The ADP - Pentegra 3(16) Advantedge™

Presented by:

Pete Swisher, CFP®, CPC, TGPCSenior Vice President - National Practice LeaderSeptember, 2019

For ADP Representative Training Only. Not for Public Distribution.

Working together to drive more successful plan outcomes

Fiduciary Liabilities and Burdens are Real

Employers are fiduciaries

Legal consequences exists for the business owner

Employers are fiduciaries

Employers are legally responsible for plan administration

Employers are required to assure the plan is administered properly

Most plan mistakes involve plan administration

Legal consequences for the business owner

Some Of The Top Plan Mistakes

Plan document not updated to reflect law changes

Failure to follow plan terms

Not using the plan’s definition of compensation for deferrals and allocations correctly

Employer matching contribution errors

Not satisfying non-discrimination tests (ADP & ACP)

Not notifying all eligible employees of their opportunity to defer

Not complying with IRC Section 402(g)

Not depositing employee elective deferrals in a timely fashion

Hardship distribution issues

Not making required minimum contributions for top-heavy plans

Not filing a Form 5500 series return

Not distributing a Summary Annual Report to all participants

The Business Owner’s Perspective

Retirement plans are good for employees

Retirement plans help attract, retain and reward employees

Retirement plans are complicated

I don’t have—or want—the knowledge of how they work

I don’t have time to deal with managing plan details

I need to focus on running my business

Make it easy for me!

What 3(16) Does for the Business Owner

Saves me time

Takes work off my desk

Reduces compliance burdens

Decreases potential liability

Eliminates complex responsibilities

Saves money by saving time

Helps ensure my business is competitive

Improves plan outcomes

ADP & Pentegra Goals

Build Awareness Benefits of

Fiduciary Solution

Capitalize on Current Prospect

Pipeline

Up-Sell Existing

Customers

Fiduciary solutions help solve business owner’s problems Businesses are busy doing what they do Retirement plans can become complicated Businesses tend to not have plan expertise in house Time spent on the plan is time not spent on the business

Every plan will entertain a Pentegra fiduciary solution made available through ADP:

“ADP can help make your retirement plan even better. Not only do we deliver a competitive retirement program that will help attract, retain and reward employees, but it will also save you time by helping reduce the burdens and risks of managing the plan, all of which lets you spend more time on your business.”

Add fiduciary solutions to your existing customer conversations:

“What we are doing now works, and it can be even better with a Pentegra 3(16) fiduciary solution. It will help you save time, reduce the stress of plan related work, save money, and help reduce risks and burdens.“

The Pentegra Difference, Our People…Make our expertise your expertise with access to in-house ERISA attorneys, ASPPA certified QPA, QKA, and CPC Account Managers, backed by a deep bench of expert retirement plan professionals

Unmatched level of fiduciary

expertise and support in the

industry

One of the most experienced 3(16) Administrators in

the nation

75 year legacy serving as an institutional

fiduciary

Serving thousands of complex retirement

plans nationwide

Deep bench of highly credentialed

professionals

Transfer Burdens and Responsibilities to PentegraWith Pentegra’s 3(16) services, employers can insulate themselves against these errors to a greater level than the typical TPA arrangement provides

Provides a level of comfort and relief

Key retirement plan responsibilities are being handled for them

Clarifies the employer’s role and responsibilities

Positions ADP as a trusted partner in their success

There’s An Easier Way…3(16) Fiduciary OutsourcingPentegra’s 3(16) Fiduciary services, made available through ADP’s recordkeeping platform shift certain responsibilities from your organization to Pentegra, transferring many of the legal and operational burdens of managing a retirement plan

Fiduciary outsourcing makes a retirement plan less burdensome

Transfers certain legal responsibilities to an institutional fiduciary

Pentegra assumes responsibility for key retirement plan tasks

All of which makes retirement easier and more effective

The Conversation: Time is Money

The commitment of time and energy is overwhelming.

“The retirement plan shouldn’t distract from

running your business.”

A trusted fiduciary partner means a better retirement plan.

“Having professionals on board will provide you

peace of mind.”

Managing a retirement plan is time consuming.

“Time is better spent running your business.”

There are compliance burdens and administrative responsibilities.

“Retirement plans are hard to understand and require

specific skills.”

Start the Conversation by Asking These Questions

Business owners like you are busy. Is your is time well spent?

How much time can you spend on building and maintaining your

retirement plan?

How much time in a given day are you taking to manage your

retirement plan?

How do problems get resolved?

Are you a fiduciary?

How do you feel about your role as a fiduciary?

How do you help employees understand the retirement plan?

How do you evaluate if your plan is effective?

A Win-Win For the Business Owner Allows an employer to reduce their workload

Saves time, and time is money for business owners

Provides relief from key compliance burdens by transferring the responsibility to Pentegra

Saves money—cost is reasonable when compared to the amount of time and work it costs the business owner

Makes it easy to offer employees a comprehensive and competitive retirement plan

Allows owner to focus on growing their business

As a business owner, isn’t this what’s most important to you?

ADP + Pentegra = A Powerful Team ADP provides recordkeeping platform and services

Pentegra provides varying levels of 3(16) fiduciary support, based on how much the client desires

Improved Outcomes

Reduce risk & burdens

Less work, save time

Three Levels of 3(16) Fiduciary Support

Basic 3(16)Basic 3(16) Enhanced 3(16)Enhanced 3(16) Comprehensive 3(16)

Comprehensive 3(16)

Basic 3(16) Product

Sign & File 5500Sign & File 5500 Interpret Plan

Provisions

Home Loans

Fiduciary Warranty

Fiduciary Document

VaultHardship

Withdrawals

Plan Scorecard (coming in 2020)

Enhanced 3(16) Product

Sign And File 5500 Interpret Plan Provisions

Fiduciary Warranty

Hardship Withdrawals

Fiduciary Document Vault

Plan Scorecard (coming in 2020) Home Loans

Review Compliance Tests

Review Contribution Calculations

QDROs

Plan Audit Support

Review Census Data

Comprehensive 3(16) Product

Sign And File 5500

Interpret Plan Provisions

Fiduciary Warranty

Hardship Withdrawals

Fiduciary Document

Vault

Loans

Compliance Testing

Review Contribution Calculations

QDROs

Plan Audit Support

Pentegra as Named Plan Administrator

Operational Compliance

Oversee Plan Document

SPD and SMMRequired Plan Amendments

Optional Plan Amendments

Participant Notices

SAR

Distributions

Participant Fee

Disclosure

Service Provider Fee Disclosure

Government Reporting

Forfeitures & Suspense Accounts

Eligibility Vesting

Plan Scorecard

(coming in 2020)

Annual Plan Review

EnrollmentNotice and Document

Delivery

Force-outs

Notices of Claims & Appeals

Pricing

Basic 3(16) Product $600 annual fee Paid by Participant

Home Loans - Included Hardship (for limited a time) - Included

Enhanced 3(16) Product $2,000 plus $5.00 per eligible annual fee Paid by Participant

QDRO - $525 Home Loans - Included Hardship (for limited a time) - Included

Comprehensive 3(16) Product $35 per eligible Minimum 400 eligible

Key Talking Points Why Pentegra?

History and Reputation 75 years of serving sponsors as an independent 3(16) administrative fiduciary Pentegra finds errors and plan challenges that others may miss Recognized nationally as a fiduciary expert and industry thought leader A CEFEX-certified TPA

Service to our clients is in our DNA Pentegra values the plans they service. Pentegra’s mission is to serve, rather than sell Our goal is error free service

3(16) Expertise Our team has expertise and tenured experience We combine technology to provide impressive repeatable results Protecting plan sponsors and participants is Pentegra’s priority

Key Talking Points

What’s Important to the Sponsor?

Reduces Administrative Responsibilities Pentegra is an extra set of eyes on the plan

Simplifies the Complex Pentegra removes the chores of the plan, making it easier to have a successful

outcome

Minimizes Risk Pentegra will take on different levels of fiduciary responsibilities that others won’t

Key Talking Points What’s Important to the Micro-Small Market Advisor?

Securing a Client Finding and retaining DC clients is an important initiative for many Financial Advisors

today

Not Having to Be an Expert Financial Advisors do not have the time to become an expert. They often already have

the client’s Wealth Management business.

Finding more Wealth Management Clients Every plan offers Wealth Management opportunities (rollovers, estate planning, personal

money management)

FAQ

What is happening with ADP and Pentegra? ADP and Pentegra have established an enterprise relationship. ADP will begin

selling Pentegra 3(16) services to plan sold on 9/30 and after.

Nothing in this material should be construed to create or provide for any other relationship between ADP and Pentegra, including, but not limited to joint venture or partnership.

FAQ What are the new products being offered?Three products offered, Basic 3(16), Enhanced 3(16) and Comprehensive 3(16). ADP will serve as the bundled recordkeeper and Pentegra will provide 3(16) services “On top of the ADP services”

Basic 3(16) for $600 annually

Enhanced 3(16) for $2,000 plus $5 per eligible

Comprehensive 3(16)for $35 per eligible

Sign and File 5500 Interpret Plan Provisions Fiduciary Warranty Fiduciary Document Vault Home Loans Hardship Withdrawals Plan Scorecard - Coming in

2020

Sign and File 5500 Interpret Plan Provisions Fiduciary Warranty Fiduciary Document Vault Review Compliance Tests Review Contribution Calculations Plan Audit Support Review Census Data Home Loans Hardship Withdrawals Qualified Domestic Relations Orders

(QDROs) $525 per event Plan Scorecard - Coming in 2020

Named as Plan Administrator Sign and File Form 5500 Operational Compliance Fiduciary Warranty Fiduciary Document Vault Oversee Plan Document Interpret Plan Provisions Summary Plan Description (SPD) &

Summary Material Modification (SMM)

Required Plan Amendments Optional Plan Amendments Participant Notices Summary Annual Report (SAR) Loans Hardship Withdrawals Distributions Qualified Domestic Relations

Orders (QDROs) $525 per event Plan Scorecard – Coming in 2020

FAQ

How is this 3(16) service different than what Pentegra does today?

The current Pentegra 3(16) services are typically offered with Pentegra providing TPA and 3(16) in a combined package. These new products leverage Pentegra 3(16) services and fiduciary process, combined with ADP’s recordkeeping.

Said differently, instead of doing the work, we are reviewing the work.

FAQ

How will these new products be sold?

The ADP sales team will be the primary sales force working with prospective clients and Advisors. The Pentegra sales team will act in a support capacity.

It is anticipated that the Pentegra Regional Directors will play a more significant role in selling the Comprehensive product.

Are these new products available with any other Recordkeeper?

No, these products have been designed in conjunction with ADP and require a significant technology interaction with ADP for automation and scale.

FAQ

How are Financial Advisors (FAs) involved?

Advisors are a critical part of the service delivery for both ADP and a Pentegra. In fact, roughly 95% of sales come via an Advisor.

This allows Pentegra to work with a new set of FAs—and distribution partners (typically larger, national Broker Dealers)—who traditional focus on wealth management.

Can I buy the ADP product directly from Pentegra?

No, these products are sold by ADP. However, Pentegra does offer a wide array of services including a full service 3(16) offering. Contact the Pentegra Solutions Center or local Regional Director for assistance.

FAQ What should I do if I get a call or email from one of these new ADP clients?

Any service calls or emails should be referred to: FiduciarySupport_ADP@pentegra.com

Where can I find product details and materials on these products?

www.pentegra.com/Pentegra_adp_316/

What if a client wants to terminate their 3(16) services with Pentegra?

Plan sponsors should contact ADP to change any of their services on these products, including plan details, contact information or Advisor information.

Where should a Plan sponsor go with billing questions?

ADP will be handling all client billing.

Plan sponsors should contact ADP to discuss billing questions.

FAQ What Other Recordkeepers Does Pentegra Work With?

Pentegra works with the following Recordkeepers to provide 3(16) services:

Nationwide Empower Voya John Hancock Principal Ascensus Transamerica TIAA OneAmerica

What Types of Plans Can Offer These Services?

Single employer DC plans 401(k)

403(b)

Profit Sharing

Resources from Pentegra

Pentegra 3(16) Fiduciary Outsourcing Video

Marketing and Training Materials

Pentegra Territory Map

Training PowerPoint

Talking Points

Sales Tips

Basic 3(16) & Enhanced 3(16) Sell Sheet

Comprehensive Sell Sheet

Advisor Sell Sheet Pentegra-ADP Web Page

The ADP-Pentegra AdvantEdge

Sign & File 5500

Improved Outcomes

Less Work, Save Time

Reduce Risk & Burdens

We’re Here to Help

Questions about the program or how it works? Contact us.

Pentegra Contacts

Bruce Harrington, AIF® & CRC®

bharrington@eyesupconsulting.comcell: 617-515-8710

Pete Swisher, CFP®, CPC, TGPCSenior Vice President - National Practice Leaderpete.swisher@pentegra.comcell: 859-608-9920

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