Presented by: Shelby J. Smith, Ph.D. Training/Service/Support by: 401k Marketing

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SecurePlus VIP A Fixed Indexed Annuity (FIA)
Exclusively for 401(k) PlansPhase 3 Training

• Presented by Shelby J. Smith, Ph.D.Training/Ser
  vice/Support by 401k Marketing

For Agent Use Only
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Enrollment Meeting with Employees

• This training session will cover FIA only
• Securities other assets choices of the 401(k)
  plan will not be discussed however, record
  keepers, third party providers and product
  providers generally provide materials/assistance
  for conducting enrollment meetings. If ExpertPlan
  is your record keeper and/or TPA please contact
  their internal wholesalers for assistance or your
  401k Marketing marketing representative.

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Enrollment Meeting for FIA Options

• Traditional Presentation (cameo appearance)
• Employee do-it-yourself with little or no help
• No relationship, trust or credibility built with
  advisor
• Fosters lower participation rate
• On-Line Enrollment
• Only help is via 800
• Same shortcomings as traditional presentation
• Outsourced youre not of loop out of mind
• The 401k Marketing way

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Typical Enrollment Meeting

• You must master information provided
  athttps//www.expertplan.com/secureplusvip.jspSe
  cureadvisor/Password1Securesponsor/Password1
• Supplemental information at www.401kmarketing.com
  
• On-line materials presentations can be
  purchased
• Ask record keeper/TPA/product provider for
  enrollment presentation
• ExpertPlan guide, PowerPoint presentation
  featuring on-line enrollment
• Objective pique interest, boost participation
  foster one-on-one meeting

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Planning Your Enrollment Meeting

• All employees at once or smaller groups?
• Communicating the meeting agenda
• e-mails, bulletin board,n, etc.
• Highlight new menu, enhanced plan lifetime
  income option
• Order distribute materials in advance of
  meeting
• FIA 401kMarketing for materials 877-319-2078
• Other Record Keeper, TPA and/or product
  providers
• Summary of employers 401(k) plan orSummary Plan
  Document
• Schedule during business hours if possible
• Duration 30 to 45 minutes (a business meeting)
• Script presentation, test equipment prepare

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Opening the Meeting

• Senior management (you provide script or
  outline)
• The companys commitment to their employees
• The companys success depends on good employees
• Only happy employees are good employees
• Retirement requires advance preparation one
  answer is 401(k)
• Overview of the companys 401(k) supplements
  handout
• Matching contributions/profit sharing
• Commitment to keep fees reasonable competitive
• Dedication to offer best 401(k) plan possible for
  employees retirement
• The importance of getting sound professional help
• A new plan option for the risk avoiders those
  approaching retirement
• Your introduction (qualifications background)
• Your appearance and demeanor

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Keeping it Simple

• Assume most employees are not knowledgeable
• Avoid jargon and technical terms
• Why save for retirement using a 401(k)
• Payroll deduction is painless plus employer makes
  contributions
• Tax deferral or tax free growth (if Roth is
  offered) Example
• Increasing life spans means a longer retirement
  Example
• Inflation has averaged 4 annually for last 50
  years Example
• Life spans have increased dramatically since
  1900 Example
• Most people approaching retirement not prepared
  Example
• Pay yourself first by contributing to 401(k)
• Social Security will probably not be enough
• Not intended to frighten factual presentation

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Examples

• Compound Interest
• Work for 30 days starting _at_ 1 a day doubles
  daily yes or no?Day 1 0.01, Day 2 0.02,
  Day 3 0.04Day 30 10,737,418.24
• Bob saves 100/month for 30 years starting _at_ age
  25, Mary saves 200/month for 20 years starting _at_
  35, and Shelby saves 300/month for 10 years
  starting _at_ 45. If all earn 6 simple, who has the
  most money _at_ age 55?Bob 100,562 Mary 93,582
  Shelby 50,298
• Inflation at 4 annually and impact on
  retirementGas _at_ 2.50/gallon today will be
  5.48 in 20 years, 50,000 car will cost
  109,556 and 85 hair tint will cost 186.25.
• Life expectancy retirement years are increasing

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Example Life Expectancies Retirement

• Male and Females age 40

Year Males Females If retiring _at_ age 65 Average years in retirement If retiring _at_ age 65 Average years in retirement
Year Males Females Males Females
1900-20 27.74 29.17
1929-31 29.22 31.52
1949-51 31.17 35.64 6.17 10.64
1979-81 34.04 40.16
2000 37.10 41.30
2004 38.00 42.10
2012 (est) 41.40 44.50 16.40 19.50
Increase in retirement years since 1950 Increase in retirement years since 1950 Increase in retirement years since 1950 166 83
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Example Average Savings by Age

• Workers under age 35 have lt 6,000 in savings.
• Ages of 35 and 44 have roughly 22,500.
• Ages 45-54 have saved just under 44,000.
• Baby boomers (55-64) approximately 65,000
• Those 65 and over have savings of 56,000
  Source Employee Benefit Research Institute
• Cost of retirement varies widely
• - Medical expenses for retired age 65 couple
  240,000 Source Fidelity Investments 2012
• - U.S. Census Average income of households
  headed by age 65 was 49,000 in 2010
• 75 x 49,000 x 18 years 661,500 P.V. _at_
  4 465,230 (before inflation)

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Presenting the FIA Option

• FIA unfamiliar to most employees keep it simple
• Features benefits
• Two separate accounts Accumulation Income
• Accumulation Contributions earnings (explain)
• Income Annual increase is roll up rate (GLIR is
  optional)
• Minimum rate guaranteed on accumulation account
• Income accumulation compared adjusted at 5
  year intervals
• Surrender period/penalties (explain additional
  premiums)
• Penalty free withdrawals/inside transfers after
  year 1
• Clearly explain Guarantees
• Worth considering for some of your 401(k) money

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Guaranteed Lifetime Income Rider

• The GLIR is optional (may appeal to near retirees
  risk averse)
• Cost is 0.7 annually fixed for first 20 years
• Cost increases to 0.8 in years 21 30
• GLI determined by age-factors starting at age
  55(specify percentages)
• Roll-up rate guaranteed for first 10 years only
  varies thereafter
• GLI will be paid for life unless withdrawal
  option exercised
• Joint life option for spouse is available
  reduced pay out factor
• Nursing home benefits in some state (omit if not
  state approved)
• Provide details of requirements
• Not available if joint life option chosen
• Provide other details of GLI

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Video explaining FIA and GLIR

• Two versions
• LSW Animated
• NAFA approved
• Available from 401k Marketing or on-line _at_
• http//www.401kmarketing.com/mktg.html
• Consumer e-brochure (p. 3 5) consumer video
• For your information 401k Marketing offers
• PayCheck for Life video
• Retain Your Gains Video
• Available on-line _at_
• http//www.theretirementpros.com

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Enrollment Aids from Record Keeper/TPA

• ExpertPlan
• PowerPoint presentation for on-line enrollment
• Enrollment Guide for employees tutorials
• Private label site for sponsor/participants
  (review)
• https//www.expertplan.com/secureplusvip.jsp
• (username/password) Securesponsor/Password1 (case
  sensitive)
• If not ExpertPlan
• TPA or Record Keeper generally assist with
  enrollment
• May have written materials and/or website
• Master the materials/sites

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Your Objective in the Enrollment Meeting

• Make favorable impression stress your
  availability
• Encourage one-on-one meeting for further details
• FIA option will be new and meeting not sufficient
  for details
• FIA target should be those approaching retirement
  or fearful of risk of loss
• Volunteer to help participants understand the
  on-line enrollment process
• Provide your contact information for future
  reference
• Handout materials should provide access to FIA
  video(s) you showed
• Lots of good videos at www.theretirementpros.com
• Briefly explain diversification ABC approach
  works well
• Stress why participating, starting early
  contribution targets are vital
• Explain how combined Social Security GLIR would
  work (example)

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Example Social Security GLIR

• Annual SS benefits at retirement will be 24,000
• http//www.socialsecurity.gov/planners/benefitca
  lculators.htm
• Desired annual retirement income estimate is
  55,000
• Shortfall is 55,000 - 24,000 31,000
• Now 45 retire _at_ 65 needs 31,000/year from
  401(k)
• Age 65 GLIR factor 4.5 31,000/0.045 688,889
  from 401(k)
• Current 401(k) is 100,000 all annual
  contributions 10,000
• At 6 roll-up FIA income balance 710,641 at age
  65
• Need 689K, got 711K goal reach mission
  accomplished
• Dont forget inflation possibly higher taxes

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Five Facts to Boost Participation with FIA

• AT EVERY OPPORTUNITY STRESS
• FIA has no fees that come out of employees money
• 401(k) offers tax-deferred or tax-free (Roth
  only) growth
• Value of FIA is always up or sideways, never down
• Guaranteed Lifetime Income (optional) is
  predictable
• Start at any age 25 or better

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Assuring an individual meeting

• Your fiduciary responsibilities are
• Your service includes
• Help in understanding the investment choices,
  including FIA
• Assistance with retirement 401(k) contribution
  goal setting
• Guidance in assessing risk for individual
  circumstances
• On-going availability as circumstances change
• 401(k) reviews and progress assessments
• Will schedule private, confidential meeting upon
  request
• Will schedule routine meetings to review 401(k)
  matters
• Youre their pro-bono personal 401(k)
  professional ready to help
• Always available for non-401(k) financial advice
  if needed
• Helping employer make 401(k) even better

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Questions?

• Call Help Desk at 401k Marketing at 877.319.2078
  for details. Talk to your marketer Andy Alvis,
  Celeste duPreez or Rebecca Brundage
• To do list
• Start prospecting for 401(k) plans to add FIA
• Training session 4 follow up servicing