPC

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SLIDE 6
  • Pre-Tax / Roth
  • Employee / Employer

Funding

  • Bundled / Unbundled
  • Annual Compliance / Reporting

Administration

  • Portable Accounts
  • Mutual Funds / Insurance

Investments

PLAN BASICS & CONSIDERATIONS

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SLIDE 7

401K PLANS TODAY

Group Annuities Open Architecture Hybrid Registered Products Named Mutual Funds Administrative Price Structure Insurance Companies Fixed Accounts Proprietary or Sub-Advised Insurance or Registered Fixed or Stable Value Funds Proprietary or Pure Mutual Funds

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SLIDE 8

FOUR COMMON MYTHS AROUND 401(K) PLANS

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Myth1: Provider is Trustee / Fiduciary Myth 2: Plan Design is Plan Design Myth 3: Employees Understand Plan Myth 4: Investments Are the Same So Many More Considerations Now More Confusion Now Than Ever Plan Design Changes Have Impact Employer, Plan Committee, Advisor

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SLIDE 9

COMPLIANCE & OPERATIONS

Raymond James & Associates, Inc., member New York Stock Exchange/SIPC

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SLIDE 10

WHO’S INVOLVED AND WHAT IS THEIR ROLE / STATUS?

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Sponsor

Committees Plan Trustees

Third Party Administrator

Investment Managers

Plan & Payroll Provider

Investment Advisor

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SLIDE 11

 Recent DOL audit survey

39% Major Deficiencies* CPA Firms 2015 Statistics

 Watch Out Areas

Contributions Distributions Party-in-Interest / Prohibited Transactions

 Best Practices

AUDITS ON THE RISE !

Raymond James & Associates, Inc., member New York Stock Exchange/SIPC 11

*Source: Department of Labor (www.dol.gov)

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SLIDE 12

 Top 5 Tips

Making required plan document updates Correct definition of “compensation” and “eligible employee” Monitoring 402(g) contributions limits Remitting contributions on a timely basis Administering “hardship” and loan distributions

STAYING IN COMPLIANCE

Raymond James & Associates, Inc., member New York Stock Exchange/SIPC 12

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SLIDE 13

File remission Timing issues (payroll and employee notices) Revenue/payment structure Fund surprises/ Fixed Account Termination fees

VENDOR TRANSITIONS

Raymond James & Associates, Inc., member New York Stock Exchange/SIPC 13

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SLIDE 14

SUCCESSFUL RETIREMENT PLAN FOR YOUR EMPLOYEES

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Raymond James & Associates, Inc., member New York Stock Exchange/SIPC

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SLIDE 15

EMPLOYEES NEED SIMPLICITY & THEY VALUE GUIDANCE

  • Trims options at the margins
  • Median plan still offers 22

investment options

Average plan

  • Thinks about the delivery of
  • ptions to meet participant

investor types

Excellent plan

Target Date funds Balanced funds Self-Directed Fund or Brokerage Window

“Do it for me” > “Do it with me” > “Do it myself” >

Fund Menu for illustrative purposes only. Raymond James & Associates, Inc., member New York Stock Exchange/SIPC

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BE A GUIDE TO EMPLOYEES

Plan asset allocation

Stable Value Company Stock Bonds US Equity Non US Equity REITs Target Date

  • A small percentage of

the plan invests in target date funds

Average plan

  • Strives to find ways to

increase the percentage

  • f participants in the

asset allocation strategy

Excellent plan

  • Asset allocation default solutions
  • Targeted participant

communications

  • Full plan re-enrollment

Asset Allocation does not guarantee a profit nor protect against a loss. Raymond James & Associates, Inc., member New York Stock Exchange/SIPC

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SLIDE 17

MOVE OUTSIDE THE PROVIDER’S “BOX”

  • Offers proprietary, single

manager investment solutions

Average plan

  • Embraces open architecture,

best of breed investment solutions

Excellent plan

Raymond James & Associates, Inc., member New York Stock Exchange/SIPC

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  • 2008 Beijing Olympics (www.olympic.org)
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SLIDE 18

GET EVERYBODY INVOLVED

  • Participation is stagnant

under 80%

Average plan

  • Strives for 90%+

participation and utilizes auto features

Excellent plan

76% 76% 77% 78% 78% 77%

2009 2010 2011 2012 2013 2014

82%

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Source: Vanguard How America Saves Report 2015 Raymond James & Associates, Inc., member New York Stock Exchange/SIPC

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SLIDE 19

GIVE EMPLOYEES THE BEST CHANCE OF SUCCESS

  • Settles around 7% for

employee savings rates

Average plan

  • Utilizes automatic

features to drive savings rates above 10%

Excellent plan

7.30% 7.00% 6.80% 6.90% 6.90% 7.00%

2007 2008 2009 2010 2011 2012

  • Automatic escalation
  • Target Replacement Income (TRI)

drives design

  • Use of company match and

defaults

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Source: Aon Hewitt Universe Benchmarks Research Report 2013 Raymond James & Associates, Inc., member New York Stock Exchange/SIPC

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SLIDE 20

STEPS TO HELP MOVE YOUR PLAN FROM GOOD TO GREAT

  • Pre-tax/Roth, Bundled/Unbundled, Insurance

Plan Features

  • Who serves what role to the plan

Roles & Responsibilities

  • Revisit your process often and revise when

needed

Compliance/Operations

  • Identify participant profiles and tier

Thoughtfully Design the Menu

  • Don’t settle for proprietary funds

Best of Breed Investments

  • Auto enroll, re-enrollment, auto increase

Participation/ Contribution Rates

Raymond James & Associates, Inc., member New York Stock Exchange/SIPC

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SLIDE 21

NOT ANYMORE…

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SLIDE 22

THANK YOU

Raymond James & Associates, Inc., member New York Stock Exchange/SIPC

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