What gets measured gets managed CEM ANNUAL DEFINED CONTRIBUTION BENCHMARKING SURVEY For plan sponsors of DC, 401(k), 457, 403(b) and Profit Sharing plans for the year ended December 31, 2014 Please complete and return by April 17th, 2015 Online or Excel survey available at www.cembenchmarking.com Return via e-mail to cem@cembenchmarking.com or by fax to 416-369-0879. For questions call 416-369-0568. A. PLAN SPONSORSHIP Plan Sponsor Name: Type of Plan Sponsor Public Corporate Other Plan Name: Plan type 1 (401(k), 457, 403(b), ESOP or other): Main Contact: Title: Telephone: Email: Survey Prepared by: Title: Telephone: Email: Total market value of plan at Dec. 31, 2014: $ millions Number of plan participants that are: Active, including n-contributing employee accounts Retired or separated Total participants What percentage of eligible employees participate in the plan? % 2015 CEM Benchmarking Inc. Page 1
B. DC PLAN OPTIONS for the year ending December 31, 2014 Complete the table below for the sum of all your DC plans with identical options (or your largest or most representative plan). If you offer more options than rows provided, either insert more rows, or alternatively, only provide details of your largest options by market value. Description 2 Include the name of the manager or provider (i.e., Fidelity Magellan) U.S. Stock Funds 14 Market Value Annual Expense Mandate Style 8 Return Ratio Retail Inst'l Is it at 12/31/2014 (TAOE) Percent mutual priced Separate internally in $millions 3 2014 4 in bps 5 passive 6 fund 7 retail 7 account 7 mgd 7 Description 9 2) $ % bps % % 3) $ % bps % % 4) $ % bps % % 5) $ % bps % % 6) $ % bps % % 7) $ % bps % % 8) $ % bps % % Employer Stock Mandated (plan restrictions apply) 11 $ % bps Discretionary (participant directed) 12 $ % bps i.e., Broad, Growth, Value, Equity Income, Other Non-U.S. & Global Stock 13 i.e., Global (includes US), EAFE, etc 2) $ % bps % % 3) $ % bps % % Fixed Income/ Bond Funds i.e., Broad, Short, Long, TIPS, Global, Other 2) $ % bps % % Stable Value/ GIC/ BIC 14 1) $ % bps n/a % 2) $ % bps n/a % Cash or Money Market 15 1) $ % bps n/a % 2) $ % bps n/a % Balanced or Life Cycle 16 i.e., Target Date, Target Risk 16 2) $ % bps % % 3) $ % bps % % 4) $ % bps % % 5) $ % bps % % Other 17 i.e., Private Equity, Real Estate, etc. Large/ All Cap Mid Cap Small Cap Benchmark Benchmark Return 10 Mutual Fund Window 18 Participant Brokerage Account 19 Loans 21 Total $ n/a n/a 20 $ n/a n/a 20 $ n/a n/a 20 What is your default investment option? 22 Are your investment returns: Gross of fees Net of Investment Net of Investment & Administration Fees 2015 CEM Benchmarking Inc. Page 2
C. PLAN ADMINISTRATIVE & FIDUCIARY COSTS Paid from the expense ratio of investment options 23 Costs charged to individuals or to participant accounts 24 Costs paid by the plan sponsor 25 ($000s) ($000s) ($000s) Plan expenses Recordkeeping and administration 26 Custodial and trustee 27 Fiduciary and oversight - internal 28 (if unavailable we will use a default) Consulting 29 Other plan costs (legal, audit, etc.) 30 Participant expenses Participant advice 31 Managed account fees 32 Other participant expenses (for loans, QDROs, etc.) 33 Total 0 0 0 Number of full-time-equivalent internal employees fulfilling fiduciary and oversight functions for the plan? # Revenue sharing Did you receive revenue sharing from any of your providers? 34 If : Was it used to reduce the: Management fee in the participating fund? 34.1 Administration or fiduciary costs such as recordkeeping? Provide the amount of rebates to participants from the plan expense reimbursement account, if any, during 2014 35 $000s Cost allocation methodology Are any recordkeeping or administration costs allocated to participants? If, how are costs allocated: An asset base fee A flat fee per participant A combination of both 2015 CEM Benchmarking Inc. Page 3
D. DC PLAN FEATURES - are your benefits competitive? Are ne, some or all of the full-time employees in your most representative DC plan also in an accruing defined benefit plan? 36 Are contribution or match rates different for those with versus without an accruing DB plan? If you answered "some" and "" to the two questions above please answer the questions below for employees WITHOUT an accruing DB plan. Otherwise, answer the questions below for all employees. None n/a Some All Employee Contributions 37 For the year ending Dec 31, 2014 what were total employee contributions? $ Can employees make after-tax, Roth 401(k) contributions? Can employees make after-tax, n-roth contributions? Is investment in employer stock required to some extent? Is there a mandatory fixed or minimum contribution rate for full-time employees? If, what is the mandatory contribution rate? % Does your plan have automatic enrollment? 37 If, what is the initial automatic contribution rate? % What (if any) is the automatic annual increase in the contribution rate? % What is the maximum rate achieved via automatic increases? % If available, what percentage of participants made voluntary contributions? % Employer Contributions For the year ending Dec 31, 2014 what were total employer contributions? $ Are employer contributions made in company stock, cash or both? 38 co. stock cash Does your plan have an automatic, fixed employer contribution that is t tied to employee contributions? If, what is the fixed employer contribution rate? % Is there a profit sharing component to employer contributions? Do you have a before-tax match? Do you have an after-tax match? If available, what percentage of plan participants are earning the maximum match? % If there is an employer match on voluntary contributions, indicate match terms below: 39 % match on the first % of salary contributed % match on the next % of salary contributed Or, describe the company match: both How did match rates change last year? change up down Managed Accounts Does the plan offer a managed account service to participants? If, how many participants have managed accounts? # What is the total market value of these managed accounts? $ millions Loans Does your plan allow for loans? How many loans are outstanding in total? # What is the average loan balance? $ 2015 CEM Benchmarking Inc. Page 4
Fiduciary Plan Features Does your plan offer: Out-of-plan guaranteed lifetime income product 40 In-plan guaranteed lifetime income product 41 Does your plan offer automatic rebalancing (outside of balanced/target date options)? Fiduciary Structure, Processes and Documentation Who are the fiduciaries named in the plan document as having control over the plan s operation (If the employer sponsoring the plan is named, indicate who currently acts as the internal fiduciary on behalf of the employer): A Committee Board of Directors of Plan A specific person such as CFO Other If a committee, How many committee members are there? # Number of committee meetings in 2014 # Are the minutes of each committee meeting documented? Are the 'named' fiduciaries: Provided formal training as to their role and responsibilities? Required to sign an 'ackwledgement of responsibility' form? Increase employee contribution/deferral Education on the savers tax credit for lower income participants Increase participation by eligible n- Other Have third-parties been appointed as fiduciaries to serve as: a) Investment manager with full discretionary powers for selecting, monitoring and replacing the plan's investment options? b) Investment advisor to provide advice regarding the selection and retention of plan investment options? c) Plan administrator responsible for regulatory filings, disclosures to participants and hiring plan service providers if other fiduciary has that responsibility? Is there documentation that identifies the process for: a) Selection and monitoring of third-party fiduciaries and other plan service providers? b) Investment policy c) Oversight of internal employees involved in operating the plan (i.e., internal fiduciaries, HR staff enrolling employees in the plan, posting deferals, etc) d) Fulfilling administration responsibilities (regulatory filings, disclosures to participants) Financial Advice and Education Is individual financial counseling/investment advice offered to plan participants? If, how is advice provided? Computer-based model Investment advisers Both Does your plan offer financial communication/education via: Group meetings One on one meetings Do participants receive projections of annual income in retirement: In their statements Online Via separate communication Indicate if your plan has campaigns targeted at segments of participants to: 2015 CEM Benchmarking Inc. Page 5
INSTRUCTIONS AND FOOTNOTES 2014 CEM DC Survey 1. Indicate the type of plan(s) you have filled out the survey for. For example, 401(k), 457, 403(b). 2. Provide a unique description for each option that identifies the provider and place under the most appropriate asset class. For example, Capital Guardian Global Stocks belongs under Non-US/Global stock. If an option is managed by multiple managers, then indicate Multiple Managers. See footte 18 regarding options that you will t be breaking out in detail. 3. Indicate the market value of each option at December 31, 2014 in $millions. 4. Indicate the annual return of each option for the year ended December 31, 2014. Returns can be provided gross, net of investment management fees, or net of investment management fees and administration costs. Ensure they are consistent and indicate your reporting basis at the bottom of page 2. If full year returns are unavailable, enter N/A. 5. Provide Total Annual Operating expenses (TAOE) in basis points (100 basis points = 1.00%) for each investment option. TAOE includes all fees and expenses that reduce the investment options rate of return, including: Investment management fees Administrative fees (i.e., custody, transfer agent, audit/tax, fund accounting) that reduce the investment option s return Underlying funds' TAOE for fund of funds Shareholder service fees charged directly against a participant's investment such as commissions, sales loads or charges, redemption/surrender/exchange fees, account fees which are t included in total operating expense For custom target date or risk-based open architecture or multi-manager funds include account level investment management or glide path fees, consultants fees, investment management and other fees weighted for each underlying fund, wrapper fee if applicable and any other expenses accrued for in the NAV. 6. For each option, indicate the percentage of assets managed passively: 0% for entirely active to 100% for entirely passive. Passive/index mandates are those managed with the intent to replicate broadly based indexes such as the S&P500. 7. A retail mutual fund is a mutual fund that is available to retail investors (i.e., Fidelity's Magellan fund). A retail mutual fund could also be institutionally priced (i.e., a different price for institutions than retail investors). An institutional or separate account entails a direct contract with a manager to supply an option(s) that is t available to the general public. Internally managed means that the buy-sell decisions for the underlying assets (e.g., individual stocks, bonds, property) are made inside your organization (including wholly-owned subsidiaries). 8. Mandate style: Classify your options, as best you can, into the styles ted for each asset class where applicable. For US equity funds only, indicate whether the investment option is Large/All, Small or Mid cap. Broad market options should be ted as Large/All and SMID options should be listed as Mid cap. 9. Indicate the benchmarks you use to monitor your investment options. If you do t provide us with your benchmarks, we will provide the most frequently used benchmarks. Benchmarks are the broadly based indices the investment options are intended to outperform (in the case of active mandates) or replicate (in the case of indexed assets). Examples include: S&P500, and combinations such as: 50% Russell 3000 and 40% Lehman Aggregate and 10% U.S. 91 day T-bills. 10. Indicate the annual returns on your benchmark indices. 11. Mandated company stock refers to company stock that the participants are restricted from selling (usually the match portion). 12. Discretionary company stock refers to company stock with selling restrictions. 13. Non-U.S. & Global Equity refers to equity funds that invest either outside the U.S. (i.e., EAFE, emerging, or international) or both inside and outside the U.S. (Global). Funds that combine n-u.s.stocks with bonds should be reported under 'Balanced or Life Cycle'. 14. Stable value funds invest in short-term debt and use an insurance contract (or swap) to eliminate capital gains or losses due to interest rate movement. Wrap fees should be reported in the costs. 2015 CEM Benchmarking Inc. Instructions and Foottes 1
15. Cash/money market funds mandates in primarily U.S. Treasuries, with a weighted average maturity of about 90 days. 16. Balanced or life cycle funds have diversified asset allocations, e.g.: 40% equity, 40% bonds, 20% cash. Indicate whether each fund is a target date fund (the asset allocation changes over time to take into account investors changing risk profile as they age toward a target retirement date) or a target risk fund (the asset allocation maintains a relatively consistent risk profile over time, changing only moderately to reflect expectations regarding asset class performance). May include n-u.s. assets. 17. Other includes all other investment options t covered above, such as: REITs, real estate, hedge funds, alternative assets, etc. 18. Your data in the category "Mutual Fund Window" could be either or both of the following. a) An account that provides fund options from one or more mutual fund families. b) If you do t provide detailed information on all your options (for example you can choose t to input immaterial options), the market value of your remaining holdings should also be included here. We do t collect costs for Mutual Fund Window because they are usually too difficult to obtain. Instead we use a default cost. 19. Brokerage accounts offer participants both mutual funds and individual stocks. Indicate total value of participants holdings through this type of vehicle. 20. The expense ratio is t required here because they are either difficult to obtain (brokerage accounts) or t applicable (loans). 21. If loans are rmally included as part of total plan assets, include the loans here. 22. 23. 24. 25. 26. 27. 28. Describe what the default investment option or option category (i.e. appropriate target date fund) is. If the plan has default option, indicate 'n/a'. Paid from the expense ratio of investment options - Revenue sharing is the most common way of paying administration expenses from the expense ratio of investment options. Revenue sharing is the practice of rebating a portion of an investment option s expense ratio to the recordkeeper in order to offset administrative expenses, either through 12b-1 fees, sub-transfer agency fees, or internal allocations. Revenue sharing is included in the expense ratio of the investment option and is netted from its return. Costs charged to individuals or to participant accounts - Include all administrative expenses that are charged directly to participants or to participant accounts. Charges could be any combination of a flat fee per account, pro rata based on assets, wrap-fees that re-balance revenue sharing, per use charges, and transaction based charges. Costs paid by the plan sponsor - Include all administrative expenses paid by the plan sponsor that were t reimbursed by revenue sharing or charged to participant accounts. Recordkeeping and administration - Fees for recordkeeper and administration services. Recordkeeper services include valuing investments, processing distribution checks, providing participants with statements on their accounts, and nadvice communication if provided by the recordkeeper such as web portals, etc. Administration services include calculation and allocation of employer contributions, compliance work, discrimination and coverage testing, filing annual 5500 forms, maintaining documents, tracking employee eligibility, etc. Custodial and trustee fees - A trustee/custodian is hired to safekeep (hold) the plan assets and ultimately to make disbursements from the plan, and take contributions from the employees. The trustee/custodian may also be used to pay bills to outside vendors for services rendered to the plan. This firm is generally a bank or a trust company and may also be the plan recordkeeper or administrator. Fiduciary and oversight - internal -The salary and related overhead cost of internal staff responsible for overseeing and administering the plan. Responsibilities of oversight staff may include overseeing plan providers and consultants, monitoring and choosing investment options, plan administration (eg. regulatory filings, compliance, etc.) and plan design. 2015 CEM Benchmarking Inc. Instructions and Foottes 2
29. Consulting - Consulting and plan advisor fees for plan design, investment selection and monitoring, n-advice communication provided by consultants to plan participants (i.e., web portals, enrollment memos, group meetings with members for education, etc. Exclude fees for individual participant advice and financial planning) and other plan services. 30. Other plan costs - Include plan level expenses such as legal, audit, etc. 31. 32. 33. 34. 34.1 35. Participant Advice - Include costs relating to services providing assistance with analyzing participants' situations and goals and making investment recommendations (could be computer based or a live professional). Participants are responsible for implementation of recommendations. Managed account fees - Fee based discretionary money management. These could range from computer based model portfolio selection and implementation with automatic rebalancing to contact with a professional investment advisor. Other participant expenses are costs generated by participants such as excessive switches/transfers, loan administration, hardship withdrawals, etc. Revenue sharing is the practice of rebating a portion of an investment option s expense ratio to the recordkeeper in order to offset administrative expenses, either through 12b-1 fees, sub-transfer agency fees, or internal allocations. Revenue sharing is included in the expense ratio of the investment option and is netted from its return. If revenue sharing is credited back to the accounts of participants holding the investment options from which it came (i.e., it is t used to pay administration costs), please ensure the expense ratios reported on the previous page are reduced by the amount of the credit. Plan expense reimbursement accounts (PERA) - Revenue sharing is often paid into a PERA. The PERA may be used to pay plan expenses. If the account has excess, often it is reimbursed to participants. Enter the total amount reimbursed here. 36. Accruing defined benefit plan membership: Answer this question with regards to full-time, fully vested employees. If there are different rules for different employee groups within the plan, answer for the most representative group. 37. Employee contributions: A fixed, mandatory contribution rate is a set rate that cant be decreased. An employer match is an employer contribution that is based on voluntary employee contributions. A fixed employer contribution is t tied to voluntary employee contributions. Examples of how to report these features: Union rules dictate that both employees and employer contribute 7% of salary to a DC retirement plan, with additional employer contributions available. A fixed mandatory contribution rate and a fixed employer contribution would be reported, but employer match. A plan has automatic enrollment (that can be opted out of) with a default rate of 4% (which can be adjusted up or down) with employer matching of 100% up to 4%. An automatic employee contribution and an employer match would be reported, but fixed contributions. 38. Employer Contributions made in the form of an investment option should be classified as 'cash'. 39. Example match terms: '100% match on the first 3% of salary contributed, 50% match on the next 2% of salary contributed'. If your match terms cant be described in the table, use the free text box to describe your match terms. 40. Out-of-plan guaranteed lifetime income solution, such as an annuity, is available to retirees upon their separation of service. 41. The in-plan guaranteed lifetime income is available for active participant deferrals. Some common solutions include a GMWB (Guaranteed Minimum Withdrawal Benefit), longevity insurance, variable annuities and fixed pay-out products. 2015 CEM Benchmarking Inc. Instructions and Foottes 3