Third Party Administrators
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Good design is crucial to the success of any retirement savings plan whether you're establishing a plan for the first time or are evaluating your current plan and investment provider. Your TPA plays a major role in helping you to determine the optimum plan design given the objectives you have identified together. Once your plan is established, your TPA will ensure that it continues to satisfy compliance requirements.

More employees participate in plans
where employers match contributions
The single best way to increase employee participation in a retirement savings plan is to offer a matching contribution. And the higher the enrollment rate, the more successful your plan becomes.

Matching contributions benefit key employees
The IRS categorizes employees in any company into two types: highly compensated employees (HCEs) and non-highly compensated employees (NHCEs). Since HCEs as a group are generally able to defer approximately 2% more of their compensation than NHCEs, setting a higher matching contribution for your plan can benefit key employees and provide a competitive advantage in attracting and retaining this group.

As an example, if NHCEs defer an average of 2% of their pay, HCEs as a group will be able to defer 4%. By establishing an employer matching contribution of up to 6%, NHCEs will be encouraged to contribute 6% allowing HCEs to contribute approximately 8% of their compensation.

Providing matching contributions is affordable
In the example below, a W-2 payroll of $1.4 million with an employer matching contribution on the first 4% of employee pay results in an after-tax cost of just $6,600 per year to the employer. The real benefit, however, is the potential for a higher level of NHCE deferrals and thus higher compensation deferral for HCEs.

Determining your company's cost for a matching contribution
Your Situation
Example
Total W-2 payroll $
$1,400,000
Total eligible W-2 payroll for the plan $
$1,000,000
Match limit (e.g. 4%, 5% or 6%)
X
X
4%
=
 $
=
$40,000
Matching contributions rate
(e.g. 10¢, 25¢,or 50¢)		 X X 25¢ match
Mamimum employer out-of-pocket cost
=
 $
=
$10,000
Less federal tax deduction*
X
34%
X
34%
Total real cost to company
=
 $
$6,600
*Based on an assumed federal tax late of 34%. The tax rate applicable to a particular company will vary depending on its taxable income.

Manulife Financial provides
everything you need to make
your plan a success

A full spectrum of investment options
A wide range of separate account investment options covering the major asset classes and fund types.
Guaranteed interest accounts.
Easy selection of investment choices through our Lifestyle funds.

A comprehensive communication program
Research with participants.
Communications that reflect their concerns.
Covers pre-enrollment, enrollment meeting and post-enrollment dialogue.
Detailed reporting to you and your participants.

An effective education program
Explains the value of planning for retirement.
Explains benefits of plan participation.
Motivates employees to enroll.
Teaches the basics of investing.
Details the investment alternatives being presented.

Simplified administration
Detailed confirmations for every transaction.
Toll-free telephone access as well as secure Internet access for participants.

Full investment recordkeeping support
Confirmation of allocations.
Employer financial statements.

Proven success
After attending an enrollment meeting, more than 60% of participants responding to our survey indicated they had an understanding of the investment principles that help make good retirement planning decisions.