This document provides an overview and agenda for a presentation on changes to 401(k) plans. The presentation covers fiduciary responsibilities and best practices, investment management strategies, optimizing plan design, financial wellness programs for employees, and understanding fees, services, and plan structures. It discusses topics like the types of fiduciary advisors, the DOL fiduciary rule, proprietary vs non-proprietary funds, active vs passive management, benchmarking plan features against peers, and analyzing plan fees. The goal is to help 401(k) sponsors navigate their fiduciary duties, manage investments prudently, design competitive plans, engage employees, and understand fees.

1. What’s Changed with 401(k)s?
More Than You Think
Jacob C. Adamczyk
Overview of Current
Defined Contribution Marketplace

2. TODAY’S AGENDA
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• Fiduciary Blind Spots & Best Practices
• Investment Management
• Optimizing Plan Design
• Financial Wellness & Employee Engagement
• Understanding Fees, Services & Structure

3. 3
FIDUCIARY BLIND SPOTS & BEST PRACTICES
Blind Spots
• Committee composition & responsibilities
• Process over outcomes
• Meeting minutes
• 3(21) Advisor / 3(38) Manager
• Investment Policy Statement (IPS)
• Vendor RFI / RFP
• Participant education vs. advice
• Fiduciary liability insurance
• Fidelity bond coverage
Best Practices
• Understanding your fiduciary duties
• Documentation
• Fee analysis / benchmarking
• Vendor management
• Proprietary investments
• Recent litigation
• Fidelity, Franklin Templeton, GE,
Nordstrom, Northrop Grumman, Putnam,
Voya, Xerox

4. 4
FIDUCIARY BLIND SPOTSFIDUCIARY BLIND SPOTS & BEST PRACTICES
Broker
3(21) Fiduciary
Co-Fiduciary
3(38) Fiduciary
Full-Scope Fiduciary

5. 5
FIDUCIARY BLIND SPOTS & BEST PRACTICES
3(21)
Co-Fiduciary
• Moderate level of protection
• Investment Advisor
• Retain control of investment
lineup
• Retain liability for investment
decisions
3(38)
Full-Scope Fiduciary
• Highest level of protection
• Investment Manager
• No liability for investment
decisions
• Lack of control
• Higher fees
Type of Advisor Pros Cons

6. 6
FIDUCIARY BLIND SPOTS & BEST PRACTICES
• DOL Fiduciary Rule
– First introduced in 2009 by DOL; approved April 6, 2016
– Final rule addresses conflicts of interest for advisors re: 401(k) Plans and IRAs
• Compliance Deadlines
– June 9, 2017: Educational requirements and investment advice provisions
– January 1, 2018: Major participant disclosures, new contracts and agreements
• What It Means for Advisors
– Must follow fiduciary standard of care; suitability standard no longer applies
– Only offer advice that reflects “best interests” of plan participants/beneficiaries
• What It Means for Sponsors
– Understand type of advisor you are working with; engage fiduciary advisor
– Focus on fees: how and where they are being paid

7. INVESTMENT MANAGEMENT
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Proprietary
vs.
Non-
Proprietary
Expense Ratios
&
Share Classes
Asset Class
Diversification
QDIA
Active
vs.
Passive
Absolute &
Relative
Performance
Platform
Flexibility
Plan
Demographics
Fund Menu
Considerations

8. INVESTMENT MANAGEMENT
Share Class Availability
– Must evaluate “net net” expense ratio of each investment
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9. INVESTMENT MANAGEMENT
QDIA Designation (Qualified Default Investment Alternative)
– Safe harbor protection afforded to plan sponsors, if conditions met
– Three approved types of QDIAs (TDFs, Managed Accounts, Lifestyle Funds)
– Documentation of QDIA decision and rationale is critical
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10. OPTIMIZING PLAN DESIGN
• Automatic Enrollment
• Automatic Escalation
• Default Fund(s)
• Ease of Accessing Money
• Loans & Financial Hardships
• Available Sources
• Distribution Ages
• Eligibility & Entry Periods
• Match vs. Profit Share
• Trustee
• Vesting Schedules
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11. OPTIMIZING PLAN DESIGN
Peer Group
Benchmarking
• Categories
• Plan size (5)
• Industry (50)
• Geography (5)
• Employee count (10)
• Plan type (11)
• Plan Features
• Advisor type
• Advisor services
• Auto enroll/escalation
• Eligibility/Entry
• Employer contribution
• Fee/Expense payment
• Investments
• Plan administration
• Plan structure
• Providers/Vendors
• Vesting
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12. OPTIMIZING PLAN DESIGN
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Health Care Organizations (For Profit)
Overall Micro
(<$5M)
Small
($5-$50M)
Mid
($50-$200M)
Large
($200-$1B)
Mega
(>$1B)
Immediate 19.5% 11.7% 16.7% 29.6% 66.7% 83.3%
3 Months 20.7% 13.6% 26% 33.3% 11.1% 16.7%
4-6 Months 10.8% 12.6% 8.3% 14.8% 11.1% 0%
7-11 Months 0.4% 0% 1% 0% 0% 0%
1 Year 45.2% 58.3% 43.8% 22.2% 11.1% 0%
> 1 Year 3.3% 3.9% 4.2% 0% 0% 0%
Eligibility

13. OPTIMIZING PLAN DESIGN
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Roth Contributions
Law Firms
Overall Micro
(<$5M)
Small
($5-$50M)
Mid
($50-$200M)
Large
($200-$1B)
Mega
(>$1B)
Yes 74.3% 56.7% 64.4% 90.3% 92.5% 100%
No 26.6% 43.3% 35.6% 9.7% 4.8% 0%

14. OPTIMIZING PLAN DESIGN
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Safe Harbor
Building / Construction / Contracting
Overall Micro
(<$5M)
Small
($5-$50M)
Mid
($50-$200M)
Large
($200-$1B)
Mega
(>$1B)
Yes 50.8% 62.8% 39.1% 31.6% 66.7% 66.7%
No 49.2% 37.2% 60.9% 68.4% 33.3% 33.3%

15. FINANCIAL WELLNESS & EMPLOYEE ENGAGEMENT
1 in 4
who feel
“financially in
control” still worry
about finances5
50%
not confident
they have $1,000
in emergency
savings4
1/3
earning $100K+
have credit card
debt; 22% struggle
with payments3
7 of 10
say “financial”
most common form
of stress1
21%
with outstanding
loans from workplace
savings plan2
S T R E S SD I S T R E S S
C O N T R O L
1“Are Teens Adopting Adults’ Stress Habits?”, American Psychological Association, 2014.
2 PWC Employees Financial Wellness Survey, April 2015.
3 Jack Van Derhei, Sarah Holden, Luis Alonso, Steven Bass, and Ann Marie Pino,”401(k) Plan Asset Allocation, Account Balances, and Loan/Activity in 2013.”, EBRI Issue Brief, no. 408, December 2014.
4 State Street Global Advisors, Biannual DC Investor Survey, March 2015.
5 Fidelity, Financial Wellness Study, July 2015.
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16. FINANCIAL WELLNESS & EMPLOYEE ENGAGEMENT
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• Stretch Match
• Benefits Harmonization
• Rewards Programs
• Wellness Dollars
• Individual Financial Advice

17. Broker
3(38) Fiduciary
Full Scope Fiduciary
 Various Paycheck Deductions
 Setting up a Budget
 Expense Categorization
 Cash Management
 Emergency Savings
 Retirement
 Saving for Large Purchases Investments
 Savings Optimization
 Income Plan
 Pension
 Social Security
 Medicare
 Will/Estate Plan
 Life and Disability Insurance
 Long-Term Care Insurance
 Safeguarding Documents
 In-Network vs. Out-of-Network
 Name Brand vs. Generic Rx
 Health Care Savings Accounts
 Preventative Care Opportunities
 Student Loans
 Credit Cards
 Mortgage
 Car Loans
 Workplace Loans
 Credit Score
 Debt Prioritization
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FINANCIAL WELLNESS & EMPLOYEE ENGAGEMENT

18. UNDERSTANDING FEES, SERVICES & STRUCTURE
Fee Analysis
• Plan Structure
• Bundled vs. Unbundled
• Advisor vs. Direct
• Fee Structure
• Total Cost
• Fee Levelization
• Pro Rata vs. Per Capita
• Company Pay vs. Plan Pay
• Revenue Sharing
• Fee Credits
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19. UNDERSTANDING FEES, SERVICES & STRUCTURE
Plan Services
• Advisor
• Fiduciary Governance
• Participant Education
• Plan Administration
• Vendor Management
• Investment Management
• Recordkeeper
• Annual Notice deliveries
• Beneficiary recordkeeping
• Directed Trustee
• Eligibility tracking
• Loan/FHW/QDRO administration
• Mandatory distributions
• Participant technologies
• Payroll integration
• Plan sponsor technologies
• Reporting capabilities
• Rollover support
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20. KEY TAKEAWAYS
• Fiduciary Governance
– Investment Policy Statement
– Prudent process, documentation and training
• Investment Management
– 3(21) or 3(38) Fiduciary
– Share class analysis, 404(c) compliance, QDIA
• Plan Design
– Industry benchmarking to ensure marketplace competitiveness
– Risk management & liability protection
• Vendor Management
– Fee & service benchmarking
– Ongoing vendor due diligence
• Employee Engagement
– Get creative!
– Maximize company dollars
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21. www.aurumwealth.com @AurumWealthAkron | Cleveland | Tampa
CONTACT INFORMATION
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T H A N K YO U F O R YO U R AT T E N D A N C E
Jacob C. Adamczyk, AIF®
Director, Retirement Plan Services
440-605-7279
jadamczyk@aurumwealth.com