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BMO Retirement Services White Paper: Into-Plan Rollovers Provide Benefits of Consolidation

Second Report of Defined Contribution IQ(TM) Series Details Cost-Effective Steps Plan Sponsors Can Take to Attract Rollovers, Improve Participant Outcomes

CHICAGO, IL -- (Marketwired) -- 06/19/14 -- BMO Retirement Services today released a white paper, "BMO Defined Contribution IQ™: Rollovers," the second paper in a nine-part, bi-monthly educational series entitled Defined Contribution IQ, or DC IQ™. BMO's award-winning retirement plan recordkeeper developed this series for plan sponsors and their consultants; each edition addresses a specific issue related to improving 401(k) plans. The first three papers in the series are devoted to plan design.

The latest white paper examines one of the most often-overlooked ways that plan sponsors can help their employees get the most out of their 401(k) plan -- encouraging them to roll over their previously accumulated savings into their current employer-sponsored retirement plan.

Consolidation of participant account balances can have a dramatically positive impact on retirement outcomes by:

  • Reducing the potential for prematurely cashing out
  • Lowering investment costs for participants
  • Providing professional oversight at no additional fee
  • Allowing for easier, more accurate retirement income projections

"The average worker today will work for five to seven employers during his or her lifetime, so the flexibility to transfer retirement savings is extremely valuable," said Todd Perala, series author and Director of Strategic Initiatives, BMO Retirement Services, BMO Global Asset Management. "We believe that if plan sponsors can help participants consolidate their retirement saving as they are on-boarded, then employers are really offering the potential for a better retirement to their employees -- and doing it in a very economical manner."

The paper also outlines ways in which plan sponsors can encourage rollovers into their companies' 401(k). These steps include making sure their new employee enrollment kits thoroughly explain the benefits of consolidation and include easy-to-understand instructions for the process and a user-friendly rollover form. Additionally, employers should consider adding an outbound communications program targeting rollovers, and making sure their recordkeeper's call center is ready, willing and able to assist participants throughout the entire process.

Mr. Perala urged plan sponsors to structure their 401(k) plans to support periodic payments for participants who wish to leave their savings in the plan after they retire, even if it means modifying their plans' current designs. "This gives retirees a straightforward way to turn their retirement savings into an income stream that replaces their paycheck."

To read the full white paper, visit: www.bmo.com/dciq.

For more information about BMO Retirement Services, please visit: www.bmoretirementservices.com.

About BMO Retirement Services
BMO Retirement Services is an integral part of BMO Global Asset Management and a premiere, award-winning provider of retirement services. We have been recognized as a national provider of both defined contribution recordkeeping and defined contribution investment-only services by the National Association of Plan Advisors.

BMO Global Asset Management provides holistic, solution-driven services to our institutional and high-net-worth clients. With a 40-year legacy of fiduciary service -- and goal of promoting retirement readiness to our more than 500,000 participants in over 1,000 retirement plans -- our clients include retirement plans, Taft-Hartley funds, government and public funds, not-for-profit organizations and family offices. BMO Global Asset Management's commitment to service excellence has led us to be recognized by Pension & Investments as one of the Top 100 largest asset managers.

We are a part of BMO Financial Group (NYSE: BMO), a fully diversified financial services organization with CA$582 billion total assets and more than 45,500 employees as of April 30, 2014.

Disclosures
BMO Retirement Services is a part of BMO Global Asset Management and a division of the BMO Harris Bank N.A., offering products and services through various affiliates of BMO Financial Group.

BMO Global Asset Management is the brand name for various affiliated entities of BMO Financial Group that provide investment management, retirement, and trust and custody services. Certain of the products and services offered under the brand name BMO Global Asset Management are designed specifically for various categories of investors in a number of different countries and regions and may not be available to all investors. Products and services are only offered to such investors in those countries and regions in accordance with applicable laws and regulations. BMO Financial Group (NYSE: BMO), is a service mark of Bank of Montreal (BMO).

All investments involve risk, including the possible loss of principal.

Investment products are: Not FDIC Insured | No Bank Guarantee | May Lose Value

©2014 BMO Financial Corp.

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