PentegraFiduciaryOutsourcingAdvantage

FIDUCIARYOUTSOURCING ADVANTAGE

THE PENTEGRA

Simpler, safer, easier plan management.

ADVANTAGE: YOURS

At Pentegra Retirement Services,

our difference is your advantage.

DIFFERENCE: USA genuine transfer of responsibility from you to us.

Today, there is a great deal of talk about helping employers with fiduciary responsibility, yet the talk often falls short of

what most employers actually want and need—someone to simply handle it for them.

There is a simple solution—fiduciary outsourcing.

Why Outsourcing? Fiduciary outsourcing is the transfer of legal responsibility for a retirement plan to an institutional fiduciary.

Most employers name themselves as Named Fiduciary, 3(16) Plan Administrator, and Trustee because historically there

have been few other options.

This is changing—professional help is available.

Pentegra’s Fiduciary Outsourcing Advantage makes it possible to offload a large portion of the burdens associated with

running a retirement plan.

The result—you save time, money, headaches, and risk; leaving you free to focus on other priorities.

Pentegra is a fiduciary administration company. We manage retirement plans of all types and accept

fiduciary responsibility for doing so.

2 Pentegra Retirement Services

Simpler governance.

That’s an advantage.

The Outsourcing AdvantageRetirement plan administration is involved, complex, and laden with compliance burdens. For many employers, the

level of self-education and the commitment of time and energy required to effectively fulfill these duties is an

unwelcome concern—a concern that too often distracts from the more critical responsibility of running a

business. What’s more, these responsibilities involve significant risk, and while most of the executives and employees

assigned to these roles rarely know what the roles entail or what is expected, the legal burden falls squarely on those

employees as individuals.

Outsourcing offers a simple solution.

Save Time.

Fiduciaries have several distinct burdens that take up time. The educational burden is the time required to become familiar

with basic fiduciary and retirement plan rules, the employer’s own plan provisions, and the processes for implementing

and ensuring compliance with those provisions. Meetings are another burden: employers who outsource can feel safe

opting for fewer and shorter meetings with fewer people attending and less time spent preparing. Other burdens include

time spent on day-to-day operations such as payroll and employee events such as hardship distributions and terminations.

All of these burdens can be reduced through outsourcing.

Save Money.

Time is money to most organizations. The individuals whose time is most needed for fiduciary governance tend to be

officers and executives—those whose time costs the most. Beyond the time savings, some forms of outsourcing, such as

multiple employer plans, offer even greater cost savings in the form of economies of scale that can reduce costs outright.

simplicityAvoid Headaches.

In a complex endeavor involving tens or hundreds of thousands of transactions per year, something will always go wrong,

and fixing it is a hassle. Easy fixes sometimes work and sometimes don’t, such as when an error leads to a filing with the

IRS’ Voluntary Compliance Program. Outsourcing not only eliminates headaches, but also substantially reduces potential

pain, because the easiest way to avoid the headaches associated with being the plan administrator is to NOT be the plan

administrator.

Reduce Risk.

Outsourcing is a transfer of responsibility and therefore potential liability. Some liability remains, but it is well-defined

and small by comparison with what has been outsourced. The law is clear on this point—ERISA Section 405 and DOL

Regulation Section 2509.75-8

say a fiduciary “shall not be

liable for the acts and

omissions” of the fiduciary to

whom he or she outsources

except under certain limited

circumstances.

Outsourcing = cost savings, increased productivity, reduced liability,

increased objectivity,, fewer conflicts of interest, increased services

More successful outcomes.


Transferring accountability and responsibility.


We Make it Easy.Rather than serve as the Named Fiduciary, Trustee, and Administrator for your retirement plan, Pentegra Trust Company

can serve in these roles for you. You choose the level of outsourcing that’s right for you. Pentegra can assume full

accountability and liability for the management of your plan (with certain limited exceptions) or a more limited role.

Whatever role we play relieves your existing internal retirement plan committee and/or board of directors of the

responsibilities associated with such role.

Take Yourself and Your Organization Off of the Legal Documents.

ERISA has been described as a “personal liability statute” because it pierces the corporate veil and holds accountable those

individuals appointed to fulfill fiduciary functions. Most organizations name the organization itself as Named Fiduciary and

Administrator, and either appoint a “directed” Trustee (which leaves responsibility for prudent investing in the hands of

the employer) or appoint one of the organization’s owners or executives as Trustee. The individuals who do the work

associated with these roles are therefore “on the document” legally. The first step in successfully outsourcing these

responsibilities is to get your name and your organization’s name off of the documents by naming Pentegra Trust Company

as Named Fiduciary, Trustee, and/or Administrator—the three principal fiduciary roles in a retirement plan.

Choose How Much Investment Control to Retain.

You choose how much investment control to retain, and the type of help you want with plan investments—whether it is

through an independent investment expert serving as a fiduciary advisor or investment manager, or through Pentegra’s

discretionary trustee services.

responsibilitySome employers prefer local control with the help of an independent investment manager, advisor, or consultant.

Others prefer Pentegra Trust Company as discretionary trustee—again, often with the help of an outside consultant

or advisor. Pentegra’s many industry partners provide a wide range of options and our own open architecture

recordkeeping platform provides maximum flexibility.

Responsibility and Accountability Shift from You to Us.

It’s simple. Through The Pentegra Promise and our Fiduciary Service Agreement, you assign Pentegra Trust Company

responsibility for the duties you choose to outsource. Once responsibility has been formally transferred, you’re off

the hook and we’re on—subject to certain clearly identified exceptions.

Once the legal documents are signed and become effective, Pentegra becomes responsible for the fiduciary

responsibility associated with your plan, with the exception of those responsibilities you explicitly retain under

the terms of our trust and service agreements. When you choose our highest level of outsourcing, only a

handful of responsibilities remain yours, including: the duty to prudently select and oversee Pentegra and anyother

providers you appoint directly; the duty to remit contributions promptly as soon as they are owed to the trust;

and providing clean data to Pentegra, such as employee status and census information. These are still significant

responsibilities, but they are manageable: the rest is up to us.


Institutional accountability and real responsibility.


A legacy built serving as a retirement plan fiduciary.

Pentegra has built a legacy serving as a retirement plan fiduciary for over 70 years. As one of the nation’s longest-serving

fiduciary service providers, we find ourselves in a unique position—there is literally no one like us.

Insist on the Safety of a Regulated Financial Institution.

Retirement plans don’t run themselves; people run them. That’s why it’s so important to insist on an experienced plan

fiduciary. The decision to grant a person or organization legal control or access to your employees’ retirement plan funds is

not one to take lightly, and many pension tragedies begin with a granting of fiduciary authority to an unregulated individual

or entity. When you outsource, insist on a regulated financial institution to serve as fiduciary. It’s the safest and most secure

way to outsource.

Pentegra Trust Company is a regulated financial institution as defined by ERISA. As an institutional fiduciary, we have

important safeguards in place—dual controls, segregation of duties, audits, regulators, reserves, insurance, and governance

structures that add redundant layers of safety—to ensure that your plan is administered according to the highest and most

secure standards.

a legacy of trustThe Pentegra Fiduciary Promise

The Pentegra Fiduciary Promise is, we believe, the strongest fiduciary outsourcing promise available today. While we

do not accept all responsibility and liability blindly, the level of fiduciary outsourcing we do accept and our willingness

to be held accountable are exceptional and are spelled out for all to see in written legal commitments.

We know of no other provider in the nation who willingly accepts the same level of responsibility and accountability

nor has our ability to back our commitments with decades of successful fiduciary service.

Take the Pentegra fiduciary challenge.

Ask these questions when comparing Pentegra to any other fiduciary outsourcing program:

1. How long have you offered 3(16) and other fiduciary outsourcing solutions?

Pentegra’s answer: 70 years

2. How many outsourcing clients do you have and how long have you had them?

Pentegra’s answer: nearly 1,000 outsourcing clients, with hundreds going back more

than thirty years

3. Do you accept ALL fiduciary responsibility, and if not what are the exceptions?

Pentegra’s answer: we do not accept ALL responsibility but we come very close—just read our

contract for the handful of explicit exceptions.

4. Do you provide a fiduciary guarantee, and if so how meaningful is it?

Pentegra’s answer: Have your attorney read our contracts and guarantee—you will find nothing

like them.

5. Is your organization a regulated financial institution as described in ERISA?

Pentegra’s answer: yes. Pentegra Trust Company is a regulated financial institution with all of the

checks and balances this entails.

Look past the marketing catchphrases to the bottom line—service agreements and guarantees—

that truly identify who owns responsibility for real duties. At a time when other providers

are just beginning to experiment with the concept of fiduciary outsourcing, Pentegra makes

meaningful commitments backed by decades of experience.

Learn more about the differences in our approach. Contact the Pentegra Solutions Center

at 855-549-6689 or [email protected] or

visit us at www.pentegra.com

Pentegra Retirement Services.

Our difference is your advantage.

PentegraFiduciaryOutsourcingAdvantage

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