Private Equity Consolidator (PEC) Presented By: Dan Aceti

Transcription

1 Private Equity Consolidator (PEC) Presented By: Dan Aceti

2 Supplemental Disability Offer Permanent and Portable High Quality IDI Coverage Guaranteed Standard Issue 20% Premium Discount off of Unisex Rates One page app / 5 questions No minimum participation requirement (for voluntary offers) Customizable plan design for each Firm

3 The PEC Plan - The Offer Option 1: 75% replacement less the LTD to a max of $7,500/mo GSI Premium is Employee paid Option 2: 75% replacement less the LTD to a max of $10,000/mo GSI Premium would be Employer Paid Option 3: Combination of Employer and Employee Paid Total Replacement Ratio will be 65% if the underlying GLTD provides for a tax free benefit at claim. All offers assume complete census and enrollment access provided.

4 The PEC Plan Option 1 Example $280,000/ year Income Option 2 Example $320,000/ year Income Examples assume a GLTD plan of 60% to $10k per month. 4

5 GSI Offer - Voluntary Plan Limits PEC offer vs Industry Standard * Typically need 3 to 4 times this in eligible lives in order to meet participation requirements. 5

6 Initial Results 20 cases Over 1,600 written lives Over $1,300,0000 of premium 30% average participation

7 Private Equity Categories Specialize by Sector Controlling Interest or less Unique introduction to the Portfolio Companies (PortCos) Driving Savings is a primary objective

8 Private Equity Firm LTD Risk Transfer

9 Risk Transfer What is it? Tactic to reduce the spend for company provided disability protection while maintaining benefit levels Integrated Individual Disability Insurance (IDI) with a group LTD plan. When it works, the results can be very positive: Immediate and Future Cost savings Reduced rate volatility Improved benefits

10 Percentage of Income Replaced Group LTD Risk Transfer - How does it work? The illustration below shows a Group LTD plan moving from a High Limit Group LTD plan to an integrated plan with IDI. 70% 60% 50% 40% 30% 20% 10% 60% to $20k/mo 60% to $10k/mo 60% to $10k/mo Integrated coverage provides a benefit equal to 60% to a combined maximum of $20,000 / month. 0% Current LTD Plan Integrated LTD/ IDI Plan Group LTD IDI

11 Group LTD Risk Transfer - Why does it work? Transfer of Risk Rate Stability GLTD plan is more marketable Value Added Long Term Solution

12 Coverage Analysis Chart Income Plan assumes: GLTD is 60% to $10,000, ER Paid IDI is 60% to $10k and Buy Up IDI is 75% to $5k 1) LTD Coverage Cap reduced from $400k to $200k due to Risk Transfer. $200,000 $400,000

13 Case Study Company Profile Financial Services Industry 18,000+ Employees Employer Paid Group LTD Plan: 60% to a max benefit of $20k/month Plan Design Objectives Reduce cost To minimize risk volatility in the Group LTD plan Provide a stronger benefit for executives 13

14 Case Study - Continued Current GLTD Plan Design 60% to a Maximum $20,000/mo Risk Transfer Approach GLTD decreases to 60% to $10,000/mo + IDI at 60% to $10,000/mo. Combined Maximum 60% to $20,000/mo Group LTD: Volume / Rates Coverage Current Monthly Payroll Volume Current LTD Rate Monthly Payroll Volume Risk Transfer LTD Rate LTD $112,572, $110,132, Alternative Plan Design Annual Cost Coverage Current LTD Premium Annual Spend LTD Cost $4,052,613 $3,171,813 IDI Cost 0 $399,011 Total ER Cost $4,052,613 $3,570,824 Annual Premium Savings $481,789 14

15 International Benefits Presented By: Bill Folan

16 NFP s Global Benefit Services Background For most of our history, our focus has been exclusively on U.S. Fortune 1000 companies Nearly one-third of our nonqualified deferred compensation clients were financial services companies: More complex types of compensation deferred (awards, commissions, bonuses) More financially sophisticated plan participants pushed service levels Plan sponsors included U.S. subsidiaries of 3 German banks and one French bank. These complex plans were set up mainly for an American workforce, included 401(k) features, and based in the United States.

17 NFP s Global Benefit Services Clients Influence System Development We have always tried to be on the leading edge of NQ benefit administration. However, much of our innovation is in response and in collaboration with specific clients needs. The catalyst for developing our global plan capabilities was an existing/prior client s needs: Established client service relationship, which allowed collaboration on new system History of unique admin meant clients comfortable with new system development Agile, focused staff that could respond quickly to requests and changes.

18 NFP s Global Benefit Services Clients Influence System Development Similar to SERPs and NQDC plans in purpose, but more complex reporting, valuation and stakeholders Complexities raised the bar for choosing technologies, creating reporting modules and finding staff. The result of building for multiple plans/multiple clients was a flexible solution that can be re-sold to like-stature employers.

19 Continually Adapting to Different Designs Plan Designs Global Retirement Plans Target Amount DB Plans Voluntary Deferred Employee Compensation Carried Interest Plans NFP System s flexibility allows it to administer Carried Interest Plans These plans provide share of profits that the partners of organizations like private equity and hedge funds receive as to motivate the partner (e.g., fund manager) to work toward improving the fund's performance. Traditionally, the amount of carried interest is around 20-25% of the fund's annual profit.

20 NFP Story Current Global Admin Chapter Today, NFP s international benefits group reliably manages: Both U.S. based and non-u.s. based benefit plans Thousands of secure, personal account holders 100+ distinct global deferral plans and carried interest plans Plans and participants based on five continents and 40+ countries. Clients in Consumer Products, Electronics, Financial Services, Hospitality, Staffing, and more. NFP addressing issues such as workforce mobility, multiple currencies, multiple jurisdictions, etc.

21 NFP Global Administration System Distinguishing NFP as Global Plan Specialists NFP s international benefit group has the staff and technology to support NFP corporate clients that sponsor these special plan designs with: separate jurisdictions and rules, distinct valuation procedures, various currencies that are exchanged and displayed instantaneously, payroll feeds from different countries, off-shore trusts.

22 NFP can accommodate any employee status Distinguishing NFP as Global Plan Specialists And for employees (and independent contractors) who are U.S. citizens, U.S. green card holders, and U.S. residents, non-u.s. expatriates, globally mobile employees, international assignees, third-country, nationals and local nationals Global Mobile Employees Non-US Expatriates US Citizens Global Retirement Plan Platform International Assignees Local Nationals (Jurisdictional Plan) Third Country Nationals (TCN)

23 Certified Global System Special Reporting We accommodate country-specific plans requiring the valuation of funds from worldwide markets with underlying investments, trusts, nominees, custodians and currency exchange requirements for contributions, valuations, special distributions and other unique processes.

24 Certified Global System International Standards NFP s administration system is SAS 70 / SSAE 16 Type II (domestic) certified and ISAE 3402 (global) certified International Standards for Assurance Engagements (ISAE) No audits are internationally recognized auditing standards developed by the American Institute of Certified Public Accountants (AICPA). These designations represent that our service organization conducts in-depth audits of control activities, which generally include controls over information technology and related processes

25 New Sales and Ongoing Revenue Opportunities Larger global clients willing to pay substantial annual fees for complex, global administration Typically $100,000 to $300,000 but can be significantly more depending on scope of services required Revenue sharing is negotiated on a case-by-case basis Ability to offer global admin opens doors for traditional opportunities: Commissions for COLI funding on U.S. plans Commissions for insurance benefits in global plans

26 New Sales and Ongoing Revenue Questions and Comments