Mutual of Omaha Retirement Services Open Architecture 2.0

I n C o n j u n c t i o n w i t h C a l l a n A s s o c i a t e s I n c .

AFN46398

Open Architecture

• Popularity of Open Architecture 80% of 401(k) advisory firms offer open-arch

platforms

• Benefits and Challenges • Opportunities through due diligence

Information Overload

Build Your Own Bundle

• Alliance Bernstein• PIMCO• John Hancock• Franklin Templeton• MFS• Stadion• Morningstar• T. Rowe Price• Waddell & Reed• Lord Abbett• Goldman Sachs• Vanguard

• Allianz• Blackrock• Wells Fargo• Dodge & Cox Funds• The Royce Funds• Cohen & Steers• Harbor Funds• Causeway Funds• Oppenheimer Funds• SSGA• Met West• William Blair Funds

Open Architecture Obstacles

• Time• More work

Select Monitor Generate reports

• Risk• Fiduciary Responsibility• Technology

Advantages of Open Architecture

• Access to wide variety funds/asset classes

• Allows for diversified risk• Can lower fees through

competition• Allow for easy growth• Ability to showcase value

added process through fund selection

Mutual of Omaha Retirement Services Open Architecture 2.0

• Consider a different approach Select from vast universe of diverse funds Extensive due diligence selection/monitoring Fiduciary protection Diversifies risk through established lineups Save time & money

Fund Selection and Oversight

• Callan Associates and Mutual of Omaha’s Investment Manager Oversight Committee (IMOC)

• Callan is third-party strategic asset consultant• Formal search process with five basic steps:

• Establish search criteria• Develop list of initial candidates• Quantitative and Qualitative screening• Perform peer review and select semi-finalists• Conduct finalist presentations and select manager/fund

Introduction to Callan

• Utilizes multiple methods of due diligence collecting both qualitative and quantitative data

• Over 40 years in the investment industry• Responsible for nearly $2 trillion in assets

Mutual of Omaha Retirement Services Open Architecture 2.0

Product Level Due Diligence

• Every search starts from scratch

• Backed by extensive due diligence/18 senior consultants

• Over 30 CFA charterholders

• Disciplined and consistent

• Utilizes peer review (Manager Search Committee) to ensure quality control

• Identification of managers and funds best fit for the investment program

The Process

The Outcome:

Global Manager Research By the Numbers

Global ManagerResearch Database

• Proprietary database and analytics

• Searches are client-driven, customized and disciplined

• Oversight committee for manager searches

22 Specialty Consultants3 Support Analysts9 CFA and/or CAIA charterholders7 Masters degrees

703 Manager Searches completed over the last 5 years$150 bn Assets represented

by these searches

1,110 Average number of manager meetings per

year2300+ Organizations tracked in

proprietary database6500+ Unique products tracked in

proprietary database20,000+ Individual investment

vehicles tracked in proprietary

database

Qualitative Analysis Quantitative Analysis

Philosophy/Process

What is the firm’s investment philosophy and process? Has it remained consistent over time?

Historical Performance

How has strategy performed relative to peers and benchmarks over various measures and time periods? (cumulative, calendar year, rolling periods, rising/declining markets, stylistically extreme periods).

Performance

Is there a rational explanation for periods of large out/underperformance?

Risk Adjusted Returns

Have the returns generated by the portfolio been in line with the risks being taken?

People/Organization

What are the investment professionals’ qualifications and experience?

Portfolio Characteristics

How do these characteristics compare to peers and to stated benchmarks? Does this help explain historical performance patterns given market environment?

Portfolio Construction

How are portfolios constructed and what are the parameters?

Attribution

What are the sources of relative performance? Is this consistent with stated philosophy, process, and objectives?

Approach to Manager Research

Advantages of Working with Mutual of Omaha Retirement Services

Open Architecture 2.0

Fiduciary Support

• Product level Callan Associates

• Plan level Mesirow Financial

• Participant level Non-proprietary QDIA Continuum options

Plan-level Due Diligence

ERISA Section 3(21) selection and monitoring co-fiduciary service Full discretionary ERISA Section 3(38) Investment Manager service Reviews all the funds and provides fiduciary coverage for funds on

the Elite and Guideline lists Provides ongoing fund monitoring and reporting

• Mesirow Financial Fiduciary Partnership Service

A separate agreement is required for services from Mesirow. Additional fees apply.

Mesirow Financial InvestmentManager Due Diligence

• Combines quantitative screens/qualitative analysis• Mesirow Financial POLICE Report®

– Performance– Organization– Legal– Investment Policy– Consistent Style– Expenses

• Quarterly marketing commentary and fund fact sheets

QDIA Options

• Four QDIA options (all non-proprietary):

– Target Date Funds:

• Vanguard Target Retirement Funds

• GlidePath Retirement Series

– Individually Managed Accounts:

• Stadion Money Management

• Morningstar® Retirement ManagerSM

Build your Bundle withMutual of Omaha Retirement Services

• Organized investment oversight for you

• Differentiates service model

• Scalable / repeatable• Saves you time

Disclaimers and Important Information

Investment options are offered through a group variable annuity contract (Forms 902-GAQC-09 or 902-GAQC-09(CT) or 902-GAQC-09(OR)) underwritten by United of Omaha Life Insurance Company for contracts issued in all states except New York. United of Omaha Life Insurance Company, Omaha, NE 68175 is licensed nationwide except in New York. Companion Life Insurance Company, Hauppauge, NY 11788 is licensed in New York and underwrites the group variable annuity (Form 900-GAQC-07(NY)). Each company accepts full responsibility for each of their respective contractual obligations under the contract but does not guarantee any contributions or investment returns except as to the Guaranteed Account and the Lifetime Guaranteed Income Account as provided under the contract. Neither United of Omaha Life Insurance Company, Companion Life Insurance Company, nor their representatives or affiliates offers investment advice in connection with the contract.

Specific features of the Lifetime Guaranteed Income Account (Rider Forms 651-GAQR-10 or 651-GAQR-10(CT) or 651-GAQR-10(OR)) vary by state. Restrictions apply. The Lifetime Guaranteed Income Account is not available in Nevada or New York.

Group variable annuities are long-term investment vehicles designed to accumulate money on a tax-deferred basis for retirement purposes. Distributions may be subject to ordinary income tax and, if taken prior to age 59 ½, a 10 percent federal tax penalty may apply. Investing in a group variable annuity involves risk, including possible loss of principal.

Investments in target date funds are subject to the risks of their underlying funds. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the work force. The fund will gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date. The principal value of the fund(s) is not guaranteed any time, including on or after the target date.

For producer use only. Not to be used with any plan sponsor or participant

Disclaimers and Important Information

Mesirow Financial is not affiliated with Mutual of Omaha and its affiliates.  Mesirow Financial refers to Mesirow Financial Holdings, Inc. and its divisions, subsidiaries and affiliates.  The Mesirow Financial name and logo are registered service marks of Mesirow Financial Holdings, Inc. ©2014, Mesirow Financial Holdings, Inc.  All rights reserved. Advisory services offered through Mesirow Financial Investment Management, Inc. an SEC Registered Investment Advisor. 

Callan Associates, Inc. is not affiliated with Mutual of Omaha and its affiliates.

Stadion Money Management, LLC is not affiliated with Mutual of Omaha and its affiliates.

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