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National Plans Council Update. Cynthia Egan, President, T. Rowe Price Retirement Plan Services, Inc. Jamey Delaplane, partner, Davis & Harman, LLP. T. Rowe Price Business Update. - PowerPoint PPT Presentation
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T. Rowe Price, Invest With Confidence and the Bighorn Sheep logo is a registered trademark of T. Rowe Price Group, Inc.
Proprietary and Confidential
National Plans Council UpdateCynthia Egan, President, T. Rowe Price Retirement Plan Services, Inc.
Jamey Delaplane, partner, Davis & Harman, LLP
T. Rowe Price Business Update
• T. Rowe Price has a strong balance sheet, NO DEBT with substantial liquidity, including case and mutual fund investment holdings of $1.1 billion*
• AUM down one-third from their peak of $400 billion at the start of 2008 to $268.8 billion*
• Focused on one business• We’re still reinvesting in the future of the company• Retirement Plan Services Update
• Participants remain steady• Deferrals remain above 7%• < 4% are making changes (loans, deferrals, balance exchange, contribution
allocation)• Company match changes about 7%, most are temporary
*as of 3/31/2009
Managing Costs at T. Rowe Price
• Workforce reduction
• 5.5% or 288 associates
• 76 associates in RPS/RPS Ops
• Philosophic approach
• Through attrition, retirements, and the workforce reduction, total staffing is now down 8.6% from the beginning of the year.
• Total expense savings could reduce 2009 operating expenses by as much as $120 million from the 2007 level of spending.
• Advertising and promotion 25% lower than 2008
• Consulting and professional fees, travel and related costs and other third party services down 25% from Q1 2008
• Deferring hiring
• Deferring occupation of new buildings
• WorkSmart Initiative
• Partnering with clients on electronic delivery
The Focus in Washington
Key Players
• Centers of Power in Democratic Washington• President Obama
• House Speaker Pelosi and Key Committee Chairmen Lieutenants
• Senate Moderates of Both Parties
• Key Obama Administration Retirement Policy Players• Department of Treasury: Mark Iwry, Deputy Assistant Secretary for Tax Policy – Health and
Retirement Policy
• Department of Labor: Phyllis Borzi, Assistant Secretary for Employee Benefits Security Administration
• House Retirement Policy Players• Chairman Miller (D-CA) of House Education & Labor Committee is Dominant Force
• Watch Rep. Richard Neal (D-MA) of House Ways & Means Committee
• House Republicans Have Little Ability to Influence Agenda
• Senate Retirement Policy Players• Chairman Baucus (D-MT) of Senate Finance and Chairman Kennedy (D-MA) of Senate HELP
• Senior Committee Republicans Also Important – Grassley (Ginance) and Enzi (HELP)
The Focus in Washington
Hot Topics
• Fee Transparency
• Target Date Funds
• Expanding Retirement Savings Coverage
• Promoting Lifetime Income/Annuitization
• Other Topics• Tax Incentives for Retirement Savings
• Investment Advice
• Nonqualified Deferred Compensation