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Cooperating School Districts 403(b) and 457(b) Retirement Trust

Cooperating School Districts 403(b) and 457(b) Retirement Trust An Educated Difference for Supplemental Retirement Savings. What were the Drivers behind the CSD Retirement Trust?. 2009 IRS Regulations

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Cooperating School Districts 403(b) and 457(b) Retirement Trust

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  1. Cooperating School Districts 403(b) and 457(b) Retirement Trust An Educated Difference for Supplemental Retirement Savings

  2. What were the Drivers behind the CSD Retirement Trust? • 2009 IRS Regulations • District Compliance, Administration and Fiduciary Oversight • Districts struggled under the traditional “open access model” • CSD evaluated the issues and created a “Solution” • The “Solution” - The CSD 403(b) & 457(b) Retirement Trust (CSD RT)

  3. What challenges do you face? • Multiple Investment providers and offerings • Unknown or hard to understand fee structure of the different providers • Investment illiquidity due to loads or surrender charges • Lack of discipline or oversight of investment choices • Costly compliance solution • Sales vs. education environment • Lack of consistent communication • Monitoring non-district personnel in buildings

  4. Improves retirement outcomes for Participants by: Lowering fees and making them transparent: Always strives for the lowest investment share class Providing diversified investment options using a single trading platform for both 403(b) & 457(b) plans Offering actively managed, low-cost passively managed index funds and age-appropriate target date funds Seeking “Best in Class” investments with quarterly monitoring & oversight Providing flexibility with both pre- and post-tax deferral options for both 403(b) and 457(b) Enabling participants to buy time into the PSRS/PEERS with no rollover fees Focusing on education and retirement outcomes, not on sales and marketing, using non-commissioned, licensed Financial Advisors whose compensation is not effected by your investment choice Improving the bottom line for participants by striving to increase their retirement account balances to provide higher income replacement Why the Trust is “A Better Choice” It is a “Best in Class” model that…

  5. Addresses District issues by Solving compliance, including tax compliancy for the District and ultimately for the Participants Being faster and more flexible to incorporate needed plan changes Placing all providers (including current ones) under the Trust’s umbrella for all administration Saving Districts time and money, thereby helping allocate valuable resources to other needs Ensuring consistent plan communications Reducing interruptions and security concerns during the school day Why the Trust is “A Better Choice” It is a “Best in Class” model that…

  6. Since it launched in January 2010, the CSD Retirement Trust: Through Dec 31, 2013, has provided participants with investment options that have outperformed their peer benchmark in 24 of the 26 investment categories Decreased investment management fees in 17 of the 24 fund options Lowered administrative expenses by 36 percent Why the Trust is “A Better Choice” It is a “Best in Class” model that…Performs

  7. Who’s Watching the Door? How Using A Single Provider Can Improve K-12 Employee Retirement Outcomes TIAA-CREF examined 403(b) plans in: Arizona, California, Iowa and Texas to determine whether and how different methods of provider control and oversight affect the number of products, investment options and the level of fees that employees pay on their retirement savings accounts. They identified two models. 1) Open access model • Access by any willing provider 2) Controlled access model (i.e. using a bidding process to select, manage and oversee a single provider) http://learn.tiaa-cref.org/content/K12 Recently released, in early 2011 this study by TIAA CREF, led by expert scholars Robert Clark, professor of economics at North Carolina State University and TIAA-CREF Institute Fellow, and David Richardson, principal research fellow at TIAA-CREF Institute, assesses key components of state 403(b) retirement plan structures to identify the method that is most efficient and cost effective.

  8. So, what did the study conclude? “While there are a number of economic reasons for the disparity in fees based on administrative structure, we conclude that… …controlled access (i.e. a single provider) provides a better model for maximizing the likelihood that employees achieve their retirement goals.” What does that mean? Higher Retirement Balances equals Lower Fees

  9. The Trust A Single Provider Model Competitively Bid Using Criteria, e.g. • Total Fees-including full compliance • Consortium Pricing • No Loads/surrender charges/rollover fees • Investment Platform - Open architecture • Guaranteed fund or money market • 403(b) assets under management • Number of public school clients • Current presence in CSD memberDistricts 403(b) plans • Average client retention • # of 403(b) clients of similar size • Advisor-based education model and non- commissioned, licensed Financial Advisors • Call center hours • Comdex Rating (June 15, 2014) • Able to sign hold harmless agreement • Assists with universal availability • Common remitter function • Ready for information sharing agreements • Able to record-keep the 457 • Offer same investments in 403(b) & 457(b) • Provide integrated plan statements

  10. Participant Statement Fees

  11. Participant Statement Fees – An Example * VALIC, CBIZ and CSD’s asset charge is not applied against assets held in the Fixed Interest Fund Total Asset Charges decline as total plan assets grow and reach pre-determined break-points.

  12. CSDInvestment Lineup(investment management feesshown in parenthesis) Higher POTENTIAL RISK/RETURN Lower American Funds EuroPacificGrowth R6 (0.50%) American Funds Capital World Growth/Income R6 (0.45%) International/Global Vanguard Mid Cap Growth Inv (0.51%) Fidelity Advisor Small Cap Growth I (0.92%) Small/Mid Cap Growth Vanguard Selected Value (0.44%) American Beacon Small Cap Value Inst (0.84%) Small/Mid Cap Value • Plus Vanguard Index Signal Funds in the following categories: • Bond (0.10%) • Large Cap Growth (0.10%) • Large Cap Value (0.10%) • S&P 500 (Large Blend) (0.05%) • Mid Cap (0.10%) • Small Cap (0.10%) • Foreign/International (0.14%) • Bold % reflect lower management fees since inception American Funds Growth Fund of Amer. R6 (0.34%) T. Rowe Price Growth Stock (0.70%) Calvert Social Index I (0.21%) Large Cap Growth Vanguard Windsor II Adm. (0.28%) T. Rowe Price Equity Income (0.68%) Large Cap Value Vanguard Target Retirement Income Inv (0.16%) Vanguard Target Retirement 2005-2060 Inv (5-yr increments) (0.16% - 0.18%) American Funds Balanced R6 (0.29%) Target Date / Balanced PIMCO Total Return Instl (0.46%) American Funds U.S. Government SEC R6 (0.26%) Fixed Income Investors should carefully consider the investment objectives, risks, charges and expenses of a fund before investing. This and other information is contained in the fund’s prospectus and should be read carefully before investing. To obtain a prospectus please contact VALIC. VALIC Fixed Interest Vanguard Prime Money Market Inv (0.17%) Short-term/Stable Value

  13. Oversight Roles & Responsibilities

  14. Service Providers* • CBIZ • 3(21) Investment Advisor • Marketing • Fiduciary Governance • Participant Education • Fees & Expenses • Legal Counsel • Plan Document • Compliance • Amendments VALIC • Record-keeper • Administration • Compliance • Regulatory filings • Employee education campaigns • Financial Advisors deliver • Participant & Plan Sponsor websites • EdPlus • Administration • Oversight • Marketing • Insurance *All service providers/ fees and expenses are subject to CSD RT Board of Advisors oversight and approval.

  15. 30 Participating School Districts (6/30/14) Bayless Brentwood Clayton CSD Dallas County Elsberry Gasconade Grain Valley Grandview R-II Hazelwood Harrisonville Jennings Liberty Lindbergh Maplewood Richmond Heights Mehlville Meramec Valley Orchard Farm Pattonville Ritenour Smithville St. Clair Spring Bluff Special School District Valley Park Warren County R-III Washington Webster Groves Wentzville Wright City Over 3400 Participants and nearly $70 Million in Plan Assets (6/30/14)

  16. Thank you for your interest For additional information, please contact Stephen Keyser, Managing Director CSD Retirement Trust. Email him at skeyser@edplus.org or at 314.265.6192. Securities and Investment Advisory Services Offered Through CBIZ Financial Solutions, Inc. Member FINRA, SIPC and Registered Investment Adviser.  6050 Oak Tree Blvd S., Independence, OH 44131 (216) 447-9000

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