Transcript Document

40A Grove Street
Pittsford, New York 14534
(585) 218-2060
(800) 836-3960
Fax (585) 218-2013
Todd Cerami
Retirement Plan Specialist
[email protected]
H. Edward Shill, CFA
Principal
[email protected]
Empire State Highway Contractors
PERFORMANCE vs. BENCHMARK
2007
Empire State
Highway Contractors
9.6%
Benchmark:
Lipper Balanced
Mutual Fund Avg.
Q4 1998
COLLECTIVE TRUST
Lipper Balanced
Mutual Fund Average
5.9%
2000
2001
2002
2003
2004
+13.7%
+23.7%
0.4%
5.3%
16.7%
+25.5%
+11.0%
+7.1%
+15.1%
+9.6%
+8.2%
+11.3%
+9.0%
+1.3%
4.4%
11.7%
+19.9%
+7.9%
+4.6%
+10.7%
+5.9%
+5.5%
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2005
2006
2007
Inception
annualized
1999
Past performance is no guarantee of future results. This is for illustrative purposes only and not indicative of any investment. An investment
cannot be made directly in an index. © 2007 Morningstar, Inc. All rights reserved. 3/1/2007
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Empire State Highway Contractors
ASSET ALLOCATION as of 12/31/07
Equity
64%
36%
COMPRISED OF:
Fixed
Income
COMPRISED OF:
4 Separate Account Managers
3 Separate Account Managers
6 Index Funds
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Empire State Highway Contractors Association, Inc.
EQUITY INVESTMENT MANAGER ALLOCATIONS
Large Cap
Growth
Index
S&P 500
5.9%
15.2%
17.9%
9.8%
2.3%
Mid Cap Value
16.9%
Value style
International
Emerging Markets
15.3%
1)
Exxon Mobil Corp (.5)
2)
Tyson Foods Inc
3)
Barrack Gold Corp
4)
Pfizer Inc
5)
Millicom Int’l Cellular
6)
ConocoPhillips
7)
Altria Group Inc
8)
AT&T
9)
Bank of America Corp
10)
ChevronTexaco Corp
International
(EAFE)
Large Cap
Value
Growth style
Index
Small Cap Growth
7.2%
9.4%
Mid Cap Index
Top 10 largest stock holdings
Small Cap
Value


favors stocks with strong earnings
or revenue growth
Small-cap
$250M – $1 B
market capitalization
Mid-cap
$1B - $5B
market capitalization
Large-cap
$5 B +
market capitalization
favors stocks at low prices
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Empire State Highway Contractors Association, Inc.
FIXED INCOME INVESTMENT MANAGER ALLOCATIONS
International
Bond
21.4%
39.2%
39.4%
Intermediate
Bond
*fund manager may own bonds of any maturity
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Unrestricted
Bond*
Healing stock wounds
The odds of losing money generally fall the longer an investor holds a diversified
investment. Probability of negative returns for S&P 500 for holding periods of:
46%
1 day
42%
1 we e k
35%
1 month
27%
1 quarte r
18%
1 ye ar
17%
5 ye ars
10 ye ars
0%
Source: Merrill Ly nch Inv estment Strategy
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TOP 5 RETIREMENT PLANNING MISTAKES
1)
Failure to plan, budget and forecast your
retirement needs
2)
Underestimating how many dollars it takes to
replace your income once you retire
3)
Assuming too high of an annual draw from
your portfolios
4)
Underestimating inflation and its impact on your
long term standard of living
5)
Investing your retirement funds poorly
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FINANCIAL PLANNING CHECKLIST

Beneficiary forms up-to-date?

College savings plan strategy

Life insurance adequate

Updated will
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FINANCIAL PLANNING
TOPIC:
TERM LIFE INSURANCE
Ex:
Income $40,000
Term policy needed to replace:
100% Income
––
50% Income
––
$1,000,000
$500,000
Factors:




Marriage status
Age
Health


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Children
Spouse income capability
Other assets
EMPIRE STATE RETIREMENT PLAN FEATURES
TRUSTEE
NBT Bank, N.A.
ELIGIBILITY
Accepted job classification. No age requirement. Must work at least 1 hour of service per year.
HOURS REQUIRED TO
RECEIVE CONTRIBUTION
1,000 hours is required to receive a contribution. Coverage testing may lower the minimum hours. In
addition, if you have attained age 59 ½ regardless of the number of hours that you worked during the
Plan Year, you will also receive an allocation of the Employer Member Contribution.
CONTRIBUTION TYPES
1.
Employer – Prevailing Pension Supplement (PPS); 1.5% of compensation for non-PPS work;
discretionary
2.
Employee – after-tax
3.
Rollover of Qualified Plan assets
1,000 hours is required for one year of service. Can be combined if employed by more than one
Association Member during the year.
A Worker would receive a contribution at each Employer Member based on the compensation the
Worker received from that Employer Member only if the reason for the change of Employer Members
is due to being involuntarily laid off.
Example 1. Tom is laid off from Employer Member A after 400 hours. Tom then goes to work
for Employer Member B for 700 hours. Tom will receive a contribution from Employer Member A
and Employer Member B.
YEARS OF SERVICE
Example 2. Joe voluntarily terminates his employment with Employer Member A after 400 hours.
Joe then goes to work for Employer Member B for 700 hours. Joe will only receive a contribution
from Employer Member B.
In the event that the 1,000 Hours of Service requirement for purposes of receiving an allocation is
reduced in order to satisfy coverage testing, the Hours of Service for Vesting Purposes shall also be
reduced to the same number of Hours of Service as required to pass coverage testing.
Prior Years of Service with another Employer Member who has adopted the ESHCA Retirement Plan
count towards vesting with your current employer Member. This means that Years of Service are
never lost for vesting purposes. However, your vested percentage earned with a prior Employer
Member will not increase because of future service with another Employer Member.
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EMPIRE STATE RETIREMENT PLAN FEATURES
VESTING
The Association’s graduated vesting schedule is as follows: (A year of service credit will be earned for
any year in which a participant works at least 1,000 hours or more) Less than 2 years – 0%, 2 years –
20%, 3 years – 40%, 4 years – 60%, 5 years – 80%, 6 years – 100%.
You will become 100% vested upon: death while employed, permanent disability while employed, or
attainment of Normal Retirement Age (earlier of age 55 with 6 years of service, or age 65).
DISTRIBUTIONS
You will receive a distribution upon: Attainment of Normal Retirement Age (earlier of age 55 with 6
years of service, or age 65), death while employed, permanent disability while employed, or termination
of employment from all Association Members with 3 consecutive one-year breaks-in-service. A 3-year
break is measured from end of the last plan year (calendar plan year) in which a participant was last
employed by an Association Member.
The value of a Participant’s Account Balance will be determined as of the Valuation Date coincident
with the last date of the month ending before the date the distribution request is received. The
distribution date must be within 3 months of the date of the account valuation.
All distributions are subject to income tax except where they are rolled over to an IRA or another
qualified plan within 60 days.
TAX CONSEQUENCES
OF DISTRIBUTIONS
QUALIFIED DOMESTIC
RELATIONS ORDER
Upon a complete separation from service at the Normal Retirement Age (earlier of age 55 with 6 years
of service, or age 65) the Participant can take his account balance without incurring the 10% early tax
penalty. However, if the participant decides to keep working beyond Normal Retirement Age (earlier of
age 55 with 6 years of service, or age 65), he can still take a distribution, however, he would be subject
to the 10% early penalty tax if a distribution is taken before age 59 ½.
Payment may be made as soon as administratively feasible after the QDRO is executed.
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2008 BENEFIT STRUCTURE
MEDICAL
Benefits
Office Visits
Hospital Inpatient
2008 Benefit
In Network
Out of Network
$ 20.00
80% / 20%
250.00
80% / 20%
50.00
80% / 20%
Hospital Outpatient Surgery
Emergency Hospital Care
$ 50.00
$ 50.00
Annual Deductibles
N/A
$ 1,000 / $ 2,500
Coinsurance
N/A
80% / 20%
Out-of Pocket Maximum
N/A
$ 5,000 / $ 10,000
$ 3,000,000
$ 3,000,000
Lifetime Maximum
RX
Benefits
2008 Benefit
No Deductibles
$3,000 Out-of Pocket Max
Mandatory Mail on Maintenance Drugs
Retail CoPay
$10 / 30% / 50%
DENTAL
Benefits
Mail Order CoPay
$20 / 30% / 50%
2008 Benefit
100% Preventive Care
$50 Deductible with 50% Restorative Care
Annual Maximum to $ 1,000
All benefits are based on Reasonable and Customary Charges (R&C)
VISION
Benefits
2008 Benefit
New Safety Glasses Benefit
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