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www.abaretirement.com
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Is Your Retirement Plan Right For Your Solo or Small Practice?
Presented by: [insert name] [insert title] Registered Representative of Voya Financial Partners, LLC (Member SIPC)
[insert date]
2016
CN-0215-12222-0317
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ABA Color Palette
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ABA Retirement Funds Program Presentation
Important Information
Please read the Program Annual Disclosure Document (April 2015), as
supplemented (September 2015), carefully before investing. This Disclosure
Document contains important information about the Program and investment
options. For email inquiries, contact us at: [email protected].
Registered representative of and Securities offered through Voya
Financial Partners, LLC (Member SIPC).
Voya Financial Partners is a member of the Voya family of companies (“Voya”).
Voya, the ABA Retirement Funds, Mercer Trust Company, and T.D. Ameritrade,
Inc. are separate, unaffiliated entities, and not responsible for one another’s
products and services.
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ABA Color Palette
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ABA Retirement Funds Program Presentation
Introductions & Agenda
1. Welcome
2. Attitudinal Overview of Law Professionals and
Retirement Planning
3. Retirement Plan Types Overview
4. Understanding Retirement Plan Costs
5. Selecting a Plan
6. Overview of the ABA Retirement Funds Program
7. Questions and Answers
www.abaretirement.com
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Yellow
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Orange
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Teal
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Brown
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ABA Color Palette
Lime Green
RGB=103,145,70
Purple
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Attitudinal Overview of Law Professionals
and Retirement Planning
5
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ABA Color Palette
Lime Green
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ABA Retirement Funds Program Presentation
Who is the small firm owner?
63% to 69% of lawyers work for small
firms with fewer than 10 employees1
Job
Creator
Supports
Local
Economies
Provides
Foundation
for National
Economy
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Yellow
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RGB=186,41,35
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Teal
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Brown
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ABA Color Palette
Lime Green
RGB=103,145,70
Purple
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ABA Retirement Funds Program Presentation
How do small firm owners feel about retirement plans2?
401(k) plans are
valuable
benefits
irrespective of
firm size
Offering a
401(k) helps
attract and
retain good
employees
Employees
value 401(k)s
even without an
employer match
401(k) plans
offer more
advantages than
other retirement
accounts
Small firms don’t
have access to
affordable
401(k) plans
Employers of all sizes understand
the value of employer-sponsored
retirement plans
Those who do not sponsor a
plan misunderstand the
advantages they offer
They can!
We’ll show
you how
Employer-Sponsored Retirement Plans “ESRP”
No Employer-Sponsored Retirement Plans “ESRP”
Percent of survey respondents who agreed with each statement
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RGB=186,41,35
Orange
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Teal
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ABA Retirement Funds Program Presentation
And yet, many don’t sponsor or participate in a workplace retirement plan3
77
65
69
50
23
35
31
50
2-4 Employees
5-9 Employees
10-19 Employees
20+ Employees
As employers get larger, the propensity to offer a retirement
plan increases
Nearly 8-in-10 small employers with 2-4
employees do not offer a retirement plan
Do you offer any type of retirement plan for your employees, or do you not offer such a plan?
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RGB=0,103,78
Yellow
RGB=197,150,11
Red
RGB=186,41,35
Orange
RGB=245,132,38
Teal
RGB=0,146,173
Brown
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ABA Color Palette
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ABA Retirement Funds Program Presentation
While many intend to participate, few actually do3
27
33
39
60% of employers either currently offer or are interested in offering a workplace retirement
plan
How are you saving for retirement?
Do you offer any type of retirement plan for your employees, or do
you not offer such a plan?
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Yellow
RGB=197,150,11
Red
RGB=186,41,35
Orange
RGB=245,132,38
Teal
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Brown
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ABA Color Palette
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ABA Retirement Funds Program Presentation
What might be the reason(s) for these conflicting outcomes4?
“I’ll do it later” succumbs to inertia
“My business is my pension”
The business never achieves its financial goals to allow its owners to fund a plan
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Yellow
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Red
RGB=186,41,35
Orange
RGB=245,132,38
Teal
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ABA Retirement Funds Program Presentation
We decided to ask for ourselves…
Don’t have enough employees
Can’t afford a matching contribution
Too expensive to set up
Haven’t had time to focus on it
Can’t afford the time to administer the plan
Too complicated to set up
We don’t want to take the role of fiduciary
We don’t know where to start
Hasn’t been recommended to us
Don’t want to save money in a qualified plan
Bad experience in the past
Don’t know the advantages of saving in a qualified plan
Top reasons why your firm does not offer an employer-sponsored retirement plan?
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Yellow
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Red
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Orange
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Teal
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Brown
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ABA Retirement Funds Program Presentation
We also asked what was most important
No out-of-pocket expenses
Ease of setting up or converting
Deferred tax status
Reputable brand name
Wide array of fund options
Low cost funds
Endorsement from industry organizations
Brokerage option
Fiduciary solutions
Most important benefits when selecting a retirement plan?
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RGB=186,41,35
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Teal
RGB=0,146,173
Brown
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ABA Color Palette
Lime Green
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Purple
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ABA Retirement Funds Program Presentation
What do we know so far?
…or it might be the perceived administrative burden…
…but they are not doing enough to save for their retirement needs.
Small law firm owners care about retirement benefits…
Seems cost may be one of the key issues with sponsoring a retirement plan…
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ABA Color Palette
Lime Green
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ABA Retirement Funds Program Presentation
Might it be the cost issue?
Remember the tax deferral benefits of
qualified contributions
Certain retirement products are
affordable and made for small firms
Look for opportunities to leverage
institutionally-priced funds
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Brown
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Lime Green
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ABA Retirement Funds Program Presentation
Are retirement plans truly that burdensome?
Service quality is one of the most important aspects of a sound retirement plan provider
Third-party administrators (“TPA”) can help with the administration of your plan
Some retirement products require less
administration
www.abaretirement.com
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Burgundy
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Yellow
RGB=197,150,11
Red
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Brown
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ABA Color Palette
Lime Green
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Purple
RGB=98,74,126 www.abaretirement.com
Retirement Plan Types Overview
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ABA Retirement Funds Program Presentation
What are your options?
SEP-IRA SIMPLE IRA 401(k)
Who is it for?
Self-employed individuals or small business owners, including those with employees
Who is it for?
Companies with 100 employees or fewer, that do not have any other retirement plan
Who is it for?
Companies of all sizes
What are the key advantages?
• Easy to setup and maintain
• Typically no or low initial setup or annual maintenance fee
What are the key advantages?
• Salary reduction plan with less administration
• No discrimination testing
• Employees share responsibility for their retirement
What are the key advantages?
• Generous contribution limits
• Most flexibility in plan construction
Who contributes?
Employers only
Who contributes?
Employer is required and
employee is optional
Who contributes?
Employer and employee
Consult IRS website for more details on product limits, eligibility, and other provisions
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Yellow
RGB=197,150,11
Red
RGB=186,41,35
Orange
RGB=245,132,38
Teal
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Brown
RGB=166,132,98
ABA Color Palette
Lime Green
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ABA Retirement Funds Program Presentation
What are your options?
SEP-IRA SIMPLE IRA 401(k)
How is the administration?
• No Form 5500 filing
• Very limited employee
notifications
How is the administration?
• No Form 5500 filing
• Limited initial and annual
employee notifications
How is the administration?
• Form 5500 filing required for
plan with $250K or more
• Required employee
notifications (initial and annual)
What are the Contribution Limits?
Employer contribution limited annually to the lesser of
1. 25% of compensation, or
2. Section 415 limit (lesser of 25% of compensation or $53K for 2016)
Employer must contribute the same percentage of compensation for all employees – including themselves
What are the Contribution Limits?
Employer can either: make dollar-for-dollar matching contributions (not to exceed 3% of the employee's compensation on behalf of eligible employees who make elective-deferral contributions), or a 2% non-elective contribution to all eligible employees, regardless of whether they make deferral contributions
Employee contributes up to 100% of compensation through salary deferral, not to exceed $12,500 (2016)
Catch-up contributions of up to $3,000 (2016) available for those age 50 or older
What are the Contribution Limits?
Employee (owner or spouse) can make salary deferral contributions of up to 100% of compensation, not to exceed $18,000 (2016)
Catch-up contributions of up to $6,000 (2016) available for those age 50 or older
Total of all employee and employer contributions (including forfeiture) cannot exceed the lessor of 100% of compensation or $53K or $59,000 if age 50 or older (2016)
Consult IRS website for more details on product limits, eligibility, and other provisions
18
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Light Gray
RGB=173,185,192
Blue
RGB=0,85,149
Burgundy
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Dark Green
RGB=0,103,78
Yellow
RGB=197,150,11
Red
RGB=186,41,35
Orange
RGB=245,132,38
Teal
RGB=0,146,173
Brown
RGB=166,132,98
ABA Color Palette
Lime Green
RGB=103,145,70
Purple
RGB=98,74,126
ABA Retirement Funds Program Presentation
What are your options?
SEP-IRA SIMPLE IRA 401(k)
Consult IRS website for more details on product limits, eligibility, and other provisions
How much can it cost?
Typically no or low initial setup
or annual maintenance fee
How much can it cost?
Typically low plan and/or
participant cost
How much can it cost?
Typically slightly more expensive than a SEP-IRA or SIMPLE IRA, but can vary from provider to provider
What access1 do I have to my savings?
Withdraw at any time, but a
10% penalty may apply if you
are under age 59½.
What access1 do I have to my savings?
Withdraw at any time, but a
10% penalty may apply if you
are under age 59½. If the
withdrawal is taken within first
two years of participation in the
plan, that penalty increases to
25%.
What access1 do I have to my savings?
Loans may be available. Hardship withdrawals may be available but a 10% penalty may apply if you are under age 59½.
Withdrawals can be taken upon a "trigger" event such as turning age 59½, disability, termination of employment, and/or plan termination.
1. If you withdraw the money before age 59½, you are generally subject to a 10% early withdrawal penalty, subject to certain exceptions. For SIMPLE IRAs, if the withdrawal is made
within the first two years of plan participation, the 10% penalty increases to 25%.
www.abaretirement.com
Green
RGB=0,169,79
Dark Gray
RGB=65,89,104
Light Gray
RGB=173,185,192
Blue
RGB=0,85,149
Burgundy
RGB=143,44,85
Dark Green
RGB=0,103,78
Yellow
RGB=197,150,11
Red
RGB=186,41,35
Orange
RGB=245,132,38
Teal
RGB=0,146,173
Brown
RGB=166,132,98
ABA Color Palette
Lime Green
RGB=103,145,70
Purple
RGB=98,74,126 www.abaretirement.com
Understanding Retirement Plan Costs
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Light Gray
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Burgundy
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RGB=0,103,78
Yellow
RGB=197,150,11
Red
RGB=186,41,35
Orange
RGB=245,132,38
Teal
RGB=0,146,173
Brown
RGB=166,132,98
ABA Color Palette
Lime Green
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Purple
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ABA Retirement Funds Program Presentation
Price Affordability Fees can erode your savings
You should have a thorough understanding of your plan’s cost, which can
include costs to your firm as well as costs to your participating employees.
Consider how just a one percentage point difference in fees could affect your account balance over time
$250,000
$200,000
$150,000
$100,000
$50,000
$0 35 Years Invested
This example by Voya Financial is for illustrative purposes only. Investment results
will vary. Systematic investing does not ensure a profit or guarantee against loss.
0.50% fees 1.50% fees
$69,716 Difference
A $25,000 investment with
$100 monthly contributions
earning an average of 6%
annually and paying 0.5% will
grow to approximately
$286,288 over 35 years.
A $25,000 investment with
$100 monthly contributions
earning an average of 6%
annually and paying 1.5% will
grow to approximately
$216,572 over 35 years.
$286,288
$216,572
That 1% higher expense can equate to a 24% lower account balance.
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Dark Gray
RGB=65,89,104
Light Gray
RGB=173,185,192
Blue
RGB=0,85,149
Burgundy
RGB=143,44,85
Dark Green
RGB=0,103,78
Yellow
RGB=197,150,11
Red
RGB=186,41,35
Orange
RGB=245,132,38
Teal
RGB=0,146,173
Brown
RGB=166,132,98
ABA Color Palette
Lime Green
RGB=103,145,70
Purple
RGB=98,74,126
ABA Retirement Funds Program Presentation
Planning for retirement is an important task – one that pays off best when started early
In the example below we show you the retirement plans of Sarah and Adam
who saved the same amount monthly but started at different times.
Sarah starts saving at 25, she invests $1,000 a month for 25 years. At 50 years of age Sarah stops contributing to
her savings and relies only on the power of compounding for the next 15 years. The result is a retirement nest egg
of nearly $1,700,000 at age 65.
Adam decides to put off starting his retirement savings until the age of 40. His total after 25 years of continuous
$1,000 a month contributions is nearly $698,000.
Sarah’s 15 year head
start produced
$974,000 more in
savings than Adam.
That’s the power of
starting early.
Note: This example uses a 6% annual return on investment, and because of the tax deferred nature of retirement accounts the power of compounding is impactful because there are no
taxes to be paid on interest and dividends that could otherwise deplete assets each year. For illustration purposes only. Not drawn to scale.
22
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RGB=65,89,104
Light Gray
RGB=173,185,192
Blue
RGB=0,85,149
Burgundy
RGB=143,44,85
Dark Green
RGB=0,103,78
Yellow
RGB=197,150,11
Red
RGB=186,41,35
Orange
RGB=245,132,38
Teal
RGB=0,146,173
Brown
RGB=166,132,98
ABA Color Palette
Lime Green
RGB=103,145,70
Purple
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ABA Retirement Funds Program Presentation
Know the various types of fees
1. Recordkeeping and general
administration fees are typically billed
monthly directly to your firm or deducted
from participant assets through a basis
points fee (“bps”)
2. Investment advisory fees are often billed
quarterly and paid either by the firm or
deducted from participant assets
3. Trust fees are usually billed quarterly and
paid either by the firm or deducted from
participant assets
Here is a short list of possible ways your retirement plan may be paying fees today.
All of these can quickly add up to thousands of dollars which can erode the profits of your law firm,
and negatively impact an employee’s retirement savings
Many providers use a variety of ways to collect revenue from
retirement plans – some are more transparent than others
4. Fees that apply to certain transactions
such as loan set-up and maintenance,
rollovers, QDRO, enrollment meetings,
and enrollment packages are one-time
fees that may be paid for by participants
5. Other fees may be charged for year-end
and other miscellaneous processes such
as plan redesign, IRS plan determination
filings, fund adjustments, correspondence
with IRS and DOL, etc.
6. Investment fees, also known as the funds’
expense ratio, can range widely
depending on the funds, and share class
they belong to
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Light Gray
RGB=173,185,192
Blue
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Burgundy
RGB=143,44,85
Dark Green
RGB=0,103,78
Yellow
RGB=197,150,11
Red
RGB=186,41,35
Orange
RGB=245,132,38
Teal
RGB=0,146,173
Brown
RGB=166,132,98
ABA Color Palette
Lime Green
RGB=103,145,70
Purple
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ABA Retirement Funds Program Presentation
A Closer Look at Expense Ratios
How do they work?
The expense ratio represents the percentage of the fund's assets that go purely toward the expenses of running
the fund. The expense ratio covers the investment manager fee, the administrative costs and other operating
expenses. The practical aspect of the expense ratio is that it wraps all these various costs and expenses into
one number that’s easy to calculate. Currently, the typical expense ratio for an actively managed mutual fund in
the industry is about 1.5%.1 Assume an asset balance of $100,000 and expense ratio of 1.5%. The annual
expenses borne by that account are equal to $1,500 ($100,000 x 0.015 = $1,500).
Breaking down the Program’s fees
The Program is committed to providing full
fee transparency. For illustrative purposes,
the table to the right breaks down Program
fees based on averages across all core
Funds available through the Program.2
Breaking down the Program’s fees
Investment Manager Fees
Acquired Fund Fees and Expenses
Program Expense Fees
Subtotal Fees
Trust, Management, and Administration Fee
and Other Fees
Total Average Fees
0.07%
0.14%
0.47%
0.68%
0.12%
0.80%
Trustee
Recordkeeping
Tax reporting
Compliance testing
Investment
management
Custom participant
communication and
education services
Participant
distribution (loans,
withdrawals)
Plan set-
up/conversion/install
ation
Fiduciary services
termination
1 Source: The Motley Fool
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Light Gray
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Blue
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Burgundy
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Dark Green
RGB=0,103,78
Yellow
RGB=197,150,11
Red
RGB=186,41,35
Orange
RGB=245,132,38
Teal
RGB=0,146,173
Brown
RGB=166,132,98
ABA Color Palette
Lime Green
RGB=103,145,70
Purple
RGB=98,74,126
ABA Retirement Funds Program Presentation
Service Provider Disclosures 408(b)(2)
What are the new Disclosure Requirements?
• Intended to make it easier for plan
fiduciaries to assess the
reasonableness of the fees paid to
service providers in comparison with the
service provider’s delivery of services
and performance.
• Requires service providers to disclose
to plan sponsors information about:
1. the services to be performed; and
2. the fees and compensation to be
received for performing those
services.
Participant Disclosure 404a-5
• Participant Disclosure Requirements
• Plan Administrators are required to
furnish participants, eligible employees,
beneficiaries and alternate payees
certain plan related disclosures and to
provide a comparison of the plan’s
investment options and rates of return
and fees on a regular basis.
www.abaretirement.com
Green
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Dark Gray
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Light Gray
RGB=173,185,192
Blue
RGB=0,85,149
Burgundy
RGB=143,44,85
Dark Green
RGB=0,103,78
Yellow
RGB=197,150,11
Red
RGB=186,41,35
Orange
RGB=245,132,38
Teal
RGB=0,146,173
Brown
RGB=166,132,98
ABA Color Palette
Lime Green
RGB=103,145,70
Purple
RGB=98,74,126 www.abaretirement.com
Selecting a Plan
26
Green
RGB=0,169,79
Dark Gray
RGB=65,89,104
Light Gray
RGB=173,185,192
Blue
RGB=0,85,149
Burgundy
RGB=143,44,85
Dark Green
RGB=0,103,78
Yellow
RGB=197,150,11
Red
RGB=186,41,35
Orange
RGB=245,132,38
Teal
RGB=0,146,173
Brown
RGB=166,132,98
ABA Color Palette
Lime Green
RGB=103,145,70
Purple
RGB=98,74,126
ABA Retirement Funds Program Presentation
Selection of plan type & features – New Plan? P
lan
Typ
es
What type of
plan is right
for your firm?
Defined
Benefit
Cash
Balance
Plan
Money
Purchase
SEP IRA/
MyRA SIMPLE
Pla
n S
tra
teg
ies
What plan
strategy
meets your
objectives?
Safe Harbor
Maximize contributions
while reducing
limitations associated
with testing
Social Sec. Integration
Formula awards higher-
paid employees with a
larger percentage of
their compensation
Cross-tested
Different employee
groups defined and
separate contributions
to each group are made
Pla
n F
ea
ture
s
What plan
features will
make your
plan unique?
Eligibility & Vesting
Investment Options &
Trading Restrictions
Match &
Match Structure
Distribution & Rollover
Options
Automatic Features &
QDIA
Self-Directed
Brokerage Service
TIP Does your plan include an advice offering?
TIP If your strategy is to maximize tax deferred contributions, look into adding a Cash Balance plan to your 401(k)
This example was designed for educational purposes only and is not intended for specific legal, accounting, investment, income tax or other professional advice. Please note that other plan types, strategies, and features may exist.
Profit
Sharing /
401(k)
27
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Dark Gray
RGB=65,89,104
Light Gray
RGB=173,185,192
Blue
RGB=0,85,149
Burgundy
RGB=143,44,85
Dark Green
RGB=0,103,78
Yellow
RGB=197,150,11
Red
RGB=186,41,35
Orange
RGB=245,132,38
Teal
RGB=0,146,173
Brown
RGB=166,132,98
ABA Color Palette
Lime Green
RGB=103,145,70
Purple
RGB=98,74,126
ABA Retirement Funds Program Presentation
Selection of providers
Maintains the participant records; trades the shares when contributions are deposited and when participants reallocate their portfolios; provides the web site and call center for the participants and plan sponsors; and generates and mails the participant statements.
Recordkeeper
Drafts the plan document; performs the compliance testing; and prepares the annual IRS Forms 5500. These tasks are sometimes part of a bundled service provided by a recordkeeper.
Third Party
Administrator
A Bank or Trust Company acts as Custodian; initially accepts the contributions, processes loan- and distribution checks; and prepares tax reporting. Trust Company
Provides advice and guidance on investment selection and allocation to the trustees; may also serve as directed or discretionary trustee; and on rare occasions can take on investment fiduciary role.
Investment
Advisor
Consultant can be used in the request for proposal (“RFP”) process and retained to evaluate the plan’s merits from time to time. Consultants
Provides advice and guidance on investment options to employees participating in the plan; may take on professional asset management role for a fee; may take on fiduciary responsibility for participant in-plan investments.
Advisory Firm
Can advise on plan types, plan features, and plan documents. May also help resolve plan qualification issues or disputes.
ERISA Attorney
While payroll companies offer services unrelated to retirement plans, the link between payroll and participant contributions to qualified plans does require consideration when picking a payroll vendor.
Payroll Company
This example was designed for educational purposes only and is not intended for specific legal, accounting, investment, income tax or other professional advice. Please note that other types of providers may exist.
28
Green
RGB=0,169,79
Dark Gray
RGB=65,89,104
Light Gray
RGB=173,185,192
Blue
RGB=0,85,149
Burgundy
RGB=143,44,85
Dark Green
RGB=0,103,78
Yellow
RGB=197,150,11
Red
RGB=186,41,35
Orange
RGB=245,132,38
Teal
RGB=0,146,173
Brown
RGB=166,132,98
ABA Color Palette
Lime Green
RGB=103,145,70
Purple
RGB=98,74,126
ABA Retirement Funds Program Presentation
Administration and Maintenance Service levels
Typically, your participants have several options to make investment
election changes and transfers
TIP Does your provider offer service level guarantees?
Things to keep in mind:
1 Make sure your participants are familiar with any trading or transfer restrictions
within your plan’s fund lineup
2 If your plan includes a self-directed brokerage window, investment election
changes and restrictions may be different from those of funds in the plan
3 Beware of cut off times for processing of investment election changes as this is
often a source of complaint by participants
4 Find out if your current provider offers automatic investment reallocation to keep
participant accounts on track
29
Green
RGB=0,169,79
Dark Gray
RGB=65,89,104
Light Gray
RGB=173,185,192
Blue
RGB=0,85,149
Burgundy
RGB=143,44,85
Dark Green
RGB=0,103,78
Yellow
RGB=197,150,11
Red
RGB=186,41,35
Orange
RGB=245,132,38
Teal
RGB=0,146,173
Brown
RGB=166,132,98
ABA Color Palette
Lime Green
RGB=103,145,70
Purple
RGB=98,74,126
ABA Retirement Funds Program Presentation
Administration and Maintenance Accessing Funds
There are a few different ways participants typically access funds
from their plan accounts
1 2 3 4 5
Distribution resulting from termination occurs when a participant quits, retires,
or is fired.
When a participant dies, you are responsible for checking the
participant’s records to determine the named beneficiary and the
type of death benefit, if any, the beneficiary should receive.
Typically for the employee who has met the age- or service-based criteria for
withdrawal and is still employed.
Only specific financial conditions qualify for hardship withdrawals.
Assuming loans are
allowed under your plan,
a participant may request
a loan from the vested
portion of his or her
account.
TIP
When a participant leaves your firm, an account distribution is not
required. In fact, a participant with a vested account balance of more
than $5,000 can maintain the account with your firm’s plan (subject to
required minimum distributions at age 701/2).
30
Green
RGB=0,169,79
Dark Gray
RGB=65,89,104
Light Gray
RGB=173,185,192
Blue
RGB=0,85,149
Burgundy
RGB=143,44,85
Dark Green
RGB=0,103,78
Yellow
RGB=197,150,11
Red
RGB=186,41,35
Orange
RGB=245,132,38
Teal
RGB=0,146,173
Brown
RGB=166,132,98
ABA Color Palette
Lime Green
RGB=103,145,70
Purple
RGB=98,74,126
ABA Retirement Funds Program Presentation
Administration and Maintenance Compliance and Communications
As Plan Administrator, you will need to determine the requirements that apply to your
plan based on the number of participants in your plan and your plan type
Participant communication
requirements
1
The Department of Labor
(“DOL”) mandates that
certain communications to
plan participants be
conducted, and may
include:
1. Enrollment kit for
eligible employees
2. Summary plan
description
3. Summary of material
modifications
4. Summary annual report
5. Participant disclosure
Plan testing requirements
2
Testing is done each year to
monitor whether the plan is
in compliance with certain
IRS and DOL requirements,
and includes:
1. Annual additions
2. Top-heavy
3. ADP and ACP
nondiscrimination
testing
4. 410(b) Coverage
testing
Reporting requirements
Form 5500 is the annual
return for your retirement
plan that must be filed. It is
required to ensure
employee benefit plans are
operated and managed
correctly.
3
31
Green
RGB=0,169,79
Dark Gray
RGB=65,89,104
Light Gray
RGB=173,185,192
Blue
RGB=0,85,149
Burgundy
RGB=143,44,85
Dark Green
RGB=0,103,78
Yellow
RGB=197,150,11
Red
RGB=186,41,35
Orange
RGB=245,132,38
Teal
RGB=0,146,173
Brown
RGB=166,132,98
ABA Color Palette
Lime Green
RGB=103,145,70
Purple
RGB=98,74,126
ABA Retirement Funds Program Presentation
Administration and Maintenance Plan Termination
Although employers establish retirement plans with every intention of having a long-term
retirement vehicle, there are occasions when the decision is made to terminate it
When Must You Terminate the Plan?
Some, but not all, examples of occasions when the plan must be terminated
are as follows:
• Firm has dissolved and is no longer doing business,
• Sole proprietor has passed away and a successor employer will not be
continuing the plan, or
• Sole proprietor has retired and a successor employer will not be
continuing the plan.
TIP
A partial termination of the plan may be triggered if a significant portion of the firm's
employees have severed employment due to firm-initiated employee dismissal such as a
layoff. The IRS presumes that a partial termination has occurred if the plan's turnover rate
is at least 20% of the active employees. When a partial termination of the plan occurs,
affected participants (e.g., those who are no longer participants due to the event) must
become 100% vested. There is no requirement that the plan must be terminated or that
other participants be vested or receive distributions.
www.abaretirement.com
Green
RGB=0,169,79
Dark Gray
RGB=65,89,104
Light Gray
RGB=173,185,192
Blue
RGB=0,85,149
Burgundy
RGB=143,44,85
Dark Green
RGB=0,103,78
Yellow
RGB=197,150,11
Red
RGB=186,41,35
Orange
RGB=245,132,38
Teal
RGB=0,146,173
Brown
RGB=166,132,98
ABA Color Palette
Lime Green
RGB=103,145,70
Purple
RGB=98,74,126 www.abaretirement.com
Overview of the ABA Retirement Funds
Program
33
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RGB=0,169,79
Dark Gray
RGB=65,89,104
Light Gray
RGB=173,185,192
Blue
RGB=0,85,149
Burgundy
RGB=143,44,85
Dark Green
RGB=0,103,78
Yellow
RGB=197,150,11
Red
RGB=186,41,35
Orange
RGB=245,132,38
Teal
RGB=0,146,173
Brown
RGB=166,132,98
ABA Color Palette
Lime Green
RGB=103,145,70
Purple
RGB=98,74,126
ABA Retirement Funds Program GP Solo & Small Firm Educational Presentation
Recognizing a need in the legal community
In 1963, the American Bar Association created a not-for-profit corporation to offer
a unique retirement plan Program – the ABA Retirement Funds Program
9 out of 10 lawyers work for firms with fewer than
ten attorneys1
Only 17.3% of Companies with fewer than ten employees sponsor a retirement plan2
The annual median
income for lawyers is
$112,7603, which
compares favorably to
the nationwide median
household income of
$51,9144
Lawyers - much like
everyone else – can
exhibit behavioral
tendencies that
negatively impact
retirement savings
(e.g., loss aversion,
familiarity bias)
1. The Lawyer Statistical Report, American Bar Foundation, 2012 edition
2. Employee Benefit Research Institute estimates from the 2011 March Current Population
Survey
Access
Ability Willingness
3. Bureau of Labor Statistics, 2010
4. U.S. Census Bureau, American Community Survey, 5-Year Estimates
34
Green
RGB=0,169,79
Dark Gray
RGB=65,89,104
Light Gray
RGB=173,185,192
Blue
RGB=0,85,149
Burgundy
RGB=143,44,85
Dark Green
RGB=0,103,78
Yellow
RGB=197,150,11
Red
RGB=186,41,35
Orange
RGB=245,132,38
Teal
RGB=0,146,173
Brown
RGB=166,132,98
ABA Color Palette
Lime Green
RGB=103,145,70
Purple
RGB=98,74,126
ABA Retirement Funds Program Presentation
ABA Retirement Funds Program Structure
Oversight Responsibility
Board of Directors comprised of no fewer than
10 attorneys
Board of Directors supported by:
• Full-time Staff; Executive Director,
Director, Program Operations
• Outside experts including independent
counsel & consultants
ABA Retirement Funds
All data as of December 31, 2014 or otherwise noted.
1. Assets under advisement includes aggregated data for Mercer Trust Company and its affiliated companies globally (“Mercer”). Data is derived from a variety of sources, including, but not limited to, third-party
custodians or investment managers, regulatory filings, and client self-reported data. Mercer has not independently verified the data. Where available, data is provided as of December 31, 2014 (“Reporting Date”).
If data was not available as of the Reporting Date, information from a date closest in time to the Reporting Date, which may be of a more recent date than the Reporting Date, was included. Data includes assets
of clients that have engaged Mercer to provide project-based services within the 12-month period ending on the Reporting Date, and assets of clients that subscribe to Mercer’s Manager Research database.
2. As published by Pensions and Investments Special Report of top DC Recordkeepers as of March 9, 2015 (based on September 2014 data).
3. TD Ameritrade was evaluated against 17 others in the 2015 Barron's Online Broker Review, March 7, 2015 and was awarded the highest star ratings (4.5) shared with 2 others. Star ratings are out of a
possible 5. Read the Article at http://webprints.djreprints.com/50013.html
ABA Retirement Funds
Program sponsor; not-for-profit corporation
Nearly 3,800 law firm retirement plans
Over $5.5 billion in assets
More than 50 years of service to the legal
community
Investment Fiduciary, Trustee, and Custodian
Mercer Trust Company and its
affiliates globally, have 40+ years of
investment experience, advising on
over $9 trillion1
Has provided consulting services to
8 of the 10 largest US pension funds1
A leading provider of financial
products and services in the U.S.
One of the largest Defined
Contribution Recordkeepers with
over 48,000 plans2
Recordkeeping, Client Service and Sales
Self-Directed Brokerage Service
Offers over 13,000 domestic and
international mutual funds
Ranked #1 for Long-Term Investing
and #1 for Novices in Barron’s 2015
Online Broker Review3
35
Green
RGB=0,169,79
Dark Gray
RGB=65,89,104
Light Gray
RGB=173,185,192
Blue
RGB=0,85,149
Burgundy
RGB=143,44,85
Dark Green
RGB=0,103,78
Yellow
RGB=197,150,11
Red
RGB=186,41,35
Orange
RGB=245,132,38
Teal
RGB=0,146,173
Brown
RGB=166,132,98
ABA Color Palette
Lime Green
RGB=103,145,70
Purple
RGB=98,74,126
ABA Retirement Funds Program Presentation
With nearly 3,800 law firm retirement plans across the U.S., the Program may already know someone in your neighborhood
Sample distribution of Program Members in the United States
www.abaretirement.com
Green
RGB=0,169,79
Dark Gray
RGB=65,89,104
Light Gray
RGB=173,185,192
Blue
RGB=0,85,149
Burgundy
RGB=143,44,85
Dark Green
RGB=0,103,78
Yellow
RGB=197,150,11
Red
RGB=186,41,35
Orange
RGB=245,132,38
Teal
RGB=0,146,173
Brown
RGB=166,132,98
ABA Color Palette
Lime Green
RGB=103,145,70
Purple
RGB=98,74,126 www.abaretirement.com
Thank You ABA Retirement Funds Program
P.O. Box 5142
Boston, MA 02206-5142
800.826.8901
www.abaretirement.com
© 2015 ABA Retirement Funds Program
2015
37
Green
RGB=0,169,79
Dark Gray
RGB=65,89,104
Light Gray
RGB=173,185,192
Blue
RGB=0,85,149
Burgundy
RGB=143,44,85
Dark Green
RGB=0,103,78
Yellow
RGB=197,150,11
Red
RGB=186,41,35
Orange
RGB=245,132,38
Teal
RGB=0,146,173
Brown
RGB=166,132,98
ABA Color Palette
Lime Green
RGB=103,145,70
Purple
RGB=98,74,126
ABA Retirement Funds Program Presentation
Endnotes
1. The Lawyer Statistical Report, American Bar Foundation, 1985, 1994, 2004, 2012 editions.
2. “Micro Market Marketing Study” by the ABA Retirement Funds Program, First Quarter 2012.
3. “Poll Report: Small Business Owners’ Views on Retirement Security” Main Street Alliance and American Sustainable
Business Council, June 2013.
4. “Small Business Owners Are Unprepared for Retirement”, The American College, Bryn Mawr, February 28, 2012.
5. “Nearly half of small-business owners may never retire”, by Dennis Jacobe, Chief Economist, October 1, 2010.
6. The Health and Retirement Study (HRS),