O3's Daily Platform Frequently Asked Questions (FAQ)

What is the primary objective of the Market Return design?

Aligning the movement of plan benefits with that of plan assets is the key focus of the Market Return design. The results are quite remarkable, and include:

1. Far greater contribution stability which increases as the plan matures
2. Reduced exposure to unfunded liabilities
3. The potential for participants to capture excess investment returns.

What is the primary objective of October Three's Daily Valuation Platform?

The ability to track the relationship between plan assets and plan benefits throughout the year, and have distributions based on real time values is the key focus of the platform.

Can't I just use a daily DC valuation system?

No. Although a Market Return Cash Balance Plan looks and behaves like a DC plan, it is still a Defined Benefit plan. This means that assets and liabilities are not equal (like they are in a DC plan) and differences that arise during the course of a year must be recognized. For example, interest credits are applied to a participant's account based on the terms of the plan, not when cash is deposited to the trust. A DC system can only apply earnings to an account based on when the cash is deposited. Ignoring this basic DB feature can lead to significant exposure to the plan sponsor. Moreover, the idea of unallocated assets is a foreign concept in a DC plan while it is a necessary element in a DB plan. Because assets and benefit accruals must be in a DB plan, independent of a record keeping system that treats assets and benefit accruals as the same, it cannot provide accurate accounting. Beware if someone tells you otherwise and says their DC system can be used as you are likely to have significant problems that will jeopardize the status of your plan.

Do I need to retain O3 as an actuary if I use the Platform?

No you don't. You can continue to use your current actuary if that is your preference. However, there are advantages to having October Three provide actuarial and compliance testing services once your plan is up and running on the Platform.

Can I use the platform if my plan is not a market return design?

Yes. O3's Daily Platform provides tremendous value even to cash balance plans that have not adopted a Market Return design. You will still get value out of daily updates to the plan's asset values. This will provide those involved with the financial review of the plan enormous insights regarding the operation and the financial condition of the plan. Moreover, since the platform will update participant accounts daily with the fixed interest crediting rate benefit distributions and participant communications is greatly simplified (and automated). And, as plan sponsor, you will enjoy all the automated features of the platform that will simplify administration and allow you to take more control over the plan's operation.

Do I need to invest in daily valued investments?

Not necessarily - we will always pull the most recent value provided by the Custodian. However, in order to realize the maximum value of the Platform, it is ideal to have values updated as frequently as possible - with daily being the preferred mode.

Do I need to purchase participant access...or can I just use the platform to determine daily values?

We understand some plan sponsors will see the value of daily updates, but for whatever reason may not be interested in certain features of the Platform, such as allowing participant access, linking with your DC record keeper or providing the ability to run detailed benefit projections. We provide a variety of service levels to suit your specific needs - from the basic ‘engine-only' offering to the comprehensive participant experience.

How long does it take to go live?

A standard implementation will run between 90 and 120 days. Generally, this is done coincident with the preparation of plan documents or amendments reflecting daily updates, so there may be little or no lag in going live on the Platform once the plan is ready to go.

How much can I customize the participant site?

The Platform will be branded specifically for your company. While we do allow additional customization, the Platform reflects our collective experience in supporting plan sponsors.

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