and Fiduciary Services Sean Arnold amp Rick Schultz BPAS BPAS Mission to provide retirement plans that work Plans that work AutoRollovers Automatic Enrollment Automatic Rebalancing ID: 1047167
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1. IRA Rollovers, MyPlanLoan, and Fiduciary ServicesSean Arnold & Rick SchultzBPAS
2. BPAS’ Mission to provide retirement plans that workPlans that workAutoRolloversAutomatic EnrollmentAutomatic RebalancingFiduciary ServicesRegulatory EnvironmentBPAS Fiduciary DCBPAS Fiduciary DBSession Overview:
3. IRA$electRollover solution for employees uncertain of where to rolloverIn partnership with FI or, up to the minimum threshold for FI to service directly.Could mean more AUM retention for FI, account retention for BPASMyPlanLoanLoan ContinuationLoan AdministrationSession Overview:
4. Higher Participation RatesBetter Employee Investment DecisionsGreatly Improved Employee Retirement Preparedness EQUALSA Satisfied ClientGreater Success for BPAS & our PartnersPlans that work
5. Offered as a service to Plan Sponsorsminimizes number of terminated participants with small balancesBalances <$5000, generally $200 - $5,000May exclude external rollover amounts from determinationAutoRollovers
6. Complete the 4-step online enrollment processSalary DeferralInvestment ElectionBeneficiaryConfirmAutomatic Enrollmentaka: Freedom Savings Plans
7. Automatic Rebalancing
8. Fiduciary - Regulatory EnvironmentExpansion of the definition of fiduciaryPlan sponsorsMost don’t understandOthers want to off-load as much liability as possibleFinancial Intermediariesworried about liabilityLimit Reps that can act in an advisory capacityIRAs are the next potential target of the DOLThis presents a problem for everyone, but also an opportunity.If your organization, whether it be a broker dealer, bank, or an advisory firm, is able and willing to provide ERISA 3(21) or 3(38) Fiduciary ServicesIf not, BPAS can assist in providing a solution.8
9. BPAS Fiduciary Services9Goal – Develop products / services to assist our partnersERISA 3(38) Fiduciary ProductsBPAS Fiduciary DCBPAS Fiduciary DBIRA$electCustom Services
10. Fiduciary DC – Institutional, 25, 50BPAS Fiduciary ServicesERISA 3(38) Fiduciary (highest protection for plan sponsor)Pre-Selected investment menuInvestment Policy StatementComprehensive manager search & selection processManagement of Fund Additions and DeletionsQualified Default Investment Alternative – Target Date FundsQuarterly investment monitoring report, including quarterly fund commentaries for use by the FI10
11. Financial IntermediaryRelationship manager with the plan sponsorMeet with Plan sponsor to review investments, plan activity and benchmarking reports, etc.Initial and ongoing participant educationCompensation OptionsFee Based (Institutional) set needed basis pointsCommission Based 0.25% or 0.50% 12(b)1Sample Agreement11Fiduciary DC – Institutional, 25, 50
12. Fiduciary ServicesWhy use Fiduciary DCFI’s Firm does not want the FI selecting fundsEconomies of scaleFund changes happen automaticallyFI has more time to service clients and sell more businessLarge advisor uses this product for small plansCustom Fiduciary ServicesMaintain investment menus for various fund universesProvide back office supportOtherERISA 3(16) Fiduciary12
13. The ProblemBPAS has been working to devise a mutually beneficial solution to encourage terminated employees to leave accumulated retirement savings invested for the future.Options:Leave in the PlanRollover into new employer’s planRollover to an IRA
14. IRA$elect – BPAS Distribution Activity
15. IRA$elect – Rollovers vs. Cash OutsDollar AmountNumber of Distributions
16. IRA$elect – The Solution
17. IRA$elect - Flexibility
18. Fiduciary Concerns & RolloversEducation vs. AdviceFiduciary CapacityPlan-level fiduciary or, Participant-levelCompensation Issues
19. MyPlanLoanLoan ContinuationProvides terminated employees with the option to continue repaying on their outstanding plan loans.Can be implemented as an ancillary service for plans that wish to retain payroll-deduct repayments for active employees.Loan AdministrationEliminates HR/Payroll departments from the loan repayment process.
20. Sponsor handles much of processLoan payments are not always applied correctlyInability for Participant to make additional principal paymentsIssues experienced in proper handling of loan defaultsUpon termination of employment, participant must either repay outstanding balance within 90 days or be forced to defaultTraditional Loans ProcessingSponsor “gets out of loan business”BPAS assumes all aspects of payment processingParticipants can make additional principal payments at any timeBPAS alerts Participants of pending loan default and notifies CustodianTerminated Participants can opt to continue to pay their loan instead of being forced to defaultMyPlanLoan ProcessingThe MyPlanLoan Difference
21. MPL isn’t just for BPAS plansMPL Portal available for record keepers and custodians with plans outside of BPAS who wish to use the servicePortal provides link to MPL’s loan administration systemNew Loans can be created either manually or through an importMyPlanLoan a BPAS Service
22. Follow MPL’s wizard to add or transfer a loan (or import a file)Loans can be added by source, if system needs to track that way MyPlanLoan Portal
23. Receive confirmation on web page and via data fileMPL takes over repayment processing from here!23MyPlanLoan Portal
24. Use the MPL Portal to Look up Participant Loan historyView Amortization SchedulesView Statements and PaymentsMyPlanLoan Portal
25. MyPlanLoan Case StudyLarge National Brokerage firm seeking to improve participant loan compliance for FBO accounts.MPL brings ability to track loan payments to amortization scheduleProvides a means to identify loan failures (missed payments, 72(p) loan.
26. Fiduciary DB (including cash balance)BPAS Fiduciary ServicesCustody of plan assetsPayor servicesBenefit payments including 1099’s (check or ACH)Pay plan expenses
27. Fiduciary DB (including cash balance)BPAS Fiduciary ServicesInvestment ManagementERISA 3(38) FiduciaryDevelop Asset AllocationInput from Plan Sponsor & ActuaryPlan Sponsor’s risk profileMinimum funding requirementsPension ExpenseDe-RiskingPlan’s cash flow requirementsExpected contributions & benefit paymentsLiability Driven Investing (LDI)
28. Investment Management (continued)Investment Policy StatementInvestment SelectionPrimarily low cost index fundsQuarterly Performance / Monitoring ReportFinancial IntermediaryRelationship manager with the plan sponsorGather information from the Plan Sponsor and ActuaryMeet with Plan Sponsor to review the investmentsCompensation OptionsFee Based (Institutional)Set your basis pointsCommission Based availableFiduciary DB (including cash balance)
29. Questions?29
30. ContactSean ArnoldBPASsarnold@bpas.com30Rick SchultzBPASrschultz@bpas.com