benefit services alliance new possibilities:
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Benefit ServicesAlliance
New Possibilities:
ADP Retirement Services and Scudder Retirement Services
“Our vision is to harness the power of partnership to deliver comprehensive retirement and benefit solutions. By aligning the world’s best transaction company with the world’s best investment managers, our goal is to free our clients to do what they do best, while helping their employees secure a better financial future.”
Benefit Services Alliance
Industry dynamics Corporate snapshots of Scudder and ADP Benefit Services Alliance Scudder and ADP objectives for the alliance The product continuum Benefits to Scudder clients, advisors, TPAs
Benefit Services Alliance
Administration outsourcing increasing
Changes competitor mix
Provides new strategic options
Decreased revenues from advisory fees
Exposes poor fund performance
Reduces benefit to retail
Largest opportunity in the “Micro” segment
Retail-like products increasing (Simple IRAs, etc.)
Fund choice and good performance required Access to multiple funds
Advice solutions demanded
Brokerage accounts required
System upgrades to add functionality
IT expertise required to customize
New front-end interfaces for participants
Big players growing
Small players exiting
Increased necessity for scale and brand
DefinedContribution
Industry
MarketConsolidation
Disaggregation
TechnologyInvestment
CustomerRequirements
SlowingGrowth
OpenArchitecture
Industry Dynamics
Bringing together two industry leadersEnabling customers to do what they do bestPeople are the key to successWill work across service/solution & customer size spectrums
Benefit Services Alliance
Benefit Services AlliancePlans: 31,689Participants: 1,197,465Assets Under Administration: 18.292 billion
*
Benefit Services Alliance
* as of 12/31/02
Scudder Investments is the US retail brand for Deutsche Asset Management, with over $740 billion in assets under management
Far-reaching global research organization that includes more than 600 portfolio managers and analysts
Investment products for every investment objective 95 retail mutual funds
* as of 12/31/02
Scudder Investments
One of the top defined contribution investment managers with approximately $40* billion in assets
The right plan for any size employer: from owner-only businesses to global corporations
Same comprehensive service and technology provided to Fortune 500 clients is offered to emerging organizations
Innovative and award-winning participant communication & education solutions More than 400 retirement services associates serving over 15,000 retirement plan sponsors
Scudder Retirement Services (SRS)
* as of 12/31/02
A Quick Look at ADP: Founded in 1949,
publicly traded since 1961
Industry leader with over $7 billion in revenue
Over 500,000 clients
Service-oriented with more than 37,000 associates nationwide
ADP
* as of 12/31/02
“We’re the Business Behind Business” Full-service provider – HR, Payroll, Tax Filing, Benefits Administration and Professional Employer Organization (PEO) Services $4.2 billion revenue *
450,000+ clients Largest provider in North America, Europe, Latin America & Australia
ADP Employer Services
* as of 12/31/02
Efficient recordkeeping provides for a profitable and sustainable business model
Products include small- to mid-market plans, executive deferred compensation (EDC), and 529 education savings plans
Fully integrated with ADP payroll platforms (i.e., fully automated data and asset transfer)
National sales, implementation, and enrollment capabilities
ADP Retirement Services
Enables us to grow and remain industry leaders Creates a first-class retirement benefits
services organization Combines complementary strengths of both companies to enable:
Integrated product mix Broader distribution channels Stronger system capabilities and platforms Ability to tap new markets
Benefit Services Alliance
Will offer retirement benefits outsourcing solutions
to employersWill allow for the integrated delivery of products and servicesScudder’s recordkeeping services professionals and information technology (IT) platform will join forces with ADP’s resources to form Benefit Services AllianceWill jointly deliver service to retirement plan
sponsors, plan participants and advisorsWill leverage combined capabilities to market
recordkeeping platform to third parties
Benefit Services Alliance
Years 1-2
Value Creation
Expand products, services & markets
Leverage distribution network; cross-sell
services; integrated payroll
Grow client base via partnerships &
acquisition
Positioning Benefit Services
Alliance as a leader in the
market
Now
Years 3-5
Alliance for Long-Term Growth
The alliance addresses the objectives of Scudder Investments Grow assets under management Create a compelling value proposition Cause no disruption to client base Improve financial performance
Scudder Objectives
The alliance addresses key elements of ADP’s objectives for: Entry into new markets Introduction of new products and services New distribution of recordkeeping and data management products Increased scale and efficiency
ADP Objectives
SRS
PLAN SIZE BY ASSETS
$0M $1M $3M $15M $50M $1B
Personal(k) & Flex Plan
Kansas City, MOPremium Plan & Mid/Large
Market
Salem, NH
Personal(k) & Flex PlanAssets Under Administration: $2.971 Billion
Total Participants: 253,467
Total Plans: 15,295
Premium Plan & Mid/Large MarketAssets Under Administration: $10.184 Billion
Total Participants: 378,894
Total Plans: 937
SRS Product Continuum
as of 12/31/02
SmallAssets Under Administration: $3.671 Billion
Total Participants: 476,663
Total Plans: 15,181
MidAssets Under Administration: $1.466 Billion
Total Participants: 88,441
Total Plans: 276
PLAN SIZE BY ASSETS
ADP
$0M $1M $3M $15M $50M $1B
Small
Roseland, NJ
Mid
Louisville, KY
ADP RS Product Continuum
as of 12/31/02
ADP
PLAN SIZE BY ASSETS
$0M $1M $3M $15M $50M $1B
Small
Roseland, NJ
Mid
Louisville, KY
SRS Personal(k) & Flex Plan
Kansas City, MO
Premium Plan & Mid/Large Market
Salem, NH
ADPAssets Under Administration: $5.137 Billion
Total Participants: 476,663
Total Plans: 15, 457
SRSAssets Under Administration: $13.155 Billion
Total Participants: 635,361
Total Plans: 16,232
unbundled/TPA enabled bundled/future payroll integration
bundled bundled/current payroll integration
SRS and ADP Product Continuum
as of 12/31/02
Serviced by same skilled professionals on the same state-of-the-art platform with no disruption in service
Creates a platform for Total Retirement Outsourcing (TRO)Integrated and expanded product and service offeringsEnhanced service capabilities and access to new technologies
Benefits to Scudder’s Clients
Increased focus and support for Scudder Flex Plan Additional support for Scudder Flex Plan TPAs
Benefits to Advisors/TPAs
Creating Opportunities
Scudder Investments is part of Deutsche Asset Management, which is the marketing name in the U.S. for the asset management activities of Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Asset Management Inc., Deutsche Asset Management Investment Services Ltd., Deutsche Investment Management Americas Inc., and Scudder Trust Company.
Scudder Distributors, Inc.222 South Riverside Plaza Chicago, IL 60606-5808www.scudder.com
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