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Conflicts relating to fund recommendations: The Services operate by recommending or allocating a user's assets to <br />funds available within a plan. The funds available for EAG's recommendations within a plan are generally estalell shed <br />by the plan sponsor/client through which the Services are delivered, rather than by EAG. In some cases, the <br />Investmentoptlons may Include or be comprised solely of Investmentoptlons sponsored by EAG's affiliates. mother <br />cases, the Investment optlons may make third party payments described below. When this occurs, LAG's affiliates <br />may receive additional compensation as a result of EAG's recommendations or allocations. These forms of <br />additional afflllate compensation are: <br />• Proprietary Investment funds. EAG's affiliates offer proprietary Investment funds, and EAG may <br />recommend or allocate your assets be our affiliates' proprietary Investment funds, Including proprietary <br />r mutual funds and collective Investment trusts. These proprietary Investment funds generate additional <br />S Investment management fees to EAG's family of companies. This Is because EAG's affiliates provide <br />f Investment management services to the proprietary fund for services like administering, managing, and <br />supervising these funds, For example, a plan particlpant using the Services will pay advisory fees to EAG <br />and Indirectly to ECM if Empower Funds are Included In the retirement plan Investment optlons, and EAG <br />recommends an allocation to a Empower Funds product. The fees paid to ECM for management of the <br />Empower Funds are Included in the fund share price. <br />• Proprietary Insurance products. EAG's parent company, LAIC, offers proprietary Insurance products for <br />Investment. EAG may recommend or allocate your assets to dlfferenttypes of LAIC Insurance products and <br />a funding agreements. The rnujorlty of LAIC Insurance products are annuity contracts that are structured <br />y either as a general account product or as a separate account product. If you Invest in a general account <br />product, which is an Insurance product backed by the general account of an insurance company, EAG's <br />afflllates generate revenue by retaining spread (which Is the difference between actual earnings on <br />contracts offered by the fnsurer), and the crediting rate declared and guaranteed by the Insurer through <br />the contract. EAG's affiliates may also receive different types of fee Income if you invest in the general <br />account or separate account products, and other thtrd-parry payments associated with Investments held <br />In the separate. account. <br />• Third Parry Payments.EAG'safffllate, may receive paymentsfrom other firms,non-propnetery investment <br />funds or products, or providers, such as revenue sharing payments, In connection with the investments <br />made pursuant to our recommendation or investment management. <br />ConFlices related to increased use and promotion of the Services. <br />a Increased advisoryfee income. EAG's representatives may recommend that you use the Services. If you <br />enroll In certain Services, EAG will earn additional compensation. <br />• Increased afflliatefee income. When you use the Services, FAG may recommend you Increase contributions <br />or utilize other savings or investment strategies. EAG's afflllates provide a bundle of record kee p in g, trust, <br />custody, brokerage, Investment, and other related services to retirement plans. If you pay for these related <br />- .... services through an arrangement where our affiliates charge a direct fee, EAG's affiliates may receive <br />additional fees for theseservlces. These additional fees resultfrom EAG's recommendations because you <br />may contribute, Invest, or transact in more assets with EAG's family of companies. <br />• Representative Compensation: EAG has authorized EFSI, an affiliate of EAG, and Its licensed agents and <br />registered representatives wheats Empower employees (collectively referred to as Agents) to sollcit, refer <br />and market EAG's services. In addition to their salary, Agents may earn bonus compensatlon based upon <br />engaging plan sponsors to offer EAG's services. Other Agents and EAG representatives may be Indirectly <br />compensated through bonus, compensation, In addition to their salary, for communication, education <br />and/or assisting participants to enroll In EAG's Services. Compensation pald to Agents or EAG <br />representatives does not Increase the fees pald by the plan, plan sponsor or participants. The incentive <br />compensation an EAG representative recefves depends on position type, butgenerally is calculated based <br />on Empower and/or LAIC profltab11Ry and the achievement of Individual performance goals that me <br />Include factors unrelated to an account holder's adoption of Investment products or services offered <br />through Empower. <br />15 <br />City Council 19 — 93 9/19/2023 <br />