CULTIVATING A CULTURE OF FIDUCIARY RESPONSIBILTY Presented by: Jeff Hale, AIFA® Senior Consultant Pentegra Retirement Services June, 2011

RETIREMENT PLAN TRUSTS  The essence of your company’s retirement plan is the plan trust—designed to ensure future income for employees  Retirement plan trusts must be administered for the exclusive benefit of those participants and beneficiaries  ERISA, established in 1974, sets the standard of conduct for those who manage retirement trusts  The standard of conduct includes loyalty, due care and prudence  Cultivating a culture of fiduciary responsibility is essential to navigate these treacherous waters

BEING A RETIREMENT PLAN FIDUCIARY  More than five million people have legal responsibility of prudently managing someone else's money  No licensing or educational requirements for retirement plan fiduciaries  Confusion results from different definitions, interpretations and rules regarding fiduciary responsibilities  Performing these critical duties and responsibilities minimizing liability for your organization and your Board

WHERE DO WE START?  A prudent process is central to fiduciary responsibility  The process turns the abstract into concrete  The process provides the framework for the culture

STEP 1: ORGANIZE  Identify the players  Know the rules: - ERISA - DOL  Define the roles and responsibilities of all parties involved in the process

STEP 2: FORMALIZE  Creating the retirement plan trust ’ s goals and objectives  Identify factors such as investment horizon and level of risk and expected return  This creates the framework for evaluating investment options  Outline in a written investment policy statement

STEP 3: IMPLEMENT  Due diligence process to evaluate potential investments  Identify criteria used to evaluate potential investment options  May use an investment advisor or consultant  Ensure the consultant adheres to the process

STEP 4: MONITOR  Most time consuming; most neglected  Creating a culture of fiduciary responsibility critical for success  Regular on going monitoring required  “Is this the right thing to do?”

CREATING THE CULTURE  The steps reviewed establish the building blocks of a fiduciary process  Without the right culture, the process can become hollow  The tone is set from the top  Asking questions, critical thinking, help cement the culture  Embrace responsibilities; understand you will not be judged on the returns of the portfolio, but on the prudence employed in the creation of the returns

THE PENTEGRA ADVANTAGE  An ERISA-named plan administrator and principal fiduciary for more than six decades  Pentegra offers comprehensive fiduciary relief and consulting services to help your organization cultivate a culture of fiduciary responsibility  Think about how your company handles its fiduciary responsibility

ABOUT THE SPEAKER Jeff Hale, AIFA® is a Senior Consultant in Southeast Region for Pentegra Retirement Services. Prior to this position, Jeff was an Assistant Vice President for a leading benefits consulting group where he successfully managed $250 million dollars in corporate and public pension plans. Prior to that, Jeff spent nearly a decade as a Vice President at a large Wall Street brokerage firm and provided global account leadership for $1.2B in retirement plan assets. Jeff has more than 15+ years of experience in all aspects of employee benefits and retirement planning, with special emphasis on the design, funding, security, administration and implementation of qualified and nonqualified retirement programs. Jeff has worked with many public and private corporations on the coordination of retirement benefits and fiduciary compliance. Jeff holds an M.A. in Organizational Communication from the University of Wisconsin, a B.A. in Psychology from the University of South Florida. He is an Accredited Investment Fiduciary Analyst and holds the FINRA 7, 63 and 66 licensures, among other distinctions.