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401(k) Plan Benchmarking

401(k) Plan Benchmarking . Your Fiduciary Responsibility and Beyond SEBC Spring Conference Atlanta, GA 04.23.2013. Francie Purnell Corporate Director Retirement Plans Republic National Distributing Co. Andrew Miller Director Product Development Principal Financial.

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401(k) Plan Benchmarking

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  1. 401(k) Plan Benchmarking Your Fiduciary Responsibility and Beyond SEBC Spring Conference Atlanta, GA 04.23.2013 Francie Purnell Corporate Director Retirement Plans Republic National Distributing Co. Andrew Miller Director Product Development Principal Financial Jason Chepenik, CFP, AIF Managing Partner Chepenik Financial

  2. Agenda • Plan Sponsor’s Perspective - Republic National Distributing Company (RNDC) Case Study • Provider’s Perspective - Principal Financial • Consultant’s Perspective - Chepenik Financial • Main Focus - Panel Discussion/Q&A

  3. Plan Sponsor’s Perspective – RNDC Case Study • RNDC Overview - Second largest alcohol distributor of premium wine and spirits in the U.S. with wholly owned operations in Alabama, Colorado, District of Columbia, Florida, Louisiana, Maryland, Mississippi, Nebraska, North Carolina, North Dakota, South Dakota, Texas, Virginia, and West Virginia. RNDC also operates in Arizona, Indiana, Kentucky, Ohio, Oklahoma, and South Carolina through venture partnerships. • RNDC is an active organization with seven acquisitions and two joint ventures over the last ten years. • Retirement plan offerings include two 401(k) plans, one defined benefit plan, and non-qualified plans. • Organizational structure and history can complicate plan management with different constituencies and involvement of geographic management.

  4. Plan Sponsor’s Perspective –RNDC Case Study • RNDC 401(k) Plans Combined Overview • Assets of roughly $375mm (up more than $110mm in last 36 months) • Participants of roughly 6,900 • Participation rate of just below 90% • Deferral rate of just below 5.5% • Auto-enroll with current discussions evolving on auto-increases • Last conversion/consolidation in October 2009 • Most recent benchmarking of plan in June 2012 • Proposals from the incumbent at contract renewal – improved pricing • Third-party composites – helped establish reasonability • Blind pricing from multiple providers – established current market • Revisited pricing with the incumbent – minimized disruption to participants and secured price concessions

  5. Plan Sponsor’s Perspective – RNDC Case Study Move beyond plan benchmarking from 1.0 to version 2.0 • Benchmarking 1.0 – regulatory/compliance focus on what the plan sponsor “must do” • They have “popular plans” with roughly a 90% participation rate. • They have “prudent” plans with sound investments and “reasonable” expenses. • Are these plans going to lead to successful retirement for participants? • Benchmarking 2.0 – increased focus on positioning participants for financial success • Participant behavior - hardships and loans • Participant retirement readiness • Communication and education

  6. Plan Provider’s Perspective – Principal Financial Take a holistic approach • Define what success means to you • Why are you benchmarking? • Is your plan set up to recruit and retain employees and/or prepare them for retirement? • Ensure your needs are met and not being held to a rigid benchmark. • It is more than just fees • Look at services provided and offered. • Look at range of investment options. • Understand the team that is supporting the plan.

  7. Plan Consultant’s Perspective – Chepenik Financial It is important to measure outcomes / efficacy of the plan • Income replacement ratio – savings level • Total engagement / not necessarily participation – are they getting it • Financial wellness – or happy employees, leads to loyalty and productivity • Relevancy – discussion should be relevant to situation and especially to the employees • Utility – use the information to make decisions

  8. Thank you Francie Purnell Corporate Director Retirement Plans Republic National Distributing Co. One National Drive, SW Atlanta, GA 30336 404-472-2294 francie.purnell@rndc-usa.com Jason Chepenik, CFP, AIF Managing Partner Chepenik Financial 1010 Orange Avenue Winter Park, FL 32789 407-660-1010 jason@chepenikfinancial.com Andrew Miller Director Product Development Principal Financial 711 High Street Des Moines, IA 50392 515-235-1020 miller.andrew.f@principal.com

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