Tending the Flock - Index Funds Advisors

More documents

Recommendations

Info

Tending the Flock: Shepherding Catholic Retirement Plans IPS does not describe, however, is how plan participants will obtain an adequate benefit or even what the benefit should be. Laying out a foundation for this type of information is becoming more important as organizations make changes in their retirement programs that require participants to assume a greater share of the risk and responsibility for their own retirement income. If we look at most 401(k) plans in the corporate world, we see that they do not define a retirement income target – so is it any wonder that their participants also fail to understand how to analyze and set retirement savings goals for themselves? Recognizing this gap in understanding, retirement plan committees are embracing the concept of “plan design with a purpose,” which is expressly intended to better guide participants to positive outcomes. With this type of design in mind, we recommend the adoption of a Benefits Policy Statement (BPS). A good starting place for creating a BPS is with a template document, such as the one provided by TIAA-CREF. As indicated on TIAA- CREF’s template, the BPS will “set the framework under which the retirement benefit program and its component plans are to be designed. All other program policies are either informed by or based on the Benefits Policy Statement.” Rod Crane, Senior Director of TIAA-CREF’s Government and Religious Markets, likes to point out that, as Yogi Berra once said, “If you don’t know where you are going, you will wind up somewhere else.” 2 The BPS is the foundational piece that provides a road map of where the retirement program is going. 23
Tending the Flock: Shepherding Catholic Retirement Plans More specifically, Crane explains that the BPS should answer the primary question, “Is this plan’s primary purpose to provide retirement income for life or as a wealth accumulation vehicle? Asking and answering that question separates you very clearly from what the standard answer has been for the corporate 401(k) world, which is that this is a wealth accumulation plan. Retirement income isn’t even part of the equation.” “The Benefits Policy Statement’s first and primary goal for core retirement plans we would suggest is that it’s formally stated that the primary purpose is to provide retirement income for life for the participant. With that guidepost, everything changes with regard to plan design.” Next Steps for Plan Design Now that the committee is taking the time to lay out and build the foundation for the program, it’s a good time to consider adding a trusted partner to the team -- a retirement plan specialist. This specialist is not only a specialist to call upon for assistance in designing and implementing the plan, but is also a fiduciary that will have as much “skin in the game” as the committee for the ongoing objective of helping participants achieve successful outcomes. 2 Rod Crane’s complete comments can be viewed at http://investingforcatholics.com/films/ rod-crane-tiaa-cref.aspx. A sample Benefits Policy Statement provided by TIAA-CREF is available at http://investingforcatholics.com/plan_governance/. 24
Page 1 and 2: Tending the Flock: Shepherding Cath
Page 5 and 6: This book is dedicated to our famil
Page 7 and 8: Acknowledgements We would like to e
Page 9 and 10: Table of Contents Foreword . . . .
Page 11 and 12: Foreword Until now, retirement plan
Page 13 and 14: About Mike Mike Patterson, J.D. LL.
Page 15 and 16: Accolades In this age of hidden and
Page 17 and 18: About Mary Mary Brunson is the Vice
Page 19 and 20: About Judy Judy Baba is the liaison
Page 41: Tending the Flock: Shepherding Cath
Page 93 and 94:
Tending the Flock: Shepherding Cath
Page 95 and 96:
Page 97 and 98:
Page 99 and 100:
Page 101 and 102:
Page 103 and 104:
Page 105 and 106:
Page 107 and 108:
Page 109 and 110:
Page 111 and 112:
show all

Tending the Flock - Index Funds Advisors

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?