Advisor Managed Accounts Implementation Fact Sheet

Note: The term Client in this document can also refer to Plan Sponsor.

Plan Information

  • Which service options will Client offer their plans? ​☐ Advice (OnlineAdvice) ​☐ Managed Accounts (QUALMRP) (Was managed accounts ever offered through a previous Recordkeeper?) ​☐ Proposal (generates a strategic marketing plan to send to participants who are not yet enrolled in Managed Accounts) ​☐ Call Center (OnlineCallCenter)

  • Please check all defined contribution plan types that are applicable to Client plans and that will be offered Advisor Managed Accounts: ​☐ 401(k) ​☐ Thrift ​☐ Profit Sharing ​☐ Money Purchase ​☐ 403(b) ​☐ Supplemental 403(b) ​☐ 457(b) ​☐ 401(a) ​☐ Traditional IRA ​☐ Roth IRA ​☐ Rollover IRA ​☐ Simple IRA ​☐ Sep IRA ​☐ Taft-Hartley ​☐ Non-Qualified ​☐ Non-Qualified VA ​☐ Other (please provide details)

  • What RIA’s does the client currently have a relationship with and intend to go live on day 1?

  • Does Client have any defined benefit pension plans? ​☐​ Yes ​☐​ No

  • Does Client have TPAs (Third Party Administrators)? ​​☐​ Yes ​☐​ No

  • Are any Client participants enrolled in more than one plan of the same DC type (i.e. multiple 401(k) plans) on your recordkeeping system? ​☐​ Yes ​☐​ No In Advisor Managed Accounts, you can have more than one plan of the same plan type and receive Advice on each.

  • If participants are enrolled in more than one of the above types of plans, do participants login separately to each of these plans? ​​☐​ Yes ​☐​ No

  • Please list all active employee contribution sources applicable to Client plans (for example: pretax, post-tax, Roth, catch-up contributions). Can all sources be split out and sent to Morningstar separately? Or will some be aggregated together?

  • Do any Client plans have supplemental deferral/contribution sources? ​☐​ Yes ​☐​ No Morningstar Advisor Managed Accounts does not support supplemental sources for 401(k) plans. Basic and supplemental sources will need to be presented in aggregate.

  • Which catch-up contributions do Client plans offer? ☐​ 50 Year Catch Up ☐​ Long Term Employee Catch Up ☐​ Last 3 Years Catch Up

  • Do those plans offer both pre-tax and Roth catch-ups or just pre-tax catch-ups? ☐​ Pre-Tax Only ☐​ Pre-Tax and Roth

  • How does Client record-keep catch-up contributions? Are they stored separately from the regular pre-tax contribution, and can they be sent over to Morningstar separately? Or are they included together with the regular pre-tax contribution?

  • Does Client offer a contribution rate escalator program to its plans?​ ☐​ Yes ​☐​ No If yes, please provide details on that program (i.e., which contribution sources are applicable, what frequency is allowed for the increase (monthly, quarterly, annual, other), and what format is allowed for the increase (% only, $ only or % and $)).

  • Do all Client plans allow contribution rate changes?​ ☐​ Yes ​☐​ No Contribution changes can be turned off at the plan level or at the individual participant level in the xml files. Turning off contribution changes means that contribution detail would not be sent back to Client in the transaction file.

  • Are there any Client plans that allow only specific formats for employee deferrals/contributions? For example, are there plans that only allow deferrals/contributions to be made in % format?​ ☐​ Yes ​☐​ No Are there any plans that only allow deferral/contributions to be made in $ format?​ ☐​ Yes ​☐​ No Are there any plans that allow both? ​☐​ Yes ​☐​ No If yes, let us know if these deferral formats apply to all contribution sources (including catch-ups).

  • Do minimum, maximum and/or combination limit rules apply to plan employee deferrals/contributions? ​☐​ Yes ​☐​ No If yes, please specify which rules apply and can be sent over to Morningstar.

  • Does Client record-keep bonus salary?​ ☐​ Yes ​☐​ No Morningstar recommends that only base salary be sent over by the provider/record-keeper. Participants should be instructed to enter any bonus salary/deferral that will be used for retirement savings as a one-time lump sum in the User Interface.

  • Does plan have a separate election for bonus deferrals? ​☐​ Yes ​☐​ No

  • Can bonus deferrals, if applicable, be sent over to Morningstar? ​☐​ Yes ​☐​ No At this time, bonus deferral should not be included with the regular pre-tax or roth deferral source as it could overstate ongoing contributions to the plan. Participants should be instructed to enter bonus salary/deferral that will be used for retirement savings as a one-time lump sum in User Interface.

  • What types of employer matches/contributions do Client plans have? ☐​ Tiered Employer Match (Example: x% of the first y% of salary contributed. Morningstar supports up to 3 tiers) ☐​ Non-Match Employer Contribution (i.e. Percent of Salary Employer Match) ☐​ Annual Dollar Employer Match ☐​ Combination of Tiered Match and Non-Match Employer Contribution ☐​ Other Type of Match (Please explain)

  • Is the employer match discretionary? ​☐​ Yes ​☐​ No

  • Is the employer match on the pre-tax and/or Roth source of money? ​☐​ Yes ​☐​ No

  • Does Client have any plans that offer post-tax employer match? ​☐​ Yes ​☐​ No

  • Do any Client plans have company stock? ​☐​ Yes ​☐​ No

  • If yes, is the company stock private or public? What is the company stock identifier?

  • Do any Client plans offer more than one company stock in the plan? ​☐​ Yes ​☐​ No

  • Do any Client plans have a self-directed brokerage account/window? ​☐​ Yes ​☐​ No

  • If yes, will Client be able to send brokerage detail (balance, funds) over to Morningstar? ​☐​ Yes ​☐​ No

  • Do any Client plans allow loans? ​☐​ Yes ​☐​ No

  • Does Client have any older plans with unique plan rules that Morningstar should be aware of? ​☐​ Yes ​☐​ No If yes, please explain.

  • Will Client offer the Morningstar Advisor Managed Accounts “Income Secure” path with annuity to all plans? ​☐​ Yes ​☐​ No

  • What type of enrollment channels will Client use for the Advisor Managed Accounts “Income Secure” path? ​☐​ Enrollment via the Morningstar Advisor Managed Accounts web interface (real-time) ​☐​ Enrollment via participant batch xml file (also called paper or batch enrollment) ​☐​ Enrollment via a Call Center representative (real-time) ​☐​ All of the above

  • What type of enrollment channels will Client use for enrolling participants into Advisor Managed Accounts? ​☐​ Enrollment via the Morningstar Advisor Managed Accounts web interface (real-time) ​☐​ Enrollment via participant batch xml file (also called QDIA or batch enrollment) ​☐​ Enrollment via a Call Center representative (real-time) ​☐​ All of the above

  • Will Client utilize auto-enrollment into managed accounts (also referred to as negative enrollment or QDIA)? ​☐​ Yes ​☐​ No

  • In regard to fees for the advisor managed accounts service, will Morningstar receive a flat basis point fee per participant for use of the service or will Morningstar receive a tiered fee? If a tiered fee, please specify how many tiers and what the overall fee to the participant will be.

  • For the Easy Enroll and Progress Reports, a provider or plan sponsor return address, WebURL and phone number is required to display as contact information for participants receiving these reports. Client can send this information over to Morningstar in the plan batch xml file (if the information will vary by plan sponsor) or it can be configured by Morningstar in our database (if one provider level return address, WebURL and phone number will be displayed for all plan participants). Does Client have a preference on whether this detail will be sent over to us in the plan batch xml file or if Morningstar should configure it in its database?

  • Is the client interested in supporting Guidance on outside assets? ​☐​ Yes ​☐​ No

Investment Options

Please send the investment options available for all your plans to Morningstar so that we can complete the investment scrubbing process to determine which investments we have active in our database.

  • Does Client have public, open-end mutual funds in any plan investment lineup? ​☐​ Yes ​☐​ No If so, does Client have registered cusips and tickers for these investment options? ​☐​ Yes ​☐​ No

  • Does Client have any other investment options that do not have registered tickers or cusips? ​☐​ Yes ​☐​ No If so, what kinds of investments are these (i.e., stable value options, separate accounts)?

  • Does Client have non-public, private/custom funds that will need to be set-up in the Morningstar database? ​☐​ Yes ​☐​ No Please note that custom fund data collection/activation is currently a 4-6 week process.

  • Does Client have any Custom Investment Trust funds (CITs) in any plan investment lineup? ​☐​ Yes ​☐​ No If so, are these public or private CITs? ​☐​ Public ​☐​ Private

  • Does Client have any Variable Annuity/Separate Account funds in any plan investment lineup? ​☐​ Yes ​☐​ No If so, will data be collected and stored by Morningstar for the underlying funds or for the sub-accounts? ​☐​ Underlying funds ​☐​ Sub-accounts

  • Do any Client plans offer target-date funds? ​☐​ Yes ​☐​ No Advisor Managed Accounts by default will exclude these funds from its Advice recommendations (we refer to this as our lifestyle fund solution). We also have the option to change this configuration in our database so that target-date funds are not excluded from our recommendations. From a product perspective, we feel that excluding these funds is the optimal configuration setting so that participants will not be confused by our advice including a mix of these funds with core investments, which is possible due to our holdings-based methodology. In addition, our investment consultants will generally not include target-date funds in the portfolios constructed for managed accounts. We will need Client to confirm which configuration setting they would like to use for target-date funds in Advisor Managed Accounts Advice.

  • Does Client have any funds that your participants are restricted from putting current assets into? ​☐​ Yes ​☐​ No If Yes, what types of funds?

  • Does Client have any funds that your participants are restricted from putting future assets into? ​☐​ Yes ​☐​ No If Yes, what types of funds?

  • Does Client have any completely “frozen” or “closed” investment options? (i.e. money can’t be transferred into or out of the investment) ​☐​ Yes ​☐​ No If Yes, what types of funds?

  • Do any Client plans have competing funds subject to equity wash restrictions? ​☐​ Yes ​☐​ No If yes, please specify.

  • Do any Client investment options have FFA fees (flexible fee adjustments)? ​☐​ Yes ​☐​ No

  • Do any client plans offer non-core investments (applicable to MA and AMA)? ​☐​ Yes ​☐​ No

Transactions

  • Will transactions be processed during your nightly cycle? ​☐​ Yes ​☐​ No If yes, what are your cut-off times for processing trades during this nightly cycle (for example, is it the stock market cutoff of 4:00 pm EST)?

  • Will Client be able to accept contribution/deferral percentages and amounts back in the transaction string for pre-tax/post-tax/Roth contributions and catch-up contributions? ​☐​ Yes ​☐​ No

  • Will Client be able to accept and process frozen or restricted funds in the transaction string? ​☐​ Yes ​☐​ No

  • Will Client be able to accept and process company stock (possibly with fund restrictions) in the transaction string? ​☐​ Yes ​☐​ No

  • Will Client be able to accept different allocations (percentages) for current rebalancing and future investment elections in the transaction string? ​☐​ Yes ​☐​ No

Technical

  • What is the name of your Recordkeeping Platform?

  • How does Client manage a user’s session (e.g. cookies, session id’s, both)?

  • What is the Client website’s timeout value? Can Client send it to us in the seamless login string?

  • Does Client want Morningstar to keep the Client website session alive while a participant is in a Advisor Managed Accounts session? ​☐​ Yes ​☐​ No If we do not ping your server to keep the session alive the user will need to log back into the Client website after finishing their session in Morningstar Advisor Managed Accounts.

  • Will Client be able to send the plan batch XML file on a daily basis? ​☐​ Yes ​☐​ No When do you expect the time of delivery to be? ​☐​ Morning ​☐​ Afternoon ​☐​ Evening Morningstar prefers that daily plan batch files are sent. Also, will it be possible for Client to send Morningstar complete files with each transmission? ​☐​ Yes ​☐​ No In other words if you are able to send us the plan batch file daily, we ask that the daily plan file include all Client plans that should have Morningstar Advisor Managed Accounts and that the most updated information is provided for those plans.

  • Morningstar can send a plan batch loading email notification to a group of individuals at Client, or to an email distribution list on your side. We prefer that you set up a generic email distribution address that can be updated as needed for these plan loading notifications. If you already have one and know the group email that you would like us to send that email to, please list that here.

  • Morningstar will create an account for Client on its FTP site: ftp.morningstar.comopen in new window. This account will be used between Morningstar and Client for secure file transmission. ftp.morningstar.comopen in new window supports Secure File Transfer over SSH2 (further details will be provided). Once the account has been established a userID and password will be provided to Client. Client to confirm this arrangement for secure file transmission is acceptable. ​☐​ Yes ​☐​ No

  • Does Client utilize PGP encryption for secure file transfer? ​☐​ Yes ​☐​ No Morningstar requires that the plan and participant xml files are PGP encrypted. Does Client have any other secure file transfer requirements that Morningstar should be aware of?

  • What are Client’s current browser and system requirements?

  • Are brokerage accounts handled on a separate system? ​☐​ Yes ​☐​ No

  • Will Client’s Call Center be used for Advisor Managed Accounts enrollments? ​☐​ Yes ​☐​ No

Interface Specifications

  • Will Client spawn a new window Advisor Managed Accounts or browse in place (Advisor Managed Accounts website replaces Client website)? ☐​ Spawn new window ☐​ Browse in place

  • For Advisor Managed Accounts the RIA is the first line of support. The user interface also provides a support number or email for the Recordkeeper to provide participants with a number to contact with any questions. What email/phone number would you like to provide to the user in the UI. ☐​ Email: ☐​ Phone:

Testing

  • Please provide us with an overview of how your test environment is structured. Do you have one test environment or multiple test environments?

  • How will Morningstar access your test environment? Will Morningstar need to provide Client with any information in order to access the test region?

  • Does Client have the ability to set up test users in a QA/beta/UAT environment in order to complete manual, integrated testing between Client and Morningstar for Advisor Managed Accounts? ​☐​ Yes ​☐​ No

  • Approximately how far in advance does Client test before a project is rolled out to production? For example, if a new project would be rolled out on February 26, 2023, is testing for that project typically scheduled 4-8 weeks prior to the February 26, 2023 production go-live date?

  • Does Client have the ability to set up test users in a production environment to allow Morningstar to perform validation testing for the launch and ongoing regression testing post-launch? ​☐​ Yes ​☐​ No