Overview Presented by Leah Messenger, CPP Retirement plans Overview Presented by Leah Messenger, CPP

Defined Benefit Plan – Pensions employer perspective Costs: Annual Funding for participants Audit Investments Administration Defined Benefit Plan – Pensions employer perspective

Defined benefit – Pensions employer perspective Fiduciary Responsibility Employer training Employee Education Investment Review Oversight Committee Review of Plan Vesting Compliance Funding Defined benefit – Pensions employer perspective

Defined Benefit – Pension Employee perspective Contribution - dependent on the plan Percentage of gross pay – pre tax No contribution Contribution limits are defined by the plan, in alignment with federal standards Participant Loans – dependent on plan ERISA and PBGC protected Annual Statement = Summary Annual Report Due 10 months after end of year (Calendar – October) Vesting – average is 5 years Mandatory participation Defined Benefit – Pension Employee perspective

Contribution plans – 401k or 403b employer perspective Cost Share of Cost – dependent on plan Employer match Vesting Percentage Audit Investments Administration Contribution plans – 401k or 403b employer perspective

Contribution Plans – 401k or 403b employer perspective Fiduciary Responsibility Employer training Employee Education Investment Review Contribution Plans – 401k or 403b employer perspective

Contribution Plans – 401k or 403b employer perspective Fiduciary Responsibility Oversight Committee Plan Loans Pre-Tax Roth – after tax Vesting Compliance Funding Contribution Plans – 401k or 403b employer perspective

Contribution Plans – 401k or 403b Employee perspective Contributions: Opt In or Opt Out – dependent on plan Can have a mandatory flat percentage at date of hire (Automatic enrollment Pre-Tax 2019 Limit - $19,000 Catch up - $6,000 ERISA and PBGC protected Loans Hardship Plan Visibility and flexibility – dependent on provider and plan Contribution Plans – 401k or 403b Employee perspective

Contribution Plans – 401k or 403b Employee perspective Annual Statement – Summary Annual Report Quarterly statement from provider Vesting Administrative cost Per pay period flat amount from employer Investment fee’s usually a percentage of assets in plan Admin fee from provider Contribution Plans – 401k or 403b Employee perspective

Contribution Plan – 457 Employer perspective Federal and State Employers only No employer match No audit, as of yet Low maintenance Plan Loans Roth – After tax contributions Pre-tax Contributions Oversight Review quarterly Contribution Plan – 457 Employer perspective

Contribution Plan – 457 Employee perspective Contributions Opt In or Opt out Contribution type: Pre-Tax Roth Or Both Can contribute to a 403b and 457 plan concurrently Double the savings Contribution limit in total- $19,000 Catch up in total - $6,000 Contribution Plan – 457 Employee perspective

Contribution Plan – 457 Employee perspective Investments Administrative costs Percentage of assets in the plan Contribution Plan – 457 Employee perspective

Traditional IRA Not an employer sponsored plan No Audit or oversight No match All employee contributions Employees can setup an IRA and have direct deposit amount per pay period Pre-tax Contribution limit is $6,000 Catch up - $1,000 Employees with employer based retirement plans cannot setup a traditional IRA Traditional IRA

Traditional Roth IRA Not an employer sponsored plan No Audit or oversight No match All employee contributions Employees can setup an IRA and have direct deposit amount per pay period After-tax Contribution limit is $6,000 Catch up - $1,000 Employees with employer based retirement plans cannot setup a traditional IRA Traditional Roth IRA

State plans - california CALSAVERS – JULY 1, 2019 Voluntary Employer registration begins This plan does not apply to employers that already have retirement savings for their employees State plans - california

State Plans - California CalSavers: Employer notifications will be sent to employers with no employee retirement savings: State Plans - California

State plans - California Employers affected will need to: Register for CalSavers at www.calsavers.com/home/employer.html Upload your employee roster to enable enrollment Designate payroll professional or third party provider to facilitate on your behalf Transmit payroll contributions to a third party administrator designated by CalSavers State plans - California

State plans - California Employer Safeguards: No liability for an employee’s decision to participate in or opt out of program No liability for investment decisions of participating employees No fiduciary responsibility No responsibility for: Administration Investment performance The payment of benefits earned by participating employees State plans - California

State Plans - California CalSavers – Employee Information: Contacts the employees directly, not the employer Auto enrollment: Use standard savings plan-Roth retirement savings Auto enrollment default rate 5% Or choose your rate as low as 1% Maximum contribution $6,000 per year, set by the federal government. Catch Up, additional $1,000 per year, if employee is over the age of 50 State Plans - California

State Plans - California Customize your savings options Employees will choose their own investments Opt out or Opt in at any time Portable State Plans - California

State Plans - California CalSavers Withdrawals: Non-qualified distribution: Age 59-1/2 and under 10% Penalty, federal and state Earnings - taxable Qualified distribution: Age 59-1/2 and older Earnings taxable State Plans - California

State plans State Retirement Savings – Colorado – proposed, died in legislation New Jersey and Washington State, setting up a marketplace for retirement savings plans for employers Connecticut – Retirement Savings Plan – disbanded 2016 Legislator are trying to revive Illinois – 2018 Illinois Secure Choice, fully phased in 11/2019 Maryland – implemented but not rolled out Oregon – 2017 Oregon Saves Program fully launched 16 other states are considering State Retirement Savings plans State plans

DOL – 1975 Safe Harbor ERISA Provision exempts employers from fiduciary responsibility is in review – Are in Question???? What does this mean for employers? No fiduciary protection What does this mean for participants? Basis for suing the employer if the savings are not what expected….legal challenges What does this mean for state retirement plans? No protection for employer, less likely to register – disband the plan due to lack of participation State Plans - DOL

State Plans Obama Era – Revisions Likely to pass with current legislation, and Trump will sign? This causing disbandment of the current state retirement plans. State Plans

Payroll Responsibility Employee contributions Due dates Employer Share Who to send the contributions to What type of contributions? Is there an annual audit? What documents are need for the audit? Census data? Does your current system provide census data or will you need to contact the system provider for assistance? When are the audit documents due? Are there pre audit documents?