INVESTMENT MANAGER PROPOSAL

Transcription

1 INVESTMENT MANAGER PROPOSAL Medical Diagnostic Imaging Group (MDIG) 3525 N Causeway Blvd. Suite 633, Metairie, LA Office: Fax: info@fplcapital.com

2 INVESTMENT MANAGER PROPOSAL Table of Contents Scope of ERISA Fiduciary Services Provided 1 Participant-Directed Account (PDA) 5 Self-Directed Brokerage Account (SDBA) Optional 6 Cash Balance Plan 7 Fees 9 Contact Information 10 Company Information 10 Appendices 11

3 Scope of ERISA Fiduciary Services Provided PARTICIPANT EDUCATION We recognize the importance of an informed and a knowledgeable Participant. Vanguard provides an Education Resource Center for Plan Participants which can be accessed through the Participant login (at My.VanguardPlan.com) or accessed directly at Vanguard.com/ResourceCenter. In addition to the Vangaurd Education Resource Center, we offer a comprehensive array of tools and services for Participants to access through our online Wealth Management Portal (powered by Fidelity s emoney Advisor). Our portal features self-service tools, such as workshops, budget monitoring, financial planning, retirement goal setting/monitoring, account aggregation, and educational resources. Participants may also utilize our Wealth Management consulting service at an additional fee of $150/hour. PARTICIPANT RISK EVALUATIONS We assess the Participant s risk-tolerance through our Risk-Tolerance Questionnaire, a scientifically validated questionnaire backed by academic research to determine a Participant s risk profile. The Risk Profile Score and their responses to each question on the Questionnaire provides insight into how the Participant views and reacts to different financial and capital market scenarios. INVESTMENT POLICY STATEMENT (IPS) Each Plan Participant will receive an Investment Policy Statement that provides the following: Outlines the investment of assets Identifies target asset allocations Defines management policies applicable (See Appendix A for Investment Policy Statement sample) PLAN MONITORING AND MANAGEMENT To eliminate any inaccuracies and discrepancies, Plan and Participant accounts are monitored on a weekly basis. Recordkeeper will allocate contributions for each account according to investments and percentages set forth by the Plan. PLAN REPORTING AND STATEMENTS Quarterly statements are provided by the Recordkeeper and provide each Participant with an account overview, contribution summary, vested balances, asset allocation, list of portfolio holdings, and investment performance. Page 1

4 THIRD-PARTY ADMINISTRATORS Third Party Administrators (TPA s) are utilized to administer the Plan. Plan has elected to maintain their existing TPA relationship (Pension Admin). TPA services generally include, but are not limited to the following: Amending and restating plan documents Preparing employer and employee benefit statements Assisting in processing all types of distributions from the plan Preparing loan paperwork for plan participant Testing the plan each year to gauge its compliance with all IRS non-discrimination requirements as well as plan and participant contribution limits Allocation of employer contributions and forfeitures Calculating participant vested percentages Preparing annual returns and reports required by IRS, DOL or other government agencies Form 5500 preparation 402(g) Annual Deferral Limit testing 40(a)(17) Annual Compensation testing 415 Annual Additions testing 410(b) Coverage testing 401(k)/401(m) Average Deferral Percentage/Average Contributions Percentage testing Provided list features general services provided by most TPA s. Please consult with Pension Admin regarding specific services provided. Page 2

5 RECORDKEEPERS Recordkeepers play a significant role in our relationship with the Plan Sponsor and its Participants. The Plan has elected Vanguard, administered through Ascensus, as the Recordkeeper for the Plan. Recordkeepers generally provides the following services: Daily Valuations of Participant accounts Eligibility calculations Automated investment election changes for Participants Automated investment exchanges Contribution allocations for salary deferrals, rollovers, and employer contributions Contribution and loan repayment processing Forfeiture allocations Delivery of Participant quarterly statements Company reports made available to the Employer Preparation of IRS Forms 1099-R and 945 Online accessibility for Plan Administrator and Participants 24-hour interactive voice response line for Participants Participant Service Center (8:00 AM to 8:00 PM EST Monday Friday) Online accessibility to fund prospectuses and fact sheets Enrollment materials to Employer Distribution request processing Online access to sample ERISA Section 404(a)(5) participant fee disclosure documents For a detailed list of services Vanguard provides, please refer to the Vanguard Proposal. The Recordkeeper will implement the investment management program for the Plan set forth by FPL Capital Management. FPL Capital Management will provide the funds and Model Portfolios selected to the Recordkeeper. Selected funds and Model Portfolios will be made available online to the Participants through the Recordkeeper s site dedicated to Participants (My.VanguardPlan.com). CUSTODIANS The custodian for the Plan is Ascensus. Vanguard has elected Ascensus to service all Small Business Retirement Plans (plans with less than $25M). Ascensus is the nation s largest independent retirement service provider with over $140 billion in assets under administration. The plan may select Fidelity, Schwab, or TD Ameritrade as the custodian for the Pooled-Asset Cash Balance Plan. Page 3

6 AVAILABLE INVESTMENT OPTIONS FPL Capital Management has carefully selected a list of investments for the Plan Participants. The investment selection features low-cost, high quality funds from DFA (Dimensional), Vanguard, and AQR. Appendix B provides a list of the available funds. Additionally, Participants will also have the option of selecting a Model Portfolio (See Appendix C). Models have been constructed to accommodate all levels of risk tolerance from conservative to ultra-aggressive. Page 4

7 Participant-Directed Account (PDA) Upon the creation of the Plan, each Participant will have access to his or her own Participant-Directed Account. Within the account, each Participant may choose from a list of funds to create their own portfolio, or simply choose from one of the Model Portfolios created specifically for the Plan. Model Portfolios are recommended for Participants that may not fully understand capital markets. FPL Capital Management will assist Participants through the investment selection process. First, Participants will complete a Risk-Tolerance Questionnaire, which can be found on the dedicated Participant website ( Based on Participant s Risk-Tolerance Score, age, and financial lifecycle, one of the Model Portfolios will be recommended. For example, a 50-year old Participant that has stable income who scores a 70 on the Risk-Tolerance Questionnaire will likely be recommended the DFA Target 70 Model Portfolio. See Appendix A and B for a list of available investment options and Model Portfolios. Participants may choose to manage their own Participant-Direct Accounts. However, FPL Capital Management will not provide consulting to those who choose to manage the accounts themselves. They will also be required to sign our waiver/disclosure documents relieving FPL Capital Management of any fiduciary responsibility. Page 5

8 Self-Directed Brokerage Account (SDBA) Optional Each Participant in the Plan is eligible to open a Self-Directed Brokerage Account at Schwab, Fidelity, or TD Ameritrade. SDBAs are subject to the following additional fees: One-time, setup fee of $150 per Participant Recordkeeper annual fee of $50 SDBAs can be established at any of the following custodians: Schwab, Fidelity, or TD Ameritrade Participant may choose to manage his or her SDBA (requires signing waiver/disclosure documents) Annual fee for FPL Capital Management to manage a Participant s SDBA will range between $1,000 and $5,000 depending on desired level of service (See Appendix D for our Advisory Fee Schedule). A level 1 client s fee is $1,000 per year. If a Participant would like to create a customized portfolio or include other personal account/assets, then they would need to upgrade to Level 2 or Level 3. All SDBA fees can be paid directly from the Participant. The Plan does not need to be responsible for SDBA fees. AVAILABLE INVESTMENTS Participant may select one of our Model Portfolios or choose to customize his or her portfolios by utilizing the wide range of investment products offered on Schwab, Fidelity, and TD Ameritrade s Institutional platforms. The available Model Portfolios are as follows: Target 10 Target 20 Target 30 Target 40 Target 50 Target 60 Target 70 Target 80 Target 90 Target 100 DFA Fixed Income DFA Global Equity DFA US Equity DFA International Equity ETF Fixed Income ETF US Equally Weighted US Dividend Equity WisdomTree Global Equity WisdomTree US Equity WisdomTree International Equity PIMCO Fixed Income Diversified Fixed Income AQR Low-Beta Vanguard Global Equity Vanguard US Equity Vanguard International Equity Page 6

9 INVESTMENT MANAGER PROPOSAL For more information on our Model Portfolios, please visit our website ( Please note that not all Model Portfolios are available on the Participant-Directed Platform. See Appendix E for a comparison of a Model available on Participant-Directed Platform vs. Self-Directed Brokerage Platform. ADDITIONAL AVAILABLE INVESTMENTS PRIVATE FUNDS Most retirement plans strictly invest in various forms of publicly traded capital market investments such as stocks, bonds, mutual funds, and ETF s. We believe that individual investors should not be denied access to other forms of investments that are accessible to institutional investors. We allow and oversee investments in Private Funds. These include: Private Equity Funds Private Credit/Debt Funds Private Equity Real Estate Funds Typically, these funds have minimum investment requirements ranging from $2 million to $10 million. For this reason, they are usually not accessible to individual investors and are only utilized by larger pooledasset pension plans and endowments. However, FPL Capital Management has arrangement for its clients to access these funds at significantly lower minimums. In some cases, as low as $50,000. Page 6

10 INVESTMENT MANAGER PROPOSAL Cash Balance Plan Cash Balance Plan is a pool-asset plan that can be managed at any of the following custodians: Charles Schwab Fidelity TD Ameritrade We will meet with investment committee to discuss and implement an Investment Policy Statement according to the parameters set forth in the Plan document. The selected portfolio may be fully customized to meet the requirements set by the Plan. AVAILABLE INVESTMENTS Plan also may use one of our existing Model Portfolios to customize. The available Model Portfolios are as follows: Target 10 Target 20 Target 30 Target 40 Target 50 Target 60 Target 70 Target 80 Target 90 Target 100 DFA Fixed Income DFA Global Equity DFA US Equity DFA International Equity ETF Fixed Income ETF US Equally Weighted US Dividend Equity WisdomTree Global Equity WisdomTree US Equity WisdomTree International Equity PIMCO Fixed Income Diversified Fixed Income AQR Low-Beta Vanguard Global Equity Vanguard US Equity Vanguard International Equity For more information on our Model Portfolios, please visit our website ( Page 7

11 Fees PLAN ADVISORY FEES CHARGED BY FPL CAPITAL MANAGEMENT (BASED ON 100 PARTICIPANTS) The Annual Retirement Plan Advisory Fee is $21,500, based on 100 Participant-Directed Accounts. The Advisory fee consists of an annual fee of $500 per Participant for the first five accounts. Then the Participant fee reduces to $200 for each additional account. In addition to the Annual Advisory Fee, there is an one-time setup fee of up to $5,000. The Annual Retirement Plan Advisory Fee for managing the Plan s Cash Balance Plan is $2,500. There is also an additional, one-time account setup fee of up to $1,000. In addition to the Advisory and account setup fees, the Cash Balance Plan may be subject to transaction fees associated with the purchase and/or sale of securities in the account. Please refer to the Custodian Comparison Chart (Appendix F) for more information regarding transaction fees. If the Plan or its Participants elect to create Self-Directed Brokerage Accounts, these fees will vary. RECORDKEEPER FEES CHARGED BY VANGUARD (BASED ON 100 PARTICIPANTS) The Annual Recordkeeping Fee for 100 Participant-Directed Accounts is $7,992. There is also an additional, one-time setup fee of up to $850. Please see Vanguard Recordkeeper Proposal for more details. THIRD-PARTY ADMINISTRATOR FEES CHARGED BY PENSION ADMIN MDIG has an existing relationship with Pension Admin. Fees have not been disclosed to us for the purposes of this Proposal. CUSTODIAN FEES Custodian fees only apply to the Cash Balance Plan. Fees will vary depending on the custodian of choice. Please see our Custodian Comparison for more details. Fee Summary FPLCM Advisory Fee Vanguard Recordkeeper Fee Pension Admin TPA Fee Custodian Fee 401(k)/PS Plan $21,500 $7,992 N/A Varies CB Plan $2,500 N/A N/A Varies Total $24,000 $7,992 N/A Varies Page 9

12 Contact Information MICHAEL GEORGE MANAGING DIRECTOR VIRAJITH WIJEWEERA DIRECTOR OF TRADING & OPERATIONS AMANDA HARRELL DIRECTOR OF CLIENT SERVICE & DEVELOPMENT Tel (504) Tel (504) Tel (504) Company Information FPL Capital Management, LLC 3525 N. Causeway Blvd, Suite 633 Metairie, LA Tel (504) Fax (504) Page 10

13 Appendix A Sample Investment Policy Statement Based on the participant s age (45), investment time horizon (6-10 years) and Personal Risk Profile Score (55), the following model has been recommended: DFA TARGET 100 Fund Ticker Allocation DFA US Large Company DFUSX 20.00% DFA US Large Value DFLVX 20.00% DFA US Targeted Value DFFVX 20.00% DFA International Value DFIVX 10.00% DFA International Small Company DFISX 5.00% DFA International Small Value DISVX 5.00% DFA Emerging Markets DFEMX 3.00% DFA Emerging Markets Value DFEVX 3.00% DFA Emerging Markets Small DEMSX 4.00% DFA Global Real Estate DFGEX 10.00% By signing below, you acknowledge that FPL Capital Management has provided you with a recommendation suitable for your investment objectives and risk tolerance profile. PARTICIPANT Name: Participant Signature: Date: Page 11

14 Appendix B Fund Lineup DFA Mutual Funds Selected DFA Funds that will be available on the 401(k) platform DFA U.S. Equity Funds Fund Name Ticker Fund Class Expense Ratio DFA US Large Company DFUSX Institutional Class Shares 0.09% DFA US Large Value DFLVX Institutional Class Shares 0.27% DFA US Large Growth DUSLX Institutional Class Shares 0.20% DFA US Targeted Value DFFVX Institutional Class Shares 0.37% DFA US Small Cap DFSTX Institutional Class Shares 0.37% DFA US Small Cap Value DFSVX Institutional Class Shares 0.52% DFA US Smal Cap Growth DSCGX Institutional Class Shares 0.40% DFA Internationl and Emerging Markets Equity Funds DFA International Value DFIVX Institutional Class Shares 0.43% DFA International Large Cap Growth DILRX Institutional Class Shares 0.30% DFA International Small Cap DFISX Institutional Class Shares 0.53% DFA International Small Cap Value DISVX Institutional Class Shares 0.69% DFA International Small Cap Growth DISMX Institutional Class Shares 0.55% DFA Emerging Markets DFEMX Institutional Class Shares 0.57% DFA Emerging Markets Value DFEVX Institutional Class Shares 0.57% DFA Emerging Markets Small Cap DEMSX Institutional Class Shares 0.75% DFA Global Equity Funds DFA Global Equity DGEIX Institutional Class Shares 0.31% DFA Global 60/40 Allocation DGSIX Institutional Class Shares 0.29% DFA Global Real Estate DFGEX Institutional Class Shares 0.27% DFA Fixed Income Funds DFA Short-Term Government DFFGX Institutional Class Shares 0.19% DFA Five-Year Global DFGBX Institutional Class Shares 0.28% DFA Short-Term Extended Quality DFEQX Institutional Class Shares 0.22% DFA Investment Grade DFAPX Institutional Class Shares 0.22% Page 12

15 Appendix B Continued Vanguard Funds Selected Vanguard Funds that will be available on the 401(k) platform Vanguard US Equity Funds Fund Name Ticker Fund Class Expense Ratio Vanguard Dividend Apreciation Index VDADX Admiral Class Shares 0.10% Vanguard 500 Index VFIAX Admiral Class Shares 0.04% Vanguard Value Index VVIAX Admiral Class Shares 0.09% Vanguard Growth Index VIGAX Admiral Class Shares 0.06% Vanguard Mid Cap Index VIMAX Admiral Class Shares 0.06% Vanguard Mid Cap Value Index VMVAX Admiral Class Shares 0.09% Vanguard Small Cap Index VSMAX Admiral Class Shares 0.06% Vanguard Small Cap Value Index VSIAX Admiral Class Shares 0.07% Vanguard REIT Index VGSLX Admiral Class Shares 0.12% Vanguard Internationl and Emerging Markets Equity Funds Vanguard Developed Markets Index VTMGX Admiral Class Sharess 0.07% Vanguard International Explorer VINEX Investor Class Shares 0.41% Vanguard International Value Portfolio VTRIX Investor Class Shares 0.43% Vanguard Emerging Markets Stock Index VEMAX Admiral Class Sharess 0.14% Vanguard Fixed Income Funds Vanguard Short Term Invesment Grade VFSTX Admiral Class Shares 0.20% Vanguard Intermediate Term Treasury VFIUX Admiral Class Shares 0.10% Vanguard Intermediate Term Investment Grade VFIDX Admiral Class Shares 0.10% Vanguard Intermediate Term Bond Index VBIIX Investor Class Shares 0.15% Vanguard High Yield Corporate VWEAX Admiral Class Shares 0.13% Vanguard Core Funds Vanguard Total International Bond Index VTABX Admiral Class Shares 0.12% Vanguard Total Bond Index VBTLX Admiral Class Shares 0.05% Vanguard Total International Stock Market Index VTIAX Admiral Class Shares 0.11% Vanguard Total Stock Market Index VTSAX Admiral Class Shares 0.04% Page 13

16 Appendix B Continued AQR Funds Selected AQR Funds that will be available on the 401(k) platform AQR Equity Funds Fund Name Ticker Fund Class Expense Ratio AQR Large Cap Multi-Style QCELX Institutional Class Shares 0.54% AQR Small Cap Multi-Style QSMLX Institutional Class Shares 0.75% AQR International Multi-Style QICLX Institutional Class Shares 0.70% AQR Emerging Markets Multi-Style QEELX Institutional Class Shares 0.85% AQR Total Return Funds AQR Long/Short Equity QLEIX Institutional Class Shares 1.30% Page 14

17 Appendix C Model Portfolio Lineup FPL Capital Management Model Portfolios selected for your 401(k) Plan DFA Target Equity Models DFA Equity 100 DFA Equity 80 DFA Equity 70 DFA Equity 60 DFA Equity 50 DFA Equity 40 All Equity Models DFA Equity 100 DFA Global Equity Vanguard Diversified Equity Fixed Income Diversified Fixed Income Reduced Beta Models AQR Target 100 Page 15

18 Appendix D Advisory Fee Schedule Page 16

19 Appendix E Model Comparison for PDA vs. SDBA Participant-Directed Account Sample Model DFA Target Folio 70 Self-Directed Account Sample Model US Dividend Equity Fund Ticker Allocation Fund Ticker Allocation DFA Emerging Markets I DFEMX 2.10% WisdomeTree US Large Cap Dividend DLN 5.25% DFA Emerging Markets Small Cap I DEMSX 2.80% WisdomTree High Dividend ETF DHS 5.25% DFA Emerging Markets Value I DFEVX 2.10% WisdomTree US Mid Cap Dividend DON 7.00% DFA Five-Year Global Fixed-Income I DFGBX 7.50% WisdomTree US Small Cap Dividend DES 7.00% DFA Global Real Estate Securities Port DFGEX 7.00% Powershares S&P 500 HD LV SPHD 2.63% DFA International Small Cap Value I DISVX 3.50% Vanguard Dividend Appreciation VIG 2.63% DFA International Small Company I DFISX 3.50% FirstTrust NA Energy ETF EMLP 1.75% DFA International Value I DFIVX 7.00% Vanguard Real Estate VNQ 3.50% DFA One-Year Fixed-Income I DFIHX 7.50% DFA Global Equity DFA Short-Term Government I DFFGX 7.50% Fund Ticker Allocation DFA Two-Year Global Fixed-Income I DFGFX 7.50% DFA US Large Company DFUSX 5.25% DFA US Large Cap Value I DFLVX 14.00% DFA US Large Value DFLVX 5.25% DFA US Large Company I DFUSX 14.00% DFA US Targeted Value DFFVX 12.25% DFA US Targeted Value I DFFVX 14.00% DFA International Value DFIVX 3.15% DFA International Small Company DFISX 1.75% DFA International Small Value DISVX 1.75% DFA Emerging Markets DFEMX 1.05% DFA Emerging Markets Value DFEVX 1.05% DFA Emerging Markets Small DEMSX 1.75% DFA Global Real Estate DFGEX 1.75% AQR Low Beta Fund Ticker Allocation AQR Long/Short Equity QLEIX 4.00% AQR Equity Market Neutral QMNIX 3.00% AQR Style Premia Alternative QSPIX 3.00% Diversified Fixed Income Fund Ticker Allocation Pimco Total Return PTTRX 9.00% Pimco High Yield Spectrum PHSIX 3.00% Pimco Investment Grade Corporate PIGIX 3.00% Principal Preferred Securities PPSIX 3.00% Pimco Low Duration PTLDX 2.00% Page 17

20 Appendix F Custodian Comparison Chart Page 18