Provided by:

1. Provided by:

2. Today’s Agenda • Overview of Retirement Plans • How Plans are Used – Private vs Public • Hot Topics and Trends • Employment Opportunities

3. Defined Contribution vs. Defined Benefit

4. Defined Contribution Plans General Overview 457, 403(b) and 401(k)

5. Governmental 457 Plans • State and local government employers • Universities and school districts • Supplement to primary retirement benefits • Eligible and non-eligible plans • Generally available to all employees • Employer may also offer 403(b) and, in some cases, 401(k) plans

6. Section 403(b) Plans • Universities and school district employers • Churches and nonprofit 501(c)(3) organizations • Primary retirement plan or supplemental • 401(k) or 457 plan may also be offered • Contributions may include employee non-elective and/or employer contributions

7. Section 401(k) Plans • Predominately used in private sector • Government plans established before May 1986 • Primary retirement benefit, replacing DB plans • Participation continues to grow • 7.5 million in 1984 compared to 47 million in 2005 • What has influenced this growth? • Cost of defined benefit plans • Increased attractiveness of 401(k) plans

9. Private Sector 401(k) Plans • Generally considered primary benefit • May have small defined benefit (DB) annuity • Many companies freezing or eliminating DB • Matching contributions generally substantial • Portability of benefits is important • Workers generally change jobs more frequently than in the public sector

10. Public Sector DC Plans • Generally considered supplemental • DB plan benefits may be 45% or more of FAE • Retiree health care often provided • Employer matches are less common • Public sector employers may offer multiple supplemental plans • 457, 403(b), grandfathered 401(k) plan

11. Plan Governance • Private and public sector plans must meet federal tax laws and regulations • Private sector plans governed by ERISA and Department of Labor (DOL) regulations • Public sector generally follow as best practice guide • Public sector plans subject to state laws and regulations

12. 404(c) Requirements • Applies to ERISA plans only • Public sector often uses as guide • Provides fiduciary safe harbors • Certain requirements must be met: • diversified investment choices • ability to move or exchange assets • mandatory disclosures

13. Investment Policy Statements • Used by private and public sector plans • Generally, written document • Basis for decisions on investment line-up • Policy and process for • Selecting and monitoring plan’s investments • Adding and removing fund choices

14. Public Sector Employees • Tend to be more conservative investors than private sector employees • On average, are older than those in the private sector • Certain employee groups retire earlier, e.g., police and fire

15. Hot Topics andTrends

16. Automatic Enrollment • More Prominent in Private Sector • Encouraged by 2006 Pension Protection Act • Effective in improving employee participation • Helps meet discrimination testing • Gaining popularity in public sector • Economy has impact on affordability in private sector

17. Target Date Funds • Popularity increasing – both public and private sector • Increased attention from policy makers and regulators • Disclosures and cost an issue • No uniform definition of “target date” • “to” or “through” retirement

18. Plan Fees and Charges • Fee disclosures regulated by DOL • Plan sponsors/fiduciaries • Participants • Reports to the DOL (form 5500) • Increased legislative, regulatory and legal (class actions) scrutiny

19. Lifetime Income Options • Legislators exploring ways to encourage • Companies developing new products to provide lifetime income distributions • Increased issue for employers as workforce ages • Lack of guaranteed lifetime income may result in employees delaying retirement date

20. Employment Opportunities

21. Opportunities with Employers • Responsibility for DC plan varies greatly • Separate Retirement Division • Human Resources • Benefits and Payroll • Finance / Accounting • Treasurer / Controller’s Office • Information technology / Web developers

22. Service Providers • Plans may use bundled or unbundled services • Record-keeping and administrative services • Investment product providers • Communication and education providers • Investment managers • Consultants

23. Employment Opportunities • Account representatives and call centers • Requires securities licensing • Public relations and sales • Product development / project management • Finance, actuarial and accounting • Marketing: designers and writers • Information technology / Web developers