401k Program Options Fiduciary Management Program Prepared by Steven Stanganelli, MSF, CRPC, CFP ® Focus Capital Wealth Ma...
What We Offer 401k Sponsors: <ul><li>Qualified Plan Due Diligence Investment Review </li></ul><ul><li>Assistance with Roll...
 
<ul><li>Due Diligence Investment Review & Process –  </li></ul><ul><li>The goal of this process is to provide a better, mo...
Comprehensive Investment Options Participating Fund Families:  More than 100 Fund Families covering thousands of fund choi...
Flexible Platform
Sample Costs Minimum: $700 per participating company (1 – 5 employees)  up to a cap; Asset Management Fee is up to 0.75% (...
Cost Savings to Members Association 401ks can be launched with commitments of $1M in new or converted assets for this to b...
Plan-Level Admin Fee Account Since we are acting as a “Fee-Only” investment advisor, we are not accepting any commissions ...
Sample Services Available to Participants <ul><li>This is a sample list of the types of services available to plan partici...
<ul><li>Sample Survey for 401k Plan Benefit </li></ul><ul><li>Survey Introduction: </li></ul><ul><li>Recognizing that prov...
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401k Program Options for Fiduciary Management

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A program describing the benefits of creating a 401k sponsored by an association for use by the group's members. This program was developed for the Merrimack Valley Venture Forum (MVVF) of the Greater Lowell, MA area.

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401k Program Options for Fiduciary Management

  1. 1. 401k Program Options Fiduciary Management Program Prepared by Steven Stanganelli, MSF, CRPC, CFP ® Focus Capital Wealth Management – a Fee Only Registered Investment Advisor
  2. 2. What We Offer 401k Sponsors: <ul><li>Qualified Plan Due Diligence Investment Review </li></ul><ul><li>Assistance with Roll-out and Employee Enrollment </li></ul><ul><li>Financial Education programs on-site throughout year </li></ul><ul><ul><li>Topics are educational in nature and not product-specific </li></ul></ul><ul><ul><li>Areas covered include credit and mortgages, funding a college education as well as retirement </li></ul></ul><ul><li>A Fee-Only Approach that is less costly to the plan </li></ul>Benefits: <ul><li>A formal process that reduces legal liability of sponsor </li></ul><ul><li>Leads to higher participation and lower testing costs </li></ul><ul><li>Leads to higher participant satisfaction </li></ul><ul><li>Lower overall costs to employer, plan and participants </li></ul>
  3. 4. <ul><li>Due Diligence Investment Review & Process – </li></ul><ul><li>The goal of this process is to provide a better, more orderly process of making investment decisions and reduce overall legal risk. </li></ul><ul><li>Fiduciary Warranty – In the event of a breach or investment selections fail to meet the requirements set by the US DOL Section 404(c) then the firm and it’s resource partners will indemnify the plan. </li></ul><ul><li>Investment Questionnaire – Prepared initially and reviewed annually to develop an investment line-up appropriate to the Plan’s participants. </li></ul><ul><li>Investment Policy Statement- Developed initially and reviewed annually to assist the Plan’s sponsors and fiduciaries in making prudent investment-related decisions and to comply with the standards set by ERISA. </li></ul><ul><li>Investment Analytics – A formal annual process of monitoring the investment line-up. Each choice is evaluated in a weighted-average process that measures qualitative and quantitative criteria to determine changes needed in the line-up. </li></ul>
  4. 5. Comprehensive Investment Options Participating Fund Families: More than 100 Fund Families covering thousands of fund choices all available at no sales charge (no load) A sampling of fund families include: AIM Legg Mason T. Rowe Price Alliance Lord Abbett Vanguard American Century Neuberger Berman Van Kampen American Funds Oppenheimer Victory Columbia PIMCO Wells Fargo Davis Pioneer Dreyfus Principal Other Non-traditional Options: Goldman Sachs Putnam Company Stock, Hartford Seligman Self-Directed Brokerage Accounts Ivy State Street Janus Thornburg Jennison Dryden Touchstone
  5. 6. Flexible Platform
  6. 7. Sample Costs Minimum: $700 per participating company (1 – 5 employees) up to a cap; Asset Management Fee is up to 0.75% (Average = 0.5%) Ascensus Fees will range from $250 to $1250 for start up and $3,000 to $4,000 annually + per participant fee depending on choice of bundle and 401k plan options TransAmerica bundled packages include a $1,500 program set up plus fee for 401k plan options; Annual expenses for testing and record-keeping will range from $1,500 - $2,000 plus per participant fee
  7. 8. Cost Savings to Members Association 401ks can be launched with commitments of $1M in new or converted assets for this to be a feasible option. Association 401k Stand-Alone 401k Savings Fee-Based Asset Management If AUM < $1M, fee = 0.75%; If AUM > $1M, fee = 0.50% 1% 0.25% to 0.50% per year Advisor Consulting Services (paid by participating company) $700 per company (up to 5 employees); Cap of $95/employee per year (up to 60 employees) $1,500 per company (up to 5 employees); Cap of $170/employee per year (up to 60 employees) At least $800/year for small companies TransAmerica Record-Keeping (paid by participating company) $1,500/year + $25/participant $2,500 - $3,500 At least $1,000 Third Party Administration (TPA) (applies only to unbundled arrangements; paid by participating company) $3,000/year to $3,500/year
  8. 9. Plan-Level Admin Fee Account Since we are acting as a “Fee-Only” investment advisor, we are not accepting any commissions or administrative or 12b-1 fees from either the record-keeper or the mutual funds offered. Such fees (if applicable to the funds) are pooled into an account for the plan and can be used to defray or offset the plan administrative fees. This in turn reduces the amount that any employer-sponsor needs to write a check for paying these fees. Distributions used to off-set TPA, Asset Mgmt or Admin or Added as Employer Contribution to Participants Example: For a plan with $1M under management, the 12b-1 and Sub-TA fees could be 0.50% (or $5,000). This amount could be used to offset expenses or added as an additional contribution to plan participant accounts.
  9. 10. Sample Services Available to Participants <ul><li>This is a sample list of the types of services available to plan participants: </li></ul><ul><li>Website Access </li></ul><ul><li>Participant newsletter </li></ul><ul><li>Financial Planning e-newsletter </li></ul><ul><li>Periodic on-site financial education workshops </li></ul><ul><li>Personalized retirement planning assessment prepared by Record-Keeper </li></ul><ul><li>401k loans available </li></ul><ul><li>401k rollover for consolidation of accounts </li></ul><ul><li>Option to include Profit Sharing plans for better retention </li></ul>
  10. 11. <ul><li>Sample Survey for 401k Plan Benefit </li></ul><ul><li>Survey Introduction: </li></ul><ul><li>Recognizing that providing a benefit that helps reward and retain employees, MVVF is looking into various options to leverage the power of our association and offer a packaged solution for use by members and their companies. </li></ul><ul><li>Your candid responses will be helpful in assessing the options available and the interest in pursuing them. </li></ul><ul><li>Sample Questions: </li></ul><ul><li>How many employees are presently in your organization? </li></ul><ul><li>___ 0 – 10; ____ 11 – 25; _____ 26 – 50; _____ 51 – 75; _____ 76 – 100; ____ 101 – 200; _____ 201+ </li></ul><ul><li>How many employees are located in Massachusetts and/or NH? </li></ul><ul><li>____ <=25; _____ 26 – 100; _____ > 100 </li></ul><ul><li>Does your company currently offer a 401k retirement plan? ____ Y; ____ N </li></ul><ul><li>If a 401k plan were available through the MVVF at a reduced cost for set up and ongoing administration, would you consider: </li></ul><ul><ul><li>Starting a plan: ____ Y; ____ N </li></ul></ul><ul><ul><li>Converting your present plan: _____ Y; _____ N </li></ul></ul><ul><li>If your firm does not offer a 401k, what are the main reasons (rank 1 -5, where 1 is most important)? </li></ul><ul><ul><li>Company just started </li></ul></ul><ul><ul><li>Fewer than 3 employees </li></ul></ul><ul><ul><li>Cost of administration </li></ul></ul><ul><ul><li>Not happy with choices offered </li></ul></ul><ul><ul><li>Cash Flow/Profitability of Firm is priority </li></ul></ul>

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