DEFINED CONTRIBUTION DELEGATED SOLUTIONS ALLOWING YOU TO FOCUS ON STRATEGIC ISSUES

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1 DEFINED CONTRIBUTION DELEGATED SOLUTIONS ALLOWING YOU TO FOCUS ON STRATEGIC ISSUES TALK TO US TODAY TO FIND OUT HOW WE CAN GIVE YOU THE ADVANTAGE OF TIME WELL SPENT Contact: Liana Magner Visit

2 MERCER CAN HELP YOU INVEST YOUR TIME WISELY... The governance of a DC plan has taken on greater significance as plan sponsors work toward securing appropriate retirement outcomes for participants. Mercer understands that some plan sponsors may have limited time and resources to keep up with the demands and challenges of a complex marketplace, stay abreast of investments trends, manage regulatory filings and administrative burdens, and respond to heightened scrutiny by participants, among other responsibilities. With the delegated solution, plan sponsors are able to mitigate fiduciary risk and have more time to focus on strategic issues by allowing Mercer to take care of the implementation. AND REAP THE BENEFITS BUYING POWER/COST SAVINGS COMPREHENSIVE GOVERNANCE SUPPORT CUSTOMIZED SOLUTIONS Time IMPROVE PARTICIPANT PERFORMANCE MITIGATE FIDUCIARY RISK POTENTIAL FOR INCREASED DIVERSIFICATION ACCESS TO HIGH QUALITY, INSTITUTIONAL INVESTMENT MANAGERS

3 CHOOSE THE RIGHT GOVERNANCE STRUCTURE FOR YOUR DC PLAN In a delegated approach, a third party such as Mercer acts as a fiduciary and investment manager as defined by ERISA 3(38). Plan fiduciaries delegate or share responsibility for selection, termination, and monitoring of fund managers and strategies, and may also participate in portfolio construction and asset allocation within custom funds. Additional vendor oversight, operational, and implementation support may also be provided to sponsors. STRATEGY Define objectives/plan design Set policies (IPS fees) Define investment structure IMPLEMENTATION Manager selection Manager termination Coordination of manager and RK transition Contract and fee negotiation Liquidity management/rebalancing EVALUATION Performance monitoring Manager and recordkeeper monitoring Compliance oversight CLIENT 3(21) RESPONSIBILITIES DELEGATED DC SOLUTIONS CLIENT MERCER

4 CASE IN POINT CLIENT SITUATION Fortune 100 company has grown rapidly through acquisition; $2.1B in 401(k) assets. General feeling they had outgrown their investment advisor and could do more to drive down costs. 10 investment options with style specific equity options offered across the capitalization spectrum. Desire to lower risk to the organization by employing more comprehensive governance model. Client operates with a lean staff Staff has limited DC expertise and bandwidth for new initiatives. Decision to outsource driven by desire to be more proactive with DC strategy, to shed more of the fiduciary burden, and obtain increased governance support. MERCER SOLUTION Mercer assessed current DC infrastructure and providers including recordkeeper, custodian, and trustee in light of desired investment changes. Mercer assumed discretion for investment decisions including manager selection, monitoring, termination and replacement of all managers. Mercer created four custom, multimanager investment options. Mercer provides investment expertise and makes timely and informed decisions. Mercer responsible for the design and production of quarterly, client-branded fund fact sheets. Mercer responsible for ongoing vendor oversight. Client retains decision-making authority over investment structure and administrative decisions. RESULTS Implemented new investment line-up including four custom multi-manager options. Reduced investment management and operating fees by $2.2 million per annum. Enhanced governance structure/support. This case study is an illustration of Mercer s capabilities provided to an individual client. Client results may vary and there can be no guarantee of similar results. Reduced fees may be attributed to other factors besides Mercer s buying power including asset allocations to lower fee asset classes or passive management. It is not known whether the client approves or disapproves of our services.

5 THE MERCER ADVANTAGE $103 BILLION IN TOTAL DELEGATED ASSETS UNDER MANAGEMENT 200+ INVESTMENT RETAINER DC CLIENTS 40+ YEARS OF WORKING WITH DC PLANS 120+ MANAGER RESEARCH STAFF $40 BILLION IN DELEGATED DC ASSETS UNDER MANAGEMENT Mercer has consulted to DC plan sponsors on strategy, design, structure, investment manager research, benchmarking, and implementation. We have the expertise, experience, and resources to provide you the solutions that fit your needs. INVESTMENT EXPERTISE Disciplined decision-making based on investment policy and agreed-upon portfolio structure. COMPREHENSIVE OUTSOURCING Expanded delegation to include committee support, vendor management, and regulatory oversight. INVESTMENT BUYING POWER Potentially lower investment fees through access to Mercer s negotiated investment relationships. CUSTOM FUNDS Opportunity to leverage existing investment relationships to create customized institutional investment vehicles. PORTFOLIO EXECUTION Dedicated portfolio managers, operations, and service team. Global figures as of June 2014, including worldwide assets under management across Mercer s investment consulting and fiduciary management business.

6 OUR DELEGATED SERVICES INCLUDE: Investment policy review and design. Custom target-date fund constructionasset allocation and glide path management. Fund lineup structure review. Investment manager/fund option selection, termination, and transition. Performance evaluation and risk monitoring. Custom white-label multimanager fund option construction and monitoring. Stable value selection, management, and contract evaluation. Governance accountability review and documentation. Plan design and benefit adequacy consulting. Committee services setting agenda content and recording minutes. Regulatory environment updates. Recordkeeping/administration oversight including fee benchmarking. Third-party investment advisory services provider oversight. Compliance services. WE BRING OUR RICH HERITAGE IN CONSULTING, RESEARCH, AND IMPLEMENTATION TO BEAR WHEN WORKING FOR YOU. To find out more about how Mercer can help, contact: Liana Magner Visit us at References to Mercer shall be construed to include Mercer LLC and/or its associated companies Mercer LLC. All rights reserved.