Contributor Report

The purpose of this report is to interpret data normally contained in up to twenty quarterly statements and deliver it in a way that enables participants to answer their most pressing questions about their retirement account then have the confidence to take the necessary actions to close funding gaps. By following its simple three-step process participants can achieve adequate benefits.

The report starts with a summary of the expected retirement income from all known sources, including Social Security and personal investments along with defined benefit, profit sharing, money purchase, and after-tax plans then compares the total to minimum and full income replacement goals to illustrate the retirement income gap. Participants are told the percentage of their ending income their current strategy could replace (replacement ratio).
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Step 1 lists the account balances and contributions being used in the analysis. The allocation of new contributions and ending balance are illustrated as pie charts to show participants the number of funds and their weights. They are told to rebalance their portfolio if necessary. Their personal expected rate of return is calculated using their fund selections and assumptions input by the plan advisor and used to estimate the projected benefits. Quarterly account balances are compared to the balances required to attain the goal which illustrates the current funding gap (if any).
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Step 2 illustrates the individual’s investment performance both on a quarterly and compounded return basis. The longest return is compared with the personal expected return to determine if the expected return is being earned. This is critical information because if the contribution level depends on a specific rate of return and time and the actual return is lower, contribution and/or time increases will be required to meet the goal.

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Step 3 gives two suggestions (one if the participant is seriously underfunded) to close any finding gaps to achieve the next (minimum or full funding) retirement income goal. Option 1 typically has a higher required return (and risk), but lower contribution than Option 2 and Option 2 typically has a greater contribution than Option 1, but lower required return (and risk). Risk (standard deviation) of the participant’s current allocation is compared to the risk of the suggested allocation or fund then tells them that the suggestion could be less risky. Contributions are expressed as a one-time increase or small increases over a number of years. Tax Saver credit and total tax savings are also given.

Contributor Report
Contributor Report (continued)

Our Quick Enrollment form acts as a call to action and makes it as easy as possible to choose a complete solution that could achieve the next goal. It enables employees to color the bubble to enroll in a solution that can accomplish their goal. The form is faxed to our system for tabulation. It can be suppressed for plans that require changes through a web site.

Contributor Report
444 W. Ocean Blvd., Suite 800
PMB 116
Long Beach, CA 90802

Office: (562) 987-2255
Fax: (562) 987-2257
bcorrin@retirementanalyst.com