You Really CAN Offer Retirement Planning Advice to Your Participants

Transcription

1 You Really CAN Offer Retirement Planning Advice to Your Participants

2 URS Member Demographics 209,000 members 105,000 currently active/working 48,000 saving voluntarily Average balance ~$25,000 60,000 retired $27 billion in pension assets $4.6 billion in DC plan assets

3 Tier 1 Tier 2 401k 457 Traditional IRA Roth IRA Exempt from ERISA URS Plan Offerings

4 Advice History at URS General education Many investment and plan choices Advice available only outside the system Members unsure of retirement preparedness High level of trust in URS

5 Guidance Target risk funds through 2014 Target date funds in 2015 Online calculators Pre-retirement seminars Developed relationship with State Securities Division

6 Advice Proposal in 2014 Internal approval: senior management Regulatory issues Liability & competitive concerns Member benefits Employee benefits Process, training and costs

7 No-Action Letter State Securities Division Standardized asset allocations Prudent, reasonable advice No change in employee compensation Non-URS investments excluded from advice Available online at Securities Division website

8 Developing the Process Written internal polices covering investment advice Dialogue for consistency Recommendations Risk tolerance Goals Asset allocation, fund recommendations

9 Investor Profile Questionnaire Boston Research Technologies Customized questions and scoring for URS member demographics All members complete one in order to receive advice Conservative to aggressive profile

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11 Warren Cormier, CEO Boston Research Technologies (BRT) Cofounder RAND Behavioral Finance Forum Office: (415)

12 Developing the Process Written internal polices covering retirement advice Dialogue for consistency Pension payout options Partial lump sum Tier 2 choice 401k versus 457 versus Roth How much to save

13 Areas Not Covered Schwab account/brokerage window Non-URS accounts

14 3 Key Levers 1. Save more 2. Delay retirement date 3. Change risk tolerance level

15 Fiduciary vs. Suitability ERISA exempt Best practice Proactive approach to limit liability 401k lawsuits 403b lawsuits

16 Advisor Training Series 65 Exam Optional: various retirement designations including CFP and CRC Advice process training (case studies) Ongoing continuing education Ongoing internal compliance reviews

17 Retirement Software Internal spreadsheet Pension Social Security DC plans URS calculators online Social Security quick calculator or benefit estimate statement Member database (store records) Online scheduler

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19 Appointment Process Sign up date/time online Take the investor profile questionnaire Coming soon: confirmation s

20 Session Evolution: March 2015 Started with 30- and 60-minute sessions 30-minutes covered a single topic (which payout option to select, Roth IRA or 401k, which fund should I choose) 60-minute comprehensive session Now Want to go How to get there

21 Typical Session Now one hour, all comprehensive Open to active and retired members Main office and on-site field appointments Primarily face-to-face sessions Data collection

22 Screenshot of member snapshot

23 Stats/Results Over 4,000 sessions since 3/15 86% very satisfied, 13% satisfied Staffing impact and costs (cars, equipment, etc.) Setting agency expectations Impact on non-urs investment providers

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25 Future Direction More DIY calculators and tools Financial wellness Ongoing member feedback for future improvements

26 Resources SOA s Investment and Retirement Advice: A Guide for Employers

27 Table discussion Current situation Dream (positives)

28 Brainstorm Obstacles to Implementation

29 Member Case Study Pension calc Savings calc Social security quick calc

30 Contact Info

31 You Really CAN Offer Retirement Planning Advice to Your Participants