investment products: no bank guarantee i not fdic insured i may lose value the new retirement...

Investment products: No bank guarantee I Not FDIC insured I May lose value

The new retirement realityIs your plan prepared for 2012 and beyond?

PRESENTER NAME LOCATION, DATE


Your complete checklist for 2012

Agenda – An annual health checkup for your plan

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5 Trends you can’t afford to ignore

3 Actions to take now

10 Considerations for the coming year


5 TrendsYou can’t afford to ignore


Fee awareness

2012 is the year for plan sponsors to understand your new fiduciary liabilities called 408(b)(2) – Fee/service transparency61% do not feel prepared for the new rules1

79% of sponsors want to improve understanding of (and potentially reduce) plan fees2

71% rated the new 408(b)(2) fee disclosure requirements as important2

− (29% have no idea how important they are)

In addition, don’t miss the August 30, 2012 deadline for 404(a)(5) – fee disclosures to participants404(a)(5) puts the burden of participant disclosure on the fiduciary – The plan sponsor3

Trend 1

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1. Verisight and McGladrey 2011/2012 Compensation, Retirement and Benefits Trends Survey2. Deloitte Annual 401(k) Benchmarking Survey, 2011 Edition3. “Plan Advisers Should Urge Sponsors to Prepare for 404(a)(5),” April 9, 2012, PlanAdviser.com.


Trend 2

5Source: Deloitte Annual 401(k) Benchmarking Survey, 2011 Edition, PSCA Annual Survey, 53rd Annual Edition

PLANS OFFERING AUTO ENROLLMENT

From enrollment to QDIA to step-up contributions, everything’s going automation

Auto everything


Custom portfolios

Target date funds have become widely adopted within defined contributions plans, but the demand for plan-specific custom target date portfolios is rapidly accelerating

Almost 25% of plan sponsors with target date funds are likely to switchto customized approaches by 2015…

…almost double from about 13% today

Trend 3

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The target date is the approximate date when investors plan to start withdrawing their money in the fund. As the fund

approaches its target year, the fund will decrease its emphasis on growth of capital and increase its emphasis on current income.

Please note that the principal value of the funds is not guaranteed at any time, including at the target date. There is no guarantee that the fund will provide adequateincome at and through retirement.1. Verisight and McGladrey 2011/2012 Compensation, Retirement and Benefits Trends Survey2. Deloitte Annual 401(k) Benchmarking Survey, 2011 Edition3. “Plan Advisers Should Urge Sponsors to Prepare for 404(a)(5),” April 9, 2012, PlanAdviser.com.


Trend 4

7Source: “Poll Finds More Pensions Using Investing Alternatives,” August 25, 2011, PLANSPONSOR.com – Using SEI data

PENSION PORTFOLIOS WITH ALLOCATION TO ALTERNATIVES

401(k) plans can learn from the best practices of pension professionals – The majority have already added alternative investments to their portfolio optionsAlternative investments

401(k) plans can learn from the best practices of pension professionals — the majority have already added alternative investments to their portfolio options


PLANS CHANGING LINEUP IN THE LAST YEAR

Trend 5

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401(k) plans can learn from the best practices of pension professionals – The majority have already added alternative investments to their portfolio optionsIncreasing the strength of plan investment lineups

Sponsors are becoming faster and more willing to change funds in their investment lineups

Source: PlanAdviser.com, Nov. 29, 2011

Identify a resource to work with, either your financial advisor or plan provider ,to help you screen options by performance, management team, style purity and fees


10 ConsiderationsFor the coming year


Consideration 1

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Are plan fees “reasonable” for services received?

How much do the investments cost?

How much does plan administration/recordkeeping cost?

What are the industry standards?

Who pays the fees?

Lowest cost option not always the best – What matters is “reasonable” value for services desired and received

Best practices: Compare current plan fees against relevant benchmarks for similar plans. Request proposals from providers

to find best prices for desired services.

Document plan fees


Best practices: Regularly ask your provider: “Is there anything that I should know regarding a change in service?”

Consideration 2

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The services available through your plan providers change from year to year

New tools and resources can make your life easier – Even at no additional cost

Any aspect of plan management may be enhanced: Administration and compliance Procedures and automation Plan design and documentation Participant education and communication Investment monitoring and analysis

Take advantage of new provider services


Best practices: Forward-looking plans are moving beyond auto enrollment,and using auto step-up as a means of seeking to enhance retirement readiness

Consideration 3

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Automatic services are growing in wide acceptance

Plans that embrace automatic features see higher rates of participation and deferral – building a better long-term situation for both participants and plan fiduciaries

Implement auto enrollment and auto re-enrollment


POPULARITY OF TYPES OF QDIA

Consideration 4

13Source: PSCA, 54th Annual Survey of Profit Sharing and 401(k) Plans – Reflecting 2010 Plan Experience.

Make sure you have a QDIA

QDIA – An important piece of the auto puzzle Automatic deferrals need a Qualified Default Investment Alternative (QDIA) to

receive auto contributions


Best practices: Conducting your own audit can help you avoid painful and costly process of responding to a DOL violation

Consideration 5

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Self-audit administration and procedures

DOL will most likely review your plan document and administrative procedures in a plan audit

Most common mistakes − Failure to amend the plan for tax changes by the end of the period required by law.− Failure to follow the plan’s definition of compensation for determining contributions.− Failure to include eligible employees in the plan or failure to exclude ineligible

employees from the plan.− Failure to follow proper procedures for loans and hardship withdrawals

Benchmark your plan administrative procedures


Best practices:Any changes you make in your plan design or administrative procedures

should be documented, signed, dated and maintained as a permanent part of the plan records.

Your plan may require individual amendments for each change, or it may require that your plan’s prototype document be amended.

Consideration 6

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Evaluate potential plan design changes

Does your plan meet the needs of your workforce?

Changes in employee demographics

Changes in legislation or regulations

Changes in your business objectives


Consideration 7

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“That so many plans sponsors are reviewing and reworking their investment lineups demonstrates the importance they see in delivering the very best investment opportunity as part of the 401(k) plan benefit for their employees, especially in these unusual times.”

– David Wray, President of PSCA

Give participants better opportunities to diversify by improving plan lineup Default investments (QDIA) Core options Alternative investments

By using a step-by-step roadmap, you can optimize your plan’s menu to match the needs and the sophistication of your participants

Source: PlanAdviser.com, Nov. 29, 2011

Review current fund lineup


Consideration 8

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Do you have enough investment options? Do you have too many? Has there been style drift? Are you consistent with your investment policy statement?

Protect your plan fiduciaries by regularly reviewing your investment policy, making necessary changes to your investment lineup – QDIA, core options, alternative investments, and so on – And documenting them

Renew your investment policy statement

Best practicesThree steps for evaluating funds:1. Review fund performance2. Review fund characteristics against original selection criteria3. Place fund in alert or watch status if factors warrant


#1 Concern of plan sponsorsPERCENT OF ALL PLANS INCREASING EMPLOYEE EDUCATION IN LAST 12 MONTHS2

Participant retirement readiness1

The key to communication is its effectiveness to...Engage participants: Enroll, educate and/or adviseExplain investment options: The right lineup can provide the right diversification opportunities

Changes in investment policy may suggest the types of changes needed in participant communication

Consideration 9

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1. Deloitte Annual 401(k) Benchmarking Survey, 2011 Edition2. PSCA, 401(k) and Profit Sharing Plan Response to Current Conditions (2011).

Revamp your communication strategy


Best practices: Visit irs.gov/retirement/sponsor for helpful tools and checklists

Consideration 10

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Model document Custom document

Offered by service providers Less expensive to update Standard language: Makes it easier to

comply with legislative changes

Individually drafted by ERISA attorneys Expensive Generally used when desired provisions

are not available in a model document

If you already have a custom document… do you really need it?

Model or custom?

Keep document current to avoid jeopardizing the plan’s status and tax benefits

Keep plan document up to date


3 ActionsTo take now


Understand and document your plan’s fee profile

MOST POPULAR FEE INFORMATION GATHERED BY PLAN SPONSORS AND THEIR ADVISORS...

Action 1

21Source: PSCA, 54th Annual Survey of Profit Sharing and 401(k) Plans – Reflecting 2010 Plan Experience.

Focus on fees


Action 2

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Your home should fit your family’s needs and demographics

Your retirement plan should suit your company needs and participant demographics

Align plan features to: The real needs of your workforce, Changes in legislation and regulations, and Changes in your business objectives

Focus on plan design


Action 3

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Investment diversification is an important key to retirement readiness

Ensure that your lineup offers the right mix of attributes

Respectable performance

Style consistency

Professional, tenured management

Reasonable fees

Opportunities for diversification among different investment asset classes

Focus on investments


Conclusion: Your checklist for 2012

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5 Trends 10 Considerations 3 Actions

Fee awareness

Auto everything

Custom portfolios

Alternative investments

Lineup strength

Fee documentation

New provider services

Self-audit

Auto enroll/re-enroll

Possible design changes

QDIA

Review lineup

Renew IPS

Revamp communication

Revisit plan document

Focus on fees




Conclusion: Your checklist for 2012

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5 Trends 10 Considerations 3 Actions

Fee awareness

Auto everything

Custom portfolios

Alternative investments

Lineup strength

Fee documentation

New provider services

Self-audit

Auto enroll/re-enroll

Possible design changes

QDIA

Review lineup

Renew IPS

Revamp communication

Revisit plan document

Focus on fees




Additional resources

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Helpful sources of information for plan sponsors:

US department of labor dol.gov/ebsa

IRS irs.gov/retirement/sponsor

Profit sharing/401(k) council of America psca.org

401(k) answer book aspenpublishers.com

PlanSponsor magazine plansponsor.com

401khelpcenter.com 401khelpcenter.com

DWS investments dws-investments.com

Investment products: No bank guarantee I Not FDIC insured I May lose value 27

QUESTIONS?


Important information

OBTAIN A PROSPECTUSTo obtain a summary prospectus, if available, or prospectus, download one from www.dws-investments.com, talk to your financial representative or call Retirement Plans Sales Support at (800)522-1441. We advise you to carefully consider the product’s objectives, risks, charges and expenses before investing. The summary prospectus and prospectus contain this and other important information about the investment product. Please read the prospectus carefully before you invest.


Important information

DWS Investments Distributors, Inc.222 South Riverside Plaza Chicago, IL 60606-5808www.dws-investments.com Tel (800) 522-1441

DWS Investments is part of Deutsche Bank's Asset Management division and, within the US, represents the retail asset management activities of Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Investment Management Americas Inc. and DWS Trust Company.

NOT FDIC/NCUA INSURED MAY LOSE VALUENO BANK GUARANTEE NOT A DEPOSITNOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY

The information provided is for educational purposes only and is not intended to serve and should not be relied upon as tax, legal or security advise or construed as such. Specific questions and application of specific rules should be addressed by competent ERISA counsel. Neither DWS Investments nor its affiliates can give tax advice.

All investments involve risk including potential loss of principal.

© 2012 DWS Investments Distributors, Inc. All rights reserved. R-27813-1 (06/12)

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