BenchmarkDC. Objective. Independent. Actionable. Because what gets measured gets managed

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Tobias Potter
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1 BenchmarkDC Because what gets measured gets managed Objective Independent Actionable

- Anthony Abbott, Former Director, Benefit Investments, Georgia-Pacific Corporation Who We Are Since 1991, CEM Benchmarking has successfully distinguished itself as one of the most astute, skilled

2 CEM is the only true apples-to-apples performance database that I have encountered in my 20 years in the pension business. The depth and breadth of pension plan participation clearly shows CEM to be the performance benchmark of choice worldwide. - Anthony Abbott, Former Director, Benefit Investments, Georgia-Pacific Corporation Who We Are Since 1991, CEM Benchmarking has successfully distinguished itself as one of the most astute, skilled and sought-after independent benchmarking companies in the financial services industry. For over more than 20 years, we have established a successful track record for providing our clients with objective, actionable intelligence, empowering better-informed business decisions and paving the way for our clients continued improvement and growth. Benchmarking is our only business this exclusive focus has enabled us to become the industry leader in our field. Today, CEM Benchmarking serves more than 350 blue-chip corporate and government clients worldwide, including over 30 of the Fortune 100 companies, and has offices in Chicago, London and Toronto. Visit us at CEM don t try to manage a pension plan without it. The CEM comprehensive report tells us where we stand, how we can improve and gauges the effectiveness of our investment operation against a global set of peers. Christopher J. Ailman, Chief Investment Officer, California State Teachers Retirement System (CalSTRS)

3 You ve got your work cut out for you As a plan fiduciary, you ve got a number of important responsibilities and obligations with respect to the oversight of your organization s DC retirement plan. You re expected to act in the interest of plan participants and carry out your duties with skill, prudence and diligence. Part of that responsibility entails: Determining the cost-effectiveness of the plan, Assessing the quality of services provided, Selecting and monitoring plan-level investment options, Selecting and monitoring fiduciaries to the plan, and Making decisions about the retention, addition or replacement of service providers. CEM s DC and DB Investment Benchmarking reports are critical to our plan cost control efforts and are an important part of our plan fiduciary reviews. - Andrew Steiner, Assistant Treasurer, Investments, Motorola, Inc. Without a high quality basis for comparison with other plans in your size range, however, how can you be expected to make informed decisions that will serve the best interests of the plan and its participants? Particularly in today s quickly-changing regulatory landscape, plan fiduciaries have their work cut out for them. With the implementation of ERISA 408(b)(2) and 404(a)(5), more than ever, participants and the Department of Labor will be looking to you to demonstrate that you have fulfilled your fiduciary duties including properly documenting your decisions and the basis for those decisions. And, as you know, failure to deliver on any of these responsibilities can be extremely costly. Harnessing the power of information Imagine being able to see, at a glance, how every aspect of your plan stacks up against your peers. Imagine being able to know, with absolute certainty, how even the most minute aspects of your plan are performing relative to a custom peer group selected from the most comprehensive database available. Imagine how empowering it would be to have access to that kind of information. That s where we come in. For more than 20 years, CEM Benchmarking has been providing plan fiduciaries from many of the largest and most successful pension plans in the country with the data, insight and knowledge they need to help fulfill their responsibilities and make informed decisions on behalf of the plans they represent. CEM s annual survey provides us with relevant and thorough information about the cost structure of our DC Plan. To assist us in our fiduciary role we receive timely feedback on those areas where we should focus additional efforts, as well as confirmation of the duties we are performing well. - Chris Li, President and CIO, Lockheed Martin Investment Management Company Our BenchmarkDC report will help: Demonstrate and document that you re fulfilling your fiduciary duties, Provide you with an incredibly powerful decision-support tool, Open your eyes to new ideas to improve the plan, and Empower you like never before to negotiate with your service providers. And that s just the beginning

4 CEM benchmarking enables us to evaluate our 401(k) plan across a relevant peer universe, comparing our investment and administrative fees, design, and performance. CEM drills down into the important details as well as providing good summary analysis to facilitate communication to our board. - Kathleen Lutito, President and CIO, Centurylink Investment Management Demonstrate and document that you re fulfilling your fiduciary duties While being a plan fiduciary is an honor, it s a role that isn t without its risks. And against the backdrop of a changing regulatory landscape, those risks are more pronounced than ever before. BenchmarkDC was designed specifically for individuals with fiduciary oversight responsibilities. Your BenchmarkDC report provides you not only with the information you need to assess overall effectiveness of the plan; it s also the report in your file at the end of the year that helps demonstrate to key stakeholders that you ve fulfilled those obligations to the best of your ability. Your customized BenchmarkDC report will provide you with the information necessary to answer questions related to: The overall cost effectiveness of the plan, Whether you re paying too much for particular services, The effectiveness of the plan s investment options, plan services and plan design, Your fiduciary/governance arrangements. Our reports are incredibly comprehensive and provide peer-based and universe-based benchmarking to provide you with an unprecedented degree of insight into the inner workings of your plan and how it stacks up. The information highlighted in your BenchmarkDC report will: Identify areas you need to be concerned about, Give you the data you need to make informed decisions for the good of the plan and its participants

5 An incredibly powerful decision support tool The information and insights contained in your customized BenchmarkDC report will provide you with a powerful basis for making decisions regarding all aspects of the plan. With incredibly detailed data at both the plan and aggregate levels, it s like being able to focus on both the trees and the forest at the same time. Are you paying too much for specific plan options? Should you implement a post-enrollment education program? Does your plan design need refining? While other plans may be making these important decisions in isolation or based on guesstimates, with your BenchmarkDC report, you will be in a position to make plan-related decisions based on accurate, high quality data. Open your eyes to new ideas Another tangible benefit associated with access to this level and quality of benchmark data is the ability to gain insight into the best practices of your peers. In addition to empowering informed business decisions, the data contained in your BenchmarkDC report can help shine a spotlight on new ideas, trends and opportunities that can save costs, improve performance and otherwise improve the efficiency and effectiveness of the plan. For example, you ll see emerging trends in a wide range of areas such as the asset mix of target retirement date funds, or plan design features. Have better-informed conversations with your service providers Are you getting maximum value from your service providers? Your customized BenchmarkDC report provides you with a detailed snapshot of how your service providers rank across your entire peer group in terms of effectiveness, cost and overall value. Particularly with today s increased focus on fee transparency, this kind of irrefutable data can provide you with the justification you and your committee need to either stay the course or execute changes to your service providers, plan features, etc. The report is an extremely powerful tool to help you make informed decisions. For years, plan sponsors have been benchmarking their plans to help avoid the lengthy and costly process of issuing Request for Proposals. CEM has provided CalPERS with a comprehensive report benchmarking our costs to the pension industry for more than 14 years. The report has been an excellent tool to help us measure our success in providing long-term, cost-effective investment returns. - Anne Stausboll, Chief Executive Officer, California Public Employees Retirement System (CalPERS) CEM provides us annually with a comprehensive look at the cost structure of our 401(k) plan. It is a veritable encyclopedia of fee information and an incomparable resource. No plan sponsor should operate without this level of data. - William H. Preece, Jr., Director, Retirement Funds, Abbott Laboratories Ltd.

6 We use the data that CEM provides us to see how we compare to other retirement systems. This allows us to identify areas where we may want to invest in our business to improve the service we provide our customers, and areas where we may be highcost and may need to try to lower costs. Through the annual reports, special reports and the CEM conference, we are given very practical ideas about how to accomplish those things. Phil Stoddard, Director of Retirement Services, Department of Management and Budget, State of Michigan What you get Your BenchmarkDC report is a comprehensive, detailed document that demonstrates how your plan and its numerous elements stack up against your peer group, based on your plan s size and unique characteristics. Your report will thoroughly evaluate every aspect of the plan with an eye toward participant and fiduciary success and provide you with an invaluable decision support tool. You will also benefit from valuable trend analysis and performance insights from CEM s renowned research program. In addition to our own research, CEM has a unique relationship with the International Centre for Pension Management ( ICPM ) at the Rotman School of Management, University of Toronto, Canada. We collaborate with ICPM to support its goal of being a global catalyst for improving pension management. And finally, our team of experts will meet with you in person for a detailed, face-to-face briefing on your results and to answer any questions you might have about the contents of your report. How the process works Working with CEM to populate your BenchmarkDC report is a streamlined process. We collect your plan information using our robust, online survey tool. Once we have collected, cleaned and aggregated the data from all of our DC clients, we will work with you to select your optimal benchmarking peer group. Next, we will issue your customized report, followed by an in-person meeting to present the findings of your report to your plan s board and/or management team. Measure. Manage. Grow. CEM helps empower plan fiduciaries through insight and information. We take the overwhelming amount of raw data residing within your plan and, by comparing it with our industry-leading universe of DC plan data, turn it into objective, actionable intelligence. We can help you accurately benchmark cost, investment performance, plan services, plan design as well as fiduciary/governance arrangements. Let CEM provide you with the information you need to empower betterinformed business decisions and help pave the way for the continued improvement and growth of your plan.

7 Sample Analysis

8 For further information, please contact: Jonathan Epstein CEM Benchmarking Inc. 290 Lionel Road Riverside, Illinois United States Head Office 372 Bay Street, Suite 1000 Toronto, Ontario Canada M5H 2W

TOOL SUITE FIDUCIARY MONITORING SYSTEM AND INVESTMENT DUE DILIGENCE. Plan Sponsor Challenge: Retirement Partners

TOOL SUITE FIDUCIARY MONITORING SYSTEM AND INVESTMENT DUE DILIGENCE. Plan Sponsor Challenge: Retirement Partners FIDUCIARY MONITORING SYSTEM AND INVESTMENT DUE DILIGENCE Managing Investment Responsibilities Properly Meeting the obligations of a retirement plan fiduciary may be daunting. You must be sure the funds