401(k) ADMIN AdvantageSM

United of Omaha Life Insurance Company - Companion Life Insurance CompanyMutual of Omaha Retirement Services

MUGC9613

ERISA’s FiduciaryRoles

ERISA’s Fiduciary RolesNamed Fiduciary

Investment Manager

Investment Advisor

Trustee Plan Administrator

Delegated Fiduciary

Basis in ERISA

402(a) 3(38) None 403 3(16), 101-103 405(c)

Scope of Authority

Full Limited Limited Limited Limited Limited

ERISA Fiduciary Type

3(21) 3(38) 3(21) 3(21) 3(16) 3(21)

What is 3(16)?

What is 3(16)?

ERISA Section 3(16)

• Defines “administrator”• Includes:

– person designated by the plan, – plan sponsor, if the plan does not designate the

administrator, or– person designated by the DOL

• Places responsibility for ERISA’s reporting and disclosure requirements

ERISA Section 3(21)

• Defines “fiduciary”• Includes someone who:

– has discretionary authority or control over plan administration,

– gives investment advice, or – has discretionary authority or control over plan

management or control over plan assets

Fiduciary Duties, Liabilityand Protection

Fiduciary Duties• Take care: be a prudent expert

– Carry out duties “with the care, skill, prudence and diligence under the circumstance…that a prudent [person] acting in like capacity and familiar with such matters would use”

• Exercise obedience– Follow the plan documents

• Be loyal– Act solely for in the interests of providing benefits to

participants and beneficiaries– Defray the reasonable expenses of plan administration

• Diversify investments

Fiduciary Liability• Personal liability• DOL penalties

– “EBSA Achieves Over $1.6 Billion in Total Monetary Results in Fiscal Year 2013”*

– FY13 EBSA closed 3,677 civil investigations with 2,677 (72.8%) resulting in monetary results or corrective action (2013)*

• IRS penalties (2014)**– Top ten failure #4: not satisfying loan provisions– Top ten failure #5: impermissible in-service distributions– Top ten failure #6: missing RMDs

* http://www.dol.gov/ebsa/newsroom/fsFYagencyresults.html** http://www.irs.gov/Retirement-Plans/Top-Ten-Failures-Found-

in-Voluntary-Correction-Program

Delegation = Fiduciary Protection

• Decision to delegate is a fiduciary decision– requires ongoing monitoring

• Delegated fiduciary retains legal responsibility and exposure for delegated duties

• Plan sponsor and delegated fiduciary serve as co-fiduciaries

401(k) Admin AdvantageSM

401(k) Admin AdvantageSM

• Flexible, unique– Two levels of service

• Participant notices• Transaction processing

– Elective additional services• Processing Qualified Domestic Relations Orders*

(QDROs)• Distribution of participant enrollment booklets to

homes*– Alternative pricing options

• Innovative, forward-looking• Responsive to customer requests and needs

*These services are subject to an additional fee

401(k) Admin AdvantageSM

Participant Notice Distribution Services (Level 1)

– Participant Statements– Participant Fee Disclosures– Blackout Notices– Safe Harbor Notice– ACA, QACA, EACA Notices– Summary Plan Description– Summary Annual Report– QDIA Notice– Missing Participant Services

401(k) Admin AdvantageSM

Transaction Processing Services (Level 2)

− RMD Notices and Payouts− Termination Packets− Involuntary Force-outs− Separation from Service Distributions− Loan Distributions and Monitoring− Hardship Distributions and Monitoring− In-Service Distribution Requests − Management of Unclaimed Checks

Why It Matters

To You

Advantages - Plan Sponsor

• Frees time to spend building business instead of addressing plan’s questions on administrative items

• Reduces risk of administrative errors, making for smoother plan operations

Advantages - Advisor

• Allows for unique value proposition, that can provide competitive edge to build sales

• Fits the needs of a wide variety of plans, allowing for flexibility for your business

• Provides a reason to revisit potential sales

Plan Sponsor Value Positioning

• Simplicity– takes functions off employer’s plate

• Peace of mind– Helps solve employer’s regulatory compliance worries, risk

of fiduciary exposure• Ease of doing business

– one source for services• Cost savings

– potential savings of outsourcing vs. employee efforts

Questions

Disclaimers

The information contained in this presentation and as presented by the speaker has been prepared for general informational purposes only and does not constitute legal advice. The information is general in nature and may not reflect the most current legal developments. Neither this presentation nor any information provided by the speaker creates an attorney-client relationship. You should not act upon this information without seeking advice from an attorney licensed in your own state or from another qualified professional.

This presentation is not intended to be advertising. Advisor use only. Not for plan sponsor use.

This presentation may only be reproduced (in whole or in part) with written permission of the author.

Group variable annuities are long-term investment vehicles designed to accumulate money on a tax-deferred basis for retirement purposes. Distributions may be subject to ordinary income tax and, if taken prior to age 59½, a 10 percent federal tax penalty may apply. Investing in a group variable annuity involves risk, including possible loss of principal.

Investment options are offered through a group variable annuity contract (Forms 902-GAQC-09 or 902-GAQC-09(CT) or 902-GAQC-09(OR)) underwritten by United of Omaha Life Insurance Company for contracts issued in all states except New York. United of Omaha Life Insurance Company, Omaha, NE 68175 is licensed nationwide except in New York. Companion Life Insurance Company, Hauppauge, NY 11788 is licensed in New York and underwrites the group variable annuity (Form 900-GAQC-07(NY)). Each company accepts full responsibility for each of their respective contractual obligations under the contract but does not guarantee any contributions or investment returns except as to the Guaranteed Account and the Lifetime Guaranteed Income Account as provided under the contract. Neither United of Omaha Life Insurance Company, Companion Life Insurance Company, nor their representatives or affiliates offers investment advice in connection with the contract.

For producer use only. Not to be used with any plan sponsor or participant.

United of Omaha Insurance Company and Companion Life Insurance Company are wholly-owned subsidiaries of Mutual of Omaha Insurance Company. Mutual of Omaha Retirement Services is a marketing name for the Retirement Plans Division of Mutual of Omaha Insurance Company.

A separate recordkeeping service agreement is required for the 401(k) Admin Advantage service. Fees apply as detailed in the recordkeeping service agreement.