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Nationwide® Advanced Consulting Group

Best Practices When Working With Your 401(k) Clients

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Some things you need to know

This presentation is for educational purposes only and is not intended to be a solicitation or sale of a specific product or service.

The general information in this presentation is not intended to be nor should be treated as tax, legal, accounting or other professional advice. Additional facts and circumstances may exist that would impact the tax treatment of a specific transaction. Taxpayers should seek advice from an independent tax advisor before acting on any information presented.

Federal tax laws are complex and subject to change. The information contained herein is not intended to be, and should not be construed to be, tax or legal advice. Neither Nationwide nor its representatives give legal or tax advice. Consult with your attorney or tax advisor for answers to specific questions.

The Nationwide Group Retirement Series includes unregistered group fixed and variable annuities and trust programs. The unregistered group fixed and variable annuities are issued by Nationwide Life Insurance Company. Trust programs and trust services are offered by Nationwide Trust Company, FSB a division of Nationwide Bank®. Nationwide Investment Services Corporation, member FINRA. In MI only: Nationwide Investment Svcs. Corporation. Nationwide Mutual Insurance Company and Affiliated Companies, Home Office: Columbus, OH 43215-2220.

FOR BROKER/DEALER USE ONLY—NOT FOR USE WITH THE PUBLIC

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Agenda

• Set expectations• Develop a retirement plan strategy• Perform plan design consulting• Provide investment reviews• Assist with vendor management• Provide fiduciary education • Coordinate employee communication

FOR BROKER/DEALER USE ONLY—NOT FOR USE WITH THE PUBLIC

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Set expectations

• Define the relationship• Establish clear and reasonable

expectations• Quarterback the retirement plan “team”• Set the plan up for success

FOR BROKER/DEALER USE ONLY—NOT FOR USE WITH THE PUBLIC

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Develop a retirement plan strategy

• Develop an overall retirement plan strategy– Specific goals are critical– For the plan sponsor and participants– Ensure success– Assign roles

FOR BROKER/DEALER USE ONLY—NOT FOR USE WITH THE PUBLIC

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Overall retirement plan strategy

• Plan design• Investment performance• Increased plan participation • Cost saving strategies• Efficient and effective administration• Fiduciary education and liability

protection tools• Plan sponsor and participant education

FOR BROKER/DEALER USE ONLY—NOT FOR USE WITH THE PUBLIC

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Perform plan design consulting

• Provide information and insights on– Matching contribution formulas– Cross-tested profit sharing allocations– Qualification and eligibility issues– M&A situations

FOR BROKER/DEALER USE ONLY—NOT FOR USE WITH THE PUBLIC

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Plan design considerations

• Who will benefit under the plan?

• How much can the owner contribute for his/her own retirement?

• What is the organization’s cost objectives?

FOR BROKER/DEALER USE ONLY—NOT FOR USE WITH THE PUBLIC

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Assist in designing an investment policy statement (IPS)

• A plan sponsor should consider adopting an IPS

• In writing to reduce misunderstandings between the advisor and plan sponsor

• Becomes part of the plan document so MUST be followed

• Helps to minimize fiduciary liability

FOR BROKER/DEALER USE ONLY—NOT FOR USE WITH THE PUBLIC

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Provide ongoing investment reviews

• Confirm funds still reflect objectives in IPS• Monitor plan funds for style drift • Offer performance analysis at least

annually, if not quarterly

FOR BROKER/DEALER USE ONLY—NOT FOR USE WITH THE PUBLIC

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Provide ongoing investment reviews

• Provide quarterly plan performance reports

• Discuss investments utilized by the plan• Compare these to benchmarks• Provide appropriate investment option

alternatives for consideration if needed

FOR BROKER/DEALER USE ONLY—NOT FOR USE WITH THE PUBLIC

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Offer benchmarking assistance

• Provide benchmarking reports

• Investment performance

• Service provider fee comparisons

FOR BROKER/DEALER USE ONLY—NOT FOR USE WITH THE PUBLIC

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Provide ongoing plan reviews

• Schedule an annual plan review with the plan sponsor

• Discuss– Participation levels – Deferral percentages– Participant loans – Non-discrimination testing– Enrollment– Communication strategies

FOR BROKER/DEALER USE ONLY—NOT FOR USE WITH THE PUBLIC

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Vendor management

• Provide perspective on services and costs of plan recordkeepers, trustees or custodians

• Assist plan sponsor in comparing vendors and understanding what services are critical or simply a value-add

• RFPs, RFIs

FOR BROKER/DEALER USE ONLY—NOT FOR USE WITH THE PUBLIC

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Provide fiduciary compliance assistance• Is the plan document and IPS up to

date?• Have all participants received SPDs or

SMMs?• Have required annual notices been

timely sent?– Participant fee disclosure– 404(c) notices– QDIA notices– Safe harbor notices

FOR BROKER/DEALER USE ONLY—NOT FOR USE WITH THE PUBLIC

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Provide fiduciary education

• Who is a fiduciary?• Plan sponsor as fiduciary or settlor?• What duties can be delegated?• Consequences of violations?

FOR BROKER/DEALER USE ONLY—NOT FOR USE WITH THE PUBLIC

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Provide ongoing regulatory updates

• Provide regulatory updates–New and pending legislation–Department of Labor action– IRS action

FOR BROKER/DEALER USE ONLY—NOT FOR USE WITH THE PUBLIC

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Manage employee communications and education

• Coordinate enrollment meetings• Provide ongoing investment education

for participants around plan options– Plan distribution alternatives– Retirement cash flow analysis– Retiree investment asset allocation

FOR BROKER/DEALER USE ONLY—NOT FOR USE WITH THE PUBLIC

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Be the go-to retirement plan resource

• Serve as the primary contact• Trouble shoot• Coordinate plan actors

FOR BROKER/DEALER USE ONLY—NOT FOR USE WITH THE PUBLIC

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Thank you

Questions?

FOR BROKER/DEALER USE ONLY—NOT FOR USE WITH THE PUBLIC