1. A n o f f i c i a l p u b l i c a t i o n o f A S P P A
WINTER 2015
Why Plan Sponsors Need an Education Policy Statement
Leading the Way
Annual Conference Wrapup
Impact of the 2014 Elections

2. 1www.asppa-net.org
Leading The Way
Why plan sponsors need an education policy statement.
BY STIG NYBO
COVER STORY
32
WINTER 2015
Cover Illustration: Robert Meganck
Contents
26 Riding the Wave?
With a wary eye on the 2016 elections,
Republicans in Congress may be ready to
act on a range of issues affecting the retire-
ment industry.
NEVIN E.ADAMS, JD
feature stories
6 From the President
KYLA M. KECK
13 New and Recently
Credentialed Members
19 Ferenczy Joins Board of
Directors
25 2015 Calendar of Events
38 Raising the Bar at the
2014 Annual Conference
JOHN ORTMAN, JOHN IEKEL,AND
MIKE BUSHNELL
55 Government Affairs Update
CRAIG P. HOFFMAN
asppa in action
44 Fiduciary Responsibilities for
Church Plans
The third in a series of articles adds new
questions and answers on the complex required
minimum distribution rules.
Dannae L. Delano,Thomas E. Clark, Jr.,and
Jamie N. Mahler

3. 2 Plan Consultant | WINTER 2015
columns
Technical
48 The Importance of a
Well-Crafted IPS
INVESTMENT ADVISORY
jASON C. ROBERTS
50 ERISA 3(16) Iterations
and Implications
MARKETING
RUSSELL J. HOOKER
52 Work Smarter with
Cheap Tech
TECHNOLOGY
Yannis Koumantaros and Adam Pozek
54 Auto Enrollment: Breaking
Down Barriers to Participation
SUCCESS STORIES
JOHN IEKEL
56 Just a Little Change Can
Change It All
Business Practices
april anderson, beth elfering and
denielle williams
04 Letter from the Editor
08 We Need to Have a National
Conversation on Retirement
Regulatory/Legislative
Brian H. Graff
10 Who Is the Employer? It Makes
a Big Difference!
compliance
JIM HOUPT
14 The Art of Collaboration in
Plan Compliance
WORKING WITH
PLAN SPONSORS
monique elliott
16 What's Next in
Online Enrollment?
RECORD KEEPING
JOHN IEKEL
20 IRS' Hybrid Plan Rules Have
Implications for Variable
Annuity Pension Plans
DEFINED BENEFIT PLANS
Grant Camp and Ladd Preppernau
22 The U.S. Supreme Court Over-
rules the Moench Presumption
LEGAL
JOHN MICHAEL MAIER
524814
TECH Published by
Editor in Chief
Brian H. Graff, Esq., APM
Plan Consultant Committee
Mary L. Patch, QKA, QPFC Co-chair
David J. Witz Co-chair
Gary D. Blachman
Kimberly A. Corona, MSPA
John Feldt, CPC, QPA
John Frisvold, QPA, QKA
Catherine J. Gianotto, QPA, QKA
Phillip J. Long, APM
Kelsey H. Mayo
Michelle C. Miller, QKA
Mark S. Nichols, CPC, QPA, QKA
Norman F. Pierce, QPFC
Seth R. Priestle, QKA, QPFC
David F. Rosengarten
Pietro Sabatino
Robert J. Seidell, III, QKA, QPFC
Eric W. Smith
Editor
John Ortman
Associate Editor
Troy L. Cornett
Senior Writer
John Iekel
Art Director
Tony Julien
Technical Review Board
Rose Bethel-Chacko, CPC, QPA, QKA
Michael Cohen-Greenberg
Sheri Fitts
Drew Forgrave, MSPA
Grant Halvorsen, CPC, QPA, QKA
Jennifer Lancello, CPC, QPA, QKA
Robert Richter, APM
Advertising Sales
Fred Ullman
ASPPA Officers
President
Kyla M. Keck, CPC, QPA, QKA
President-Elect
Joseph A. Nichols, MSPA
Vice President
Richard A. Hochman, APM
Immediate Past President
David M. Lipkin, MSPA
Plan Consultant is published quarterly by the American
Society of Pension Professionals Actuaries, 4245 North
Fairfax Drive, Suite 750, Arlington, VA 22203. For subscription
information, advertising, and customer service contact ASPPA
at the address above or 800.308.6714, customerservice@
asppa.org. Copyright 2015. All rights reserved. This
magazine may not be reproduced in whole or in part
without written permission of the publisher. Opinions
expressed in signed articles are those of the authors and do
not necessarily reflect the official policy of ASPPA.
Postmaster: Please send change-of-address notices for Plan
Consultant to ASPPA, 4245 North Fairfax Drive, Suite 750,
Arlington, VA 22203.

4. 56 Plan Consultant | WINTER 201556
BUSINESS PRACTICES
Just a Little Change Can
Change It All
Taking participant
education to another
level via a comprehensive
website.
BY April Anderson, Beth Elfering
and Denielle Williams
T
here can be little doubt we are on the cusp of a retirement
crisis. With a frightening lack of retirement savings (the average
working household has a mere $3,000 saved for retirement), the
leisurely retirement lifestyle will be a hallmark of the past — an
impossible illusion. Future retirees will spend more time in poverty than
Palm Springs and Paris.
A whopping 90% of households fall short of conservative savings targets
for their age and income. While recent retirees and near-retirees have had
traditional pensions to supplement Social Security, the current workforce
does not and will not. Without intervention, the vast majority of American
retirees will be at or below poverty level once they depend on their
retirement savings for income. They do not understand how much savings
they will actually need or how they will ever save enough. To further
compound the problem, a great many of them will also bring significant
mortgage and consumer debt to retirement.
Despite this alarming lack of preparedness, most workers treat
retirement savings like an emergency fund. Studies show that 40% of
Editor’s Note: This article was the
winning entry in ASPPA’s 2014
Ed Burrows Award call for papers.

5. 57www.asppa-net.org 57
employer and adopting processes
best suited to their needs. Increasing
competition and regulation make it
even more difficult to keep fees low
and remain profitable. As a result,
there is a continuous pressure to
preserve only essential client services.
Participant education, widely
undervalued by the plan sponsor,
typically falls outside the realm of
essential services, with the exception
of federally mandated notices and the
occasional annual employee meeting.
Even when a TPA firm recognizes the
critical need for participant education
and has the resources to provide it,
fiduciary issues muddle their efforts
and force them to provide only the
most rudimentary information.
Financial professionals also feel
this strain, focusing marketing efforts
on participants with large account
balances and high earning potential,
further curtailing retirement
education for the average worker. The
mediocre majority are simply cast
aside.
The Department of Labor and
other government agencies have
failed to assign any responsibility for
this critical duty, aside from a few
requisite notices (which are little
read and rarely understood). No one
has been tasked with providing the
comprehensive education that all
participants need.
We are only now beginning
to see the effects of such a lack of
accountability.
Sponsoring employers adopt
retirement plans for a variety of
reasons. The tax advantages and
the ability to attract and retain key
talent are among the chief reasons
cited for adopting a plan. That being
said, very few employers have the
internal resources to provide adequate
and comprehensive retirement plan
education.
Furthermore, many also assume
that the alphabet soup of required
plan materials (SPDs, QDIAs, SARs,
etc.) provide sufficient information
to properly educate participants
about retirement plans and the
importance of retirement savings.
Plan participants who are no longer
employed are particularly susceptible
to a lack of education, especially
regarding distribution options outside
of lump sum withdrawals.
Participants themselves must
also bear their share of responsibility
for the situation. Society has taught
consumerism, and we have embraced
it. We stand in line for the newest
smartphone, sometimes paying
exorbitant amounts for technology
and entertainment, yet the savings
rate of the average American is 4%.
Sound financial habits are increasingly
rare. There is a clear lack of both
education and financial preparation,
both of which must significantly
precede the withdrawal decision.
Common Approaches
Most of us recognize the problems
that surround this issue and are
working to find solutions. We look
to change public policy. We lobby to
strengthen Social Security, increase
contributions employees make to
retirement plans are cashed out to pay
for basic living expenses, and 75%
of employees who do cash out their
retirement plan accounts do so to
pay for living expenses. Clearly, an
educational overhaul is needed.
Barriers that Prevent
Education
It is difficult to look at the
enormity of the problem and not ask
how we got here or who’s to blame.
These answers are complex, lengthy,
and beyond the scope of this paper.
However, within this context, we
can look at the issues that currently
surround TPA firms and other
financial professionals, sponsoring
employers, and participants. Each
shares some fault as to the current
situation.
Several factors have hindered
the ability of TPA firms to provide
participant education. Some of these
barriers are intrinsic to the nature
of the TPA firm, such as client-
centeredness and financial resources,
while others are the result of external
forces, namely issues surrounding
fiduciary liability and accountability.
TPA firms have almost universally
maintained a client-centered focus,
for good reason. The plan sponsor
hires and fires the TPA firm, pays
for the services provided, and holds
decision-making power for the plan.
It only makes sense, then, that TPA
firms would honor and strengthen
this relationship by suggesting plan
provision changes that benefit the
Participant education, widely
undervalued by the plan sponsor,
typically falls outside the realm of
essential services.”

6. 58 Plan Consultant | WINTER 201558
a movement that changes the patterns
of social behavior, we must begin by
building a supportive infrastructure.
Because of the pervasiveness of
the internet (81% of Americans have
internet access), a website is the most
logical place to begin. The initial site
will include informational articles
and videos, savings and retirement
calculators, and budgetary tools. In
addition to informing users of how
much they need to save for retirement
and when they should retire, it will
more importantly provide them with
multiple methods to get there.
While websites of this nature
currently exist, especially among large
investment companies, their influence
has been limited due to the nature of
their audience and the timing of the
message.
Participants are not receiving
enough of the right kind of education.
By communicating the importance of
retirement savings throughout their
working years, we begin to close
the gap on quantity of education.
However, we must also address the
quality of the education itself — in
both content and form.
To resolve this issue, this website
will take education to another level.
In order to impact thoughts and
behaviors, we must educate employees
in a way that appeals to them. We
need a radical shift to occur in the
way we approach employees. We
must learn to view plan participants as
complex, emotional beings that have
difficulty focusing on the future when
access to retirement plans and prod
low-income workers to save more
with measures like the Saver’s Credit.
Unfortunately, these solutions have
been largely ineffective at increasing
retirement readiness because they
attempt to plug the leak but do not
address the root problem: Working
Americans are simply not saving.
There are several reasons for such
a failure to act. Some do not see the
value in saving. Others conclude that
it’s simply too late, too difficult, too
confusing or just plain impossible.
And they act, or choose not to act,
accordingly. They buy, and when they
run out of money, they borrow, and
buy more.
The Solution
In order to truly transform the
retirement readiness landscape, we
must change the deeply rooted habits
and thought patterns of ordinary
citizens addicted to consumerism.
We must develop a solution that
effectively targets the demographic
and changes both attitudes and
behavior regarding saving. We
can apply principles of behavioral
psychology, servant leadership,
and target marketing to create a
comprehensive educational campaign.
As experts in the retirement
industry, we are perfectly positioned
to change public perception on
a national scale. Working adults
between the ages of 25 and 65 need
a bevy of information we have at
our disposal. We can calculate with
relative certainty how much each
person will need at retirement,
based on a variety of factors, how to
spend down retirement funds, when
to borrow against plan assets, and
we have connections to financial
professionals who can assist employees
in making wise investment choices.
The importance of saving for
retirement must be understood and
valued long before a distributable
event. Therefore, an effective
communication plan must include
frequent, repeated messaging over
months and years. In order to create
the present seems so consuming.
Education must be holistic and
compelling. It must address behavioral
cues and rewards. It must send a
powerful message that will drive
behavior change.
A methodical approach in which
we interrupt individual habit loops
and reinforce positive financial
behaviors will be most successful.
For example, as awareness builds,
we can target specific behaviors by
interrupting the cue-and-reward
system. The site will decipher
appropriate savings behavior (an
automatic ACH into an IRA, for
example) and reward the individual
for the behavior. The site will
continue to reward those participants
who progress. All content will be
designed to appeal to the average
worker both in style and delivery.
In addition, it will borrow strategies
from other thriving industries. Email
and SMS messaging campaigns will
continually reinforce the message and
provide guidance. Gamification will
also be employed to increase users’
overall financial health.
To further increase the reach
of this educational program, TPA
firms will have the opportunity to
partner with the educational site. The
website brings a value proposition
to the retirement landscape that has
not existed before. In the past, each
firm had to either create its own
educational materials or outsource
to a variety of vendors. With this
approach, educational materials,
videos and a multitude of other
tools will be available to all plan
participants in a cohesive package.
Additionally, each TPA firm can
choose to refer its participants to the
website or choose to subscribe to a
branded version of the site.
As mentioned above, a lack of
resources among TPA firms continues
to be a barrier to providing this
type of education. We intend to
resolve this issue in several ways. By
implementing a robust website, a
steady stream of advertising revenue
can sustain much of the campaign’s
We must begin
now to ignite a
passion for fiscal
responsibility
and retirement
savings.”

7. 59www.asppa-net.org
consults on a wide range of retirement
plan issues with clients across the
country.
Denielle Williams, EA, ASA,
is a consulting manager at
Randall Hurley and a
member of ASPPA and
ACOPA. She is an advocate for
participant education and conducts
education on both fundamental and
advanced consulting topics.
marketing campaigns demonstrates
that widespread, significant behavior
changes can begin very rapidly and
continue their effectiveness for many
years. We must begin now.
April Anderson is the
communications manager at
Randall Hurley, a TPA
record keeping and
consulting firm in Spokane, Wash.,
where she directs the development of
custom client communication strategies
and education programs.
Beth Elfering, APA, is the
transaction manager at
Randall Hurley. She
specializes in daily administration and
maintenance costs. In addition,
a subscription-based service that
integrates corporate branding,
strategic messaging and database
integration will allow TPA firms,
financial professionals and other
related entities to provide high-
quality participant education at a
fraction of the cost while providing
an additional source of revenue for
the site.
While future legislation will
continue to impact retirement
readiness, never before has the future
of the middle class been so fully left
to its own consequences. We must
begin now to ignite a passion for fiscal
responsibility and retirement savings.
Results will not be immediate.
However, an analysis of successful
» The Importance of a Well Crafted IPS
(continued from page 49)
(i.e., target date or risk-based funds,
managed accounts, etc.) or decisions
for selecting among options within a
particular QDIA type.
If the plan is amenable to
amending the IPS to include
instruction and policies relating to
share class, investment philosophies
and QDIAs, the following questions
can serve as a guide for advisors/
consultants:
Does the plan seek to limit the
universe of available investments to those
that generate a specified or minimum
amount of revenue sharing (e.g., to pay
some or all of the administrative expenses
of the plan)?
If so, what are those limits and
does the provider offer enough
choices to employ a fiduciary process
to select investments in accordance
with the terms of the IPS? If not,
what is the process to account for
excess revenue sharing and/or
monitoring reimbursements?
Do the plan fiduciaries have a
preference from active or passive investment
management?
If so, what options are available
for selecting among the plan’s
designated investment alternatives?
What allocation strategies does
the plan seek to use when it comes
to model portfolios or managed
accounts?
How does the plan’s investment
policies affect the selection, monitoring and
replacement of QDIAs?
Do participant demographics
and behaviors weigh in favor of one
QDIA type over another? Within the
preferred QDIA type, what options
are available through the plan and
how do those options compare to the
foregoing considerations relating to
share class and investment philosophy?
The questions above are just a
few examples of how the regulatory
and litigation risks facing plan
fiduciaries and service providers may
be substantially mitigated by adopting
a more comprehensive and targeted
IPS. By departing from the template
IPS and helping your clients evaluate
their preferences and understand
how available products and service
providers either meet or conflict
with the plan’s objectives, you can
differentiate your services in a way
that leads to lower risk and better
outcomes for your plan sponsors and
participants.
We recommend having an
ERISA attorney who is familiar with
investments review the IPS before it is
adopted by the plan. Both the IPS and
any board resolutions incorporating
the same should make clear that the
policies are meant to serve as a guide
and that the plan document will
ultimately control in the event there is
a conflict.
Jason C. Roberts, Esq., is the
chief executive of the Pension
Resource Institute, LLC, a
consulting firm that delivers
strategic and compliance-related
consulting services to plan advisors and
consultants. He is also a partner at
Retirement Law Group, PC where he
provides legal solutions to clients on
ERISA- and securities-related matters.