What is College Tuition Benefit - CTB?

• CTB is a fantastic attention getter!– Employers can not afford additional benefits– Putting a child through college is many employees most

pressing financial concern, Retirement can wait.– Many decision makers are in the same boat. They have not

saved for their children’s college education

• There is no direct cost to the employer or employee – Scholarships come from participating colleges.

• Over 30% of the Nation’s private colleges honor the scholarship program. And the list is growing!

• Employers communicate to, and enroll employees in CTB, as part of a voluntary benefit program. In this way employers optimize existing benefit platforms or begin delivering financial products that help employees address financial concerns.

What is College Tuition Benefit - CTB?• CTB makes it possible to provide every

employees’ Child, Grandchild, Niece or Nephew with a guaranteed college Education. All Scholarships come from our network of Private colleges.

• Scholarships are awarded as a percentage of the employees retirement account balance

• Employers communicate to, and enroll employees in CTB, as part of a Colonial voluntary benefit program. In this way Employers:– optimize existing benefit platforms and,– deliver financial products that help employees

address financial concerns.

Families are making Sacrifices between Retirement and College Savings

Would you postpone your retirement by two years if it meant your child attending a

college of choice without taking on more debt? (2007-07-31)

Families are making Sacrifices between Retirement and College Savings

How do you allocate your savings between retirement plans and college savings plans?

(2006-04-10)

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MetLifeStudy of Employee Benefits TrendsFindings from the National Survey of Employers and Employees

NEARLY 60% OF EMPLOYERS BELIEVE BENEFITS ARE VERY IMPORTANT IN RETAINING EMPLOYEES

How does CTB Benefit the employee? Employer?

Employees receive an initial Tuition Reward just for being an eligible employee. The initial reward then increases each year the employee remains employed, by either a fixed amount, or by 5% of the employee’s retirement account balance, such as a 401k or 403b. CTB does not affect the retirement account in any way.

Employers benefit through recruitment and retention, and increased 401k participation.

–What employer wouldn’t want to tell new and existing employees, “At our firm we help pay for your Children’s, Grandchildren’s, Nieces’ and Nephews’ College Education”.–Employers experience a 13% increase in 401k/retirement plan participation

CTB Plan Details• Plan Option 1

– Each employee receives 500 Tuition Rewards. Spouses can also register for 500, for a family total of 1,000 Tuition Rewards.

– The Employee’s initial award grows each year by 5% of their 401k, 403b, retirement account balance.

• Plan Option 2– Each employee receives a 1,000 Tuition Rewards at enrollment.– Each registered Student receives 500 Tuition Rewards in their name.– Employee then receives 1,000 additional rewards annually on an

employment anniversary date chosen by the employer

• Employee can use Rewards to reduce tuition costs at over 275 colleges.

• Maximum Rewards an employee can use, PER REGISTERED CHILD, is one year’s tuition at a participating school, spread over four years.

Example of Option 1

Age 401(k)/403(b) Account

Balance 5% Award

SAGE Scholar Balance (Balance does not accrue interest)

Award for registering child 500

12 $50,000 2,500 3,000 13 $55,500 2,775 5,775 14 $61,385 3,069 8,844

15 $67,682 3,384 12,228 16 $74,420 3,721 15,949 17 $81,629 4,081 20,030

To illustrate how the program helps pay for a child or grandchild’s college education; assume a 12 year old in a family where the employee has $50,000 in the 401k or 403b, assume an annual contribution of $2,000 into the Plan and a hypothetical 7% investment return.

(Monies in a 401k or 403b do not have a guaranteed return and can actually lose money)

In this example, if the child attends a participating SAGE school, the tuition will be reduced by 20,030 reward points with each point being equal to $1. Imagine the benefit when the College

Tuition Benefit is offered to the employee with very young children.

Example of Option 2To illustrate how the program helps pay for a child or grandchild’s college education; assume a 12 year old in a family where the employee works until the child reaches age 18.

In this example, if the child attends a participating SAGE school, the tuition will be reduced by 7,500 with each point being equal to $1. Imagine the benefit

when an employee starts participating when the child is young.

Age Annual Reward SAGE Scholar BalanceBalance does not accrue

interest

Reward for registering a Student 1,000

Reward in Student’s Name 500

12 1,000 2,500

13 1,000 3,500

14 1,000 4,500

15 1,000 5,500

16 1,000 6,500

17 1,000 7,500

Why Do Colleges Participate?

• Four Facts about College Finances– 2008 was the toughest year to get into College,

fewer and fewer 18 years olds – surplus capacity for the foreseeable future.

– Children who come from families with a job and save money are 430% more generous back to their Alma Mata than the average student – A way to build the college’s endowment.

– Our Student list is free to participating Colleges.– Our Colleges report entering students have

higher test scores and higher grades while attending.

– We are a better place to find better students.

Some Participating Colleges

Rollins University Drexel University St. Lawrence University

Colby-Sawyer College Clarkson University University of Dayton

University of San Diego

John Carroll University Rensselaer Polytechnic Institute

Worcester Polytechnic University

Ohio Wesleyan Creighton University

Beloit College Embry Riddle Aeronautical Institute

Chaminade University

Rollins College Whittier College University of Dayton

Messiah College Salve Regina Duquesne University

275+ Colleges and Universities in 39 states

60% of participating colleges are ranked by U.S. News & World Report

as “America’s Best Colleges”

Other Important Things To know• SAGE network of colleges has been around for over a decade and is used by PA

and WI to enhance their 529 plans - credibility.

• Over 200,000 students are registered.

• Employees do not have to purchase Worksite product to receive Scholarship awards.

• CTB does not affect the 401k or 403(b) investments in any way – no change in Investment advisor.

• Account balances are awards like frequent flyer miles and have No Cash Value.

• Account balances are portable, but do not grow after an employee leaves the employer.

• Students must be registered before completion of 10th grade to be eligible to use awards at a participating school. Employees can register children, grandchildren, nieces and nephews.

• Tuition Rewards are held in the employees name until Junior year when they are pledged to a registered student. No selection of colleges ahead of time.

• CTB is offered through First Benefits LLC. First Benefits is a joint venture with SAGE Scholars.

Typical Voluntary Benefit Offerings• We work with the employer and recommend that

youprovide Colonial Voluntary Benefit’s. These choices compliment and enhance the employer’s core benefit plan.

These benefits are less expensive and have simpler underwriting than individual coverage available outside the workplace.

– Short Term Disability– Long Term Disability– Term, Universal, and Whole Life– Accident Plans– Cancer Plans– Critical Illness– Hospital Indemnity– Long Term Care

Directed Uses Of Voluntary Benefits

• Rising Healthcare costs – “Gap” and Medical Indemnity coverage that reimburses deductibles and Coinsurance.

• Earned Time Off benefits vary by employee or don’t exist- Short Term Disability.

• Wellness Campaign – Critical Illness Benefits that make cash payments to employees for Wellness Exams

• Concern about Retiree Expenses – Critical Illness Benefits that are carried into retirement.

• Concern about Long Term Care – Universal Life with LTC rider and Critical Illness Benefits.

• Rising Worker Compensation Claims among certain classes of employees – Accident Insurance and Hospital Indemnity plans