This presentation discusses the rapidly changing (and litigious) landscape of corporate retirement plans and the best practices top companies are implementing to maintain a quality benefit offering, reduce risk exposures, and retain top talent.

1. What’s New with Corporate Retirement Plans?
More Than You Think
Trends & Best Practices in
U.S. Corporate Retirement Marketplace
Jacob C. Adamczyk | June 6, 2018

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

3. 3
DISCUSSION ROADMAP
FIDUCIARY
GOVERNANCE
VENDOR
MANAGEMENT
INVESTMENT
MANAGEMENT
PLAN
ADMINISTRATION
EMPLOYEE
ENGAGEMENT

4. U N C E R T A I N R E G U L A T O R Y C O N D I T I O N S
RISE OF RETAIL
• Increasing availability of “free” advice
• Heightened expectations for methods and
frequency of the delivery of financial advice
• “Retail” mentality attracting investor monies
CONSOLIDATION AND EXPANSION
• Continued M&A activity among
recordkeepers and asset managers
• Threat of non-traditional vendors entering
financial arena (Amazon, Google)
CHANGING WORKFORCE
• Longer life expectancies redefining
retirement duration and expectations
• Differing appetites for how and when
information is shared
TECHNOLOGY
• Capturing digital participant
• Robo advisors
• Cybersecurity
• Competing for participant’s screentime
COST PRESSURE
• Fee compression hitting all levels of industry
(fund managers, recordkeepers, advisors)
• Increased demand for more services at a
lower cost
RISE OF CONSUMERISM
• Participants more informed than ever due to
headline news & tax reform
• Sponsors increasing awareness of litigation
surrounding plan fees & cost structures
4
KEY INDUSTRY CHALLENGES

5. 5
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
• Fidelity Bond coverage
• Fiduciary liability insurance
Best Practices
• Understanding your fiduciary duties
• Documentation
• Fee analysis / benchmarking
• Vendor management
• Proprietary investments
• Recent litigation
− Fidelity, Putnam, Voya, Templeton
− GE, Nordstrom, Xerox, John Deere
FIDUCIARY GOVERANCE

6. 6
Broker
3(21) Fiduciary
Co-Fiduciary
3(38) Fiduciary
Full-Scope Fiduciary
FIDUCIARY GOVERANCE

7. 7
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
FIDUCIARY GOVERANCE

8. 8
• DOL Fiduciary Rule
– First introduced in 2009 by DOL; approved April 2016; vacated May 2018
– Addresses conflicts of interest for advisors
• What It Means for Advisors
– Wild Wild West
– Two standards of care: Suitability vs. Fiduciary
• What It Means for Sponsors
– Understand your advisor relationship
– Focus on fees: how and where they are being paid
FIDUCIARY GOVERANCE

9. 9
Plan Structure
• Pro Rata vs. Per Capita
• Company Pay vs. Plan Play
• Revenue Sharing
• Fee Levelization
• Fee Credits / Kickbacks
Fee Structure
• Bundled vs. Unbundled
• Advisor vs. Direct
• Platform / Product Type
• Additional Retirement Plans
VENDOR MANAGEMENT

10. 10
Advisor Services
• Directed Trustee
• Payroll Integration
• Loan / FHW/ QDRO Support
• Eligibility Tracking
• Reporting Capabilities
• Beneficiary Recordkeeping
• Annual Notice Delivery
• Participant Technology
Recordkeeper Services
• Fiduciary Governance
• Vendor Management
• Investment Management
• Plan Administration
• Participant Education
VENDOR MANAGEMENT

11. 11
Do It For Me
Help Me
Do It Myself Tier III
Core Investment Options
Tier I
Asset Allocation Options
Tier II
Core Investment Options
with Advisor Guidance
What Kinds of
Investors Are
Your Employees?
INVESTMENT MANAGEMENT
Simplified Menu Design

12. 12
Tier II
Passive Core Options
Tier III
Active Core Options
Diversified Fixed Income
Large Cap Equity
Small/Mid Cap Equity
Capital Preservation
World ex-US Equity
World Allocation
Large Cap Equity
Real Estate
Emerging Market Equity
World ex-US Equity
Do It For Me
Tier I
Asset Allocation Options
Target-Date Funds
5-Year Increments
Help Me / Do It Myself
Diversified Fixed Income
Balanced
INVESTMENT MANAGEMENT
Tiered Investment Structure

13. 13
QDIA – Qualified Default Investment Alternative
– Safe Harbor protection available
– Three approved types: TDFs, Managed Accounts, Lifestyle Funds
INVESTMENT MANAGEMENT

14. 14
Share Class Availability
– Evaluate “net net” expense ratio of each investment
3(21) Fiduciary
Co-Fiduciary
INVESTMENT MANAGEMENT

15. PLAN ADMINISTRATION
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Plan Design
• Auto Enrollment / Auto Escalation
• Safe Harbor
• Eligibility / Entry Periods
• Match vs. Profit Share
• Vesting Requirements
• Accessing Monies
• In-Plan Roth Conversions

16. PLAN ADMINISTRATION
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Healthcare 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

17. PLAN ADMINISTRATION
17
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%
Roth Contributions

18. PLAN ADMINISTRATION
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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%
Safe Harbor

19. EMPLOYEE ENGAGEMENT
S T R E S SD I S T R E S S
C O N T R O L
19
76%
of Millennials want
information and
advice via mobile
phones5
53%
of women plan to
retire after age 65
(or not at all)4
34%
of Baby Boomers
expect Social
Security to be their
primary income
source3
7 of 10
say “financial”
most common form
of stress1
$69,000
median total
household retirement
savings for Gen Xers2
1 1“Are Teens Adopting Adults’ Stress Habits?”, American Psychological Association, 2014.
2 Transamerica Center for Retirement Studies, 17th Annual Transamerica Retirement Survey of American Workers (March 2017).
3 Transamerica Center for Retirement Studies, 17th Annual Transamerica Retirement Survey of American Workers (March 2017).
4 Transamerica Center for Retirement Studies, 17th Annual Transamerica Retirement Survey of American Workers (March 2017).
5 Transamerica Center for Retirement Studies, 17th Annual Transamerica Retirement Survey of American Workers (March 2017).

20. Broker
3(38) Fiduciary
Full Scope Fiduciary
 Paycheck Deductions
 Setting up a Budget
 Expense Categorization
 Cash Management
 Emergency Savings
 Retirement
 Saving for Large Purchases
 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
 HSAs
 Preventative Care Opportunities
 Student Loans
 Credit Cards
 Mortgage
 Car Loans
 Workplace Loans
 Credit Score
 Debt Prioritization
20
EMPLOYEE ENGAGEMENT

21. EMPLOYEE ENGAGEMENT
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• Stretch Match
• Benefits Harmonization
• Rewards Programs & Wellness Dollars
• Gamification
• Individual Financial Advice
Best Practices
who
they are
how
they are
performing
what
they are
doing

22. 22
KEY TAKEAWAYS
• Investment Policy Statement (IPS)
• Prudent process, documentation, and committee training
FIDUCIARY
GOVERNANCE
VENDOR
MANAGEMENT
INVESTMENT
MANAGEMENT
PLAN
ADMINISTRATION
EMPLOYEE
ENGAGEMENT
• 3(21) Advisor / 3(38) Manager
• Share class analysis, QDIA selection
• Plan design aligned with corporate goals/mission
• Internal controls and risk management
• Get creative!
• Maximize company dollars
• Fee & service benchmarking
• Vendor due diligence

23. www.aurumwealth.com @AurumWealthAkron | Cleveland | Tampa
CONTACT INFORMATION
23
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

24. IMPORTANT DISCLOSURE INFORMATION
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Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk. Therefore, it should not
be assumed that future performance of any specific investment or investment strategy (including the investments and/or investment strategies
recommended and/or undertaken by Aurum Wealth Management Group, LLC (“Aurum”), or any non-investment related content, will be
profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove
successful. Aurum is neither a law firm nor accounting firm, and no portion of its services should be construed as legal or accounting advice.
Moreover, you should not assume that any discussion or information contained in this presentation serves as the receipt of, or as a substitute
for, personalized investment advice from Aurum. Please remember that it remains your responsibility to advise Aurum, in writing, if there are
any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous
recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory
services. A copy of our current written disclosure Brochure discussing our advisory services and fees is available upon request. The scope of
the services to be provided depends upon the needs of the client and the terms of the engagement.