Transcript Evangelical Covenant Order of Presbyterians (ECO)

Denominational Retirement Plan
Presented: Colorado Springs:
August
20, 2012
Atlanta:
August 23, 2012
© 2012 Envoy Financial, Inc. All rights reserved.
Envoy Financial, 8415 Explorer Drive, Suite 115, Colorado Springs, CO 80920
Securities offered through Envoy Securities, LLC, Broker Dealer, Member FINRA/SIPC.
Advisory Services offered through Envoy Advisory, Inc., Registered Investment Advisor.
First Use: August 20, 2012
Bruce H. Bruinsma
Envoy Financial
CEO & Co-Founder
Direct: 719.268.2711, ext. 203
Cell: 626.399.2247
Email: [email protected]
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What is retirement?
◦ That depends on your perspective.
◦ Retirement years are also “ministry” years.
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At Envoy, we see retirement as
“not only a reward for past service, but a
stepping-stone to future ministry”
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Future-Funded Ministry:
◦ Managing God’s resources God’s way so His
purposes can be carried out in and through our
lives, to the very end.
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“It is vanity to wish to live long...
and then not to live it impacting others.
A life well spent”
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A National Plan: Reduces costs, simplifies
administration
A 403(b)(9) Church Plan: Maintains key benefits
10% Required church contribution for all
Ministers and Designated Executives
All churches, Presbyteries, and National office a
part of the plan: An Opt Out Option for Churches
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National Office:
◦ Legal
◦ Investment menu
◦ Administrative
oversight
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Local Church:
◦ Who Participates
◦ How much is
contributed (10% for
ministers)
◦ When the church
contributions start
◦ [Universal eligibility
on a voluntary
basis]
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A plan for those with ministerial status and
named executives is required:
◦ 10% minimum contribution
◦ Additional options such as an additional matching
component are possible
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Staff may participate on a voluntary basis
immediately beginning with employment
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A plan for staff composed of either a basic
contribution, matching contribution, or both is
available and up to each church to decide
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Housing Allowance: Distributions taken by
those with ministerial status can be taxprotected
A Roth Provision: After-tax contribution and
tax-free growth
Loan Provision
Default Investment: Where the money goes if
the participant does not select one
Automatic Enrollment: Starts the contribution
even if the eligible participant has not enrolled
Traditional 403(b)
Roth 403(b)
Pre-Tax Contributions
Taxed Contributions
Tax-Deferred Savings
Tax-Free Earnings*
Taxable Withdrawals
Tax-Free Withdrawals*
*Subject to Qualification Rules
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The Retirement Plan
Oversight committee:
Minimum of 5
members:
◦ Minister with investment
knowledge
◦ Minister with no
retirement plan expertise
◦ Investment specialist
◦ Communication specialist
◦ COO of the ECO
◦ Additional member as
needed
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Support for the plan will
come from:
Envoy TPA and
Recordkeeping
Envoy Advisory
Envoy Financial
◦ Legal and Compliance
◦ Recordkeeping and
reporting
◦ Investment Counsel
◦ Education and
Information
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Our SmartPlan
Interactive Guide helps
Participants determine
their risk profile, select
investments, complete
account reviews, and
more!
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Provides clear, concise, easy to understand
information:
◦ Plan information
◦ Keys to understanding
◦ Enrollment : Risk Profile, $ goals, Investment
allocation suggestion
◦ Periodic reviews
◦ All administrative activities: Loans, Distributions,
Contributions, and Investment changes
How does this impact me?
Will I have enough?
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Ministers:
◦ Your PCUSA defined benefit plan will
remain and be distributed according
to its formula and age availability
◦ All future contributions will go into
the ECO 403(b)(9) Church plan
◦ All current 403(b)(9) account values may be
transferred to the new ECO Plan
◦ Transfers from other plans and eligible IRA’s to the
ECO Plan are allowed
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Non-Ministerial Staff:
◦ All current PCUSA 403(b)(9) account values are
eligible for transfer to the ECO 403(b)(9) Plan
◦ All future voluntary, and if
available, church basic or
matching contributions will be
made to the ECO 403(b)(9) Plan
◦ Transfers from other plans and
eligible IRA’s to the ECO plan
are allowed
Effective Salary
$40,000.00
$56,000.00
$60,000.00
Median salary 2010
$52,900.00
$52,900.00
$52,900.00
Salary used for calculation
$52,200.00
$56,000.00
$60,000.00
$661.00
$700.00
$750.00
Pension credits for a 30-year
career
$19,830.00
$21,000.00
$22,500.00
Monthly pension for life
$1,652.50
$1,750.00
$1,875.00
$826.25
$875.00
$937.50
Annual pension credit
accrual
Survivor’s monthly pension
for life
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Key Assumptions:
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Age
Current income
Life expectancy
Salary growth (1.5%)
Contribution to retirement
($ amount) (10%)
◦ Rate of return (6%)
◦ Distribution factor (7.3%)
Current Defined Benefit Plan
+
Current Defined Contribution
Plan
+
ECO 403(b)(9) Plan
=
Estimated Income
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Current PCUSA Defined Benefit $ 2,800
Estimated Defined Contribution $ 1,500
Estimated ECO 403(b)(9)
$ 2,012
Total Monthly Inc. Estimate
Annual Estimated Income
$ 6,312
$ 75,744
◦ Assumes: Age 50, $70,000, retires at 67
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Current PCUSA Defined Benefit $ 3,500
Estimated Defined Contribution $ 1,500
Estimated ECO 403(b)(9)
$ 564
Total Monthly Inc. Estimate
Annual Estimated Income
$ 5,064
$ 60,768
◦ Assumes: Age 60, $100,000, retires at 67
ALERT!
One of the Goals for the ECO plan is total transparency
regarding costs and fees. New regulations will require that
all fees and costs be disclosed by all vendors later in
2012.
In the industry, costs of 403(b) and 401(k) plans have
often not been disclosed. The disclosure will be paired
with the services being provided. There will not be just a
“total” number. If you are involved in other retirement
plans, these
disclosures will be coming later this
year... don’t be surprised.
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Initial:
◦ $5 Recordkeeping setup per participant
◦ $5 Advisory setup per participant
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Ongoing:
◦ $75 per year administrative
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Participant:
◦ Advisory:
$5 annually,  collected monthly
◦ Administrative: $35 annually,  collected monthly
◦ Recordkeeping: .0025 annually,  collected monthly
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Advisory:
◦ $1,000,000 .58% annual rate .0542% monthly
◦ $2,000,000 .48% annual rate .0400% monthly
◦ $4,000,000 .39% annual rate .0325% monthly
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Church decides whether to opt out or not?
◦ If “opt out”, then Church Board to sign required
paperwork
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If in, then decide the answers to:
◦ Who, When, and How much
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Complete the Member Sponsor paperwork:
◦ This will be available “online” so look for information
◦ Select a Member Sponsor Plan
Administrator for your church
◦ Follow the instructions as provided
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Website:
◦ Envoyfinancial.com
◦ ECO Retirement plan website (available soon)
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Question and Answer:
◦ Available online or email
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Envoy Financial ECO representative
(contact information available soon)
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National Office ECO representative
(contact information available soon)
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A National Plan: Nat’l Office, Presbyteries,
Churches
A 403(b)(9) Church Plan, defined contribution
10% to ministers and designated executives
A church may opt out, but have adequate
substitute
Legal, Investments and Administration: National
Office
Plan design and qualifications, local church
Support: Envoy Advisory, Envoy TPA and
Recordkeeping, Envoy Financial
Bruce H. Bruinsma
Direct: 719.268.2711, ext. 203
Cell: 626.399.2247
Email:
[email protected]
m
Web: www.EnvoyFinancial.com
Services provided by:
Envoy TPA and Recordkeeping, Inc.
Envoy TPA and Recordkeeping, Inc.
Envoy Advisory, Inc.
Envoy Securities, LLC
Envoy Financial, Inc.
Third Party Administration
Recordkeeping Services
Registered Investment Advisor
Broker/Dealer Member FINRA/SIPC
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