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Private Equity Consolidator (PEC)Presented By:Dan Aceti
Supplemental Disability Offer Permanent and Portable High Quality IDI Coverage Guaranteed Standard Issue 20% Premium Discount off of Unisex Rates One page app / 5 questions No minimum participation requirement (for voluntary offers) Customizable plan design for each FirmINTERNAL USE ONLY. Not for public distribution.2012 NFP EXECUTIVE BENEFITS SALES SUMMIT
The PEC Plan - The OfferOption 1: 75% replacement less the LTD to a max of 7,500/mo GSI Premium is Employee paidOption 2: 75% replacement less the LTD to a max of 10,000/mo GSI Premium would be Employer PaidOption 3: Combination of Employer and Employee Paid Total Replacement Ratio will be 65% if the underlying GLTD provides for a tax free benefit at claim. All offers assume complete census and enrollment access provided.INTERNAL USE ONLY. Not for public distribution.2012 NFP EXECUTIVE BENEFITS SALES SUMMIT
The PEC PlanOption 1 ExampleOption 2 Example 280,000/ year Income 320,000/ year Income Examples assume a GLTD plan of 60% to 10k per month.INTERNAL USE ONLY. Not for public distribution.2012 NFP EXECUTIVE BENEFITS SALES SUMMIT4
GSI Offer - Voluntary Plan LimitsPEC offer vs Industry Standard* Typically need 3 to 4 times this in eligible lives in order to meet participation requirements.INTERNAL USE ONLY. Not for public distribution.2012 NFP EXECUTIVE BENEFITS SALES SUMMIT5
Initial Results 20 cases Over 1,600 written lives Over 1,300,0000 of premium 30% average participationINTERNAL USE ONLY. Not for public distribution.2012 NFP EXECUTIVE BENEFITS SALES SUMMIT
Private Equity Categories Specialize by Sector Controlling Interest or less Unique introduction to the Portfolio Companies (PortCos) Driving Savings is a primary objectiveINTERNAL USE ONLY. Not for public distribution.2012 NFP EXECUTIVE BENEFITS SALES SUMMIT
Private Equity Firm – LTD Risk Transfer
Risk Transfer – What is it? Tactic to reduce the spend for company provided disabilityprotection while maintaining benefit levels Integrated Individual Disability Insurance (IDI) with a groupLTD plan. When it works, the results can be very positive: Immediate and Future Cost savings Reduced rate volatility Improved benefitsINTERNAL USE ONLY. Not for public distribution.2012 NFP EXECUTIVE BENEFITS SALES SUMMIT
Group LTD Risk Transfer - How does it work? The illustration below shows a Group LTD plan moving froma High Limit Group LTD plan to an integrated plan with IDI.Percentage of Income Replaced70%60%50%60% to 10k/mo40%30%60% to 20k/mo20%60% to 10k/moIntegrated coverageprovides a benefit equalto 60% to a combinedmaximum of 20,000 /month.10%0%Current LTD PlanGroup LTDINTERNAL USE ONLY. Not for public distribution.Integrated LTD/ IDI PlanIDI2012 NFP EXECUTIVE BENEFITS SALES SUMMIT
Group LTD Risk Transfer - Why does it work? Transfer of Risk Rate Stability GLTD plan is more marketable Value Added Long Term SolutionINTERNAL USE ONLY. Not for public distribution.2012 NFP EXECUTIVE BENEFITS SALES SUMMIT
Coverage Analysis ChartIncomePlan assumes: GLTD is 60% to 10,000, ER Paid IDI is 60% to 10k and Buy Up IDI is 75% to 5k1) LTD Coverage Cap reduced from 400k to 200k due to Risk Transfer.INTERNAL USE ONLY. Not for public distribution. 200,000 400,0002012 NFP EXECUTIVE BENEFITS SALES SUMMIT
Case StudyCompany Profile Financial Services Industry 18,000 Employees Employer Paid Group LTD Plan: 60% to a max benefit of 20k/monthPlan Design Objectives Reduce cost To minimize risk volatility in the Group LTD plan Provide a stronger benefit for executivesINTERNAL USE ONLY. Not for public distribution.2012 NFP EXECUTIVE BENEFITS SALES SUMMIT13
Case Study - ContinuedRisk Transfer ApproachCurrent GLTD Plan Design60% to a Maximum 20,000/moGLTD decreases to 60% to 10,000/mo IDI at 60% to 10,000/mo.Combined Maximum 60% to 20,000/moGroup LTD: Volume / RatesCurrentCurrentCoverageMonthly PayrollVolumeLTD RateLTD 112,572,5740.300Monthly Payroll VolumeRisk Transfer 110,132,387LTD Rate0.240Alternative Plan Design Annual CostCoverageCurrent LTDPremiumAnnual SpendLTD Cost 4,052,613 3,171,813IDI Cost0 399,011Total ER Cost 4,052,613 3,570,824Annual Premium SavingsINTERNAL USE ONLY. Not for public distribution. 481,7892012 NFP EXECUTIVE BENEFITS SALES SUMMIT14
International BenefitsPresented By:Bill Folan
NFP’s Global Benefit ServicesBackground For most of our history, our focus has been exclusively on U.S. Fortune1000 companies Nearly one-third of our nonqualified deferred compensation clients werefinancial services companies: More complex types of compensation deferred (awards, commissions, bonuses) More financially sophisticated plan participants pushed service levels Plan sponsors included U.S. subsidiaries of 3 German banks and one French bank.These complex plans were set up mainly for an American workforce,included 401(k) features, and based in the United States.INTERNAL USE ONLY. Not for public distribution.2012 NFP EXECUTIVE BENEFITS SALES SUMMIT
NFP’s Global Benefit ServicesClients Influence System Development We have always tried to be on the leading edge of NQ benefitadministration.However, much of our “innovation” is in response and in collaborationwith specific clients’ needs.The catalyst for developing our “global” plan capabilities was anexisting/prior client’s needs: Established client service relationship, which allowed collaboration on new system History of unique admin meant clients comfortable with new system development Agile, focused staff that could respond quickly to requests and changes.INTERNAL USE ONLY. Not for public distribution.2012 NFP EXECUTIVE BENEFITS SALES SUMMIT
NFP’s Global Benefit ServicesClients Influence System Development Similar to SERPs and NQDC plans in purpose, but more complexreporting, valuation and stakeholders Complexities raised the bar for choosing technologies, creating reportingmodules and finding staff. The result of building for multiple plans/multiple clients was a flexiblesolution that can be re-sold to like-stature employers.INTERNAL USE ONLY. Not for public distribution.2012 NFP EXECUTIVE BENEFITS SALES SUMMIT
Continually Adapting to Different DesignsPlan Designs Global Retirement Plans Target Amount DB Plans Voluntary Deferred Employee CompensationCarried Interest Plans NFP System’s flexibility allows it to administer Carried Interest Plans These plans provide share of profits that the partners of organizations like privateequity and hedge funds receive as to motivate the partner (e.g., fund manager)to work toward improving the fund's performance. Traditionally, the amount of carried interest is around 20-25% of the fund'sannual profit.INTERNAL USE ONLY. Not for public distribution.2012 NFP EXECUTIVE BENEFITS SALES SUMMIT
NFP Story – Current “Global Admin” ChapterToday, NFP’s international benefits group reliably manages: Both U.S. based and non-U.S. based benefit plans Thousands of secure, personal account holders 100 distinct global deferral plans and carried interest plans Plans and participants based on five continents and 40 countries. Clients in Consumer Products, Electronics, Financial Services,Hospitality, Staffing, and more. NFP addressing issues such as workforce mobility, multiple currencies,multiple jurisdictions, etc.INTERNAL USE ONLY. Not for public distribution.2012 NFP EXECUTIVE BENEFITS SALES SUMMIT
NFP Global Administration SystemDistinguishing NFP as Global Plan Specialists NFP’s international benefit group has the staff and technology tosupport NFP corporate clients that sponsor these special plandesigns with: separate jurisdictions and rules, distinct valuation procedures, various currencies that are exchanged and displayed instantaneously, payroll feeds from different countries, off-shore trusts.INTERNAL USE ONLY. Not for public distribution.2012 NFP EXECUTIVE BENEFITS SALES SUMMIT
NFP can accommodate any employee statusDistinguishing NFP as Global Plan Specialists And for employees (and independent contractors) who are U.S. citizens, U.S.“green card” holders, and U.S. residents, non-U.S. expatriates, globally mobileemployees, international assignees, third-country, nationals and local nationalsGlobal anPlatformUSCitizensInternationalAssigneesLocal Nationals(Jurisdictional Plan)INTERNAL USE ONLY. Not for public distribution.Third CountryNationals (TCN)2012 NFP EXECUTIVE BENEFITS SALES SUMMIT
Certified Global SystemSpecial Reporting We accommodate country-specific plans requiring the valuation of funds from worldwide markets with underlying investments,trusts, nominees, custodians and currency exchange requirements for contributions,valuations, special distributions and other unique processes.INTERNAL USE ONLY. Not for public distribution.2012 NFP EXECUTIVE BENEFITS SALES SUMMIT
Certified Global SystemInternational Standards NFP’s administration system is SAS 70 / SSAE 16 Type II (domestic)certified and ISAE 3402 (global) certified International Standards for Assurance Engagements (ISAE) No. 3402 audits areinternationally recognized auditing standards developed by the American Institute ofCertified Public Accountants (AICPA). These designations represent that our serviceorganization conducts in-depth audits of control activities, which generally includecontrols over information technology and related processesINTERNAL USE ONLY. Not for public distribution.2012 NFP EXECUTIVE BENEFITS SALES SUMMIT
New Sales and Ongoing RevenueOpportunities Larger global clients willing to pay substantial annual fees for complex,global administration Typically 100,000 to 300,000 but can be significantly more depending on scope ofservices required Revenue sharing is negotiated on a case-by-case basisAbility to offer global admin opens doors for traditional opportunities: Commissions for COLI funding on U.S. plans Commissions for insurance benefits in global plansINTERNAL USE ONLY. Not for public distribution.2012 NFP EXECUTIVE BENEFITS SALES SUMMIT
New Sales and Ongoing RevenueQuestions and CommentsINTERNAL USE ONLY. Not for public distribution.2012 NFP EXECUTIVE BENEFITS SALES SUMMIT
INTERNAL USE ONLY. Not for public distribution. 2012 NFP EXECUTIVE BENEFITS SALES SUMMIT The PEC Plan - The Offer Option 1: 75% replacement less the LTD to a max of 7,500/mo GSI Premium is Employee paid Option 2: 75% replacement less the LTD to a max of 10,000/mo GSI Premium would be Employer Paid Option 3:
