Employee Benefits - Products and Services

 

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Employee Benefits - Products and Services

A defined benefit plan is the "traditional" work-place pension plan. Benefits are paid in the form of an annuity. The benefit is based on a formula, typically involving salary and length of service. Most private-sector pensions are financed entirely by the employer and are not "portable" from job to job. Chemical Bank clients and their actuaries who offer this type of retirement benefit receive investment management from our Investment Management Team, payment services for retirees and federal tax withholding.

A defined contribution plan guarantees no ultimate benefit at all. Rather, it is financed with contributions from employees and/or employers. Participants generally control how the contributions are invested (within a limited range of options), which gives him or her more control over how the funds are invested. These benefits can be "rolled over" upon leaving a job. The most common and well-known type of plan is the 401(k) plan. There are other plans including 403(b), Profit Sharing and Money Purchase. Chemical Bank offers a variety of plan styles and participants enjoy a full range of investment choices where participant-direction is allowed.

Keogh plans are tax-deferred retirement accounts for self-employed workers or persons employed by unincorporated businesses. Chemical Bank responds to the needs of the self-employed individual with a range of possible plan types—from the simplicity of a Simplified Employee Pension (SEP) Plan all the way up the ladder to the comprehensiveness associated with a Single Participant Defined Benefit (DB) Pension Plan. Talk with one of our employee benefit professionals about your needs and Chemical Bank’s ability to meet them.

A Rollover Individual Retirement Account (Rollover IRA) allows a person to “rollover” benefits from another IRA or qualified plan to another tax-deferred account where they have more control and flexibility over the management of assets. Direct rollovers are a tax-free way to move assets from an employer based retirement plan to your own plan. Typically rollovers occur when one leaves a job or retires. Ask your human resource representative at work if your distribution is eligible for a direct rollover. They will have forms or be able to direct you where to obtain forms to make the distribution possible.

Your Rollover IRA at Chemical Bank will either be Self-Directed, Limited Option Managed or Fully Managed, depending on the degree of investment management service desired.

A Pre-Need Escrow Account is an account where Chemical Bank has agreed to serve as “Escrow Agent” and is responsible for the management and investment of funds received from the sale of a Prepaid Funeral and Cemetery Contract in accordance with the requirements of the Prepaid Funeral and Cemetery Sales Act (Act 21 of the Public Acts of 2004). The “Contract Seller” is a funeral home or cemetery licensed to do business in Michigan and the “Contract Buyer” is the person or family member who has entered into the agreement for goods and services to be provided at death for one’s self or loved one. Funds are invested as specified in our agreement with the funeral home or cemetery.

Retirement Trust is a trusteed IRA that was specifically crafted to solve the needs of IRA account holders while simplifying the job of planning for tax deferred assets. The trust prohibits spousal rollovers and accelerated beneficiary withdrawals. As an IRA-approved trust, it "stretches" distributions over the beneficiaries' lifetimes instead of the five-year period that applies to non-qualifying trusts. It allows the IRA account holder, rather than the beneficiary, to designate the ultimate recipient of the assets. The trust limits distributions to the required minimum distribution but permits the Trustee to distribute more at their discretion.

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Radical market swings can have a tremendous upside for investors who have the discipline to “stay the course” and follow a long-term investment plan. To the seasoned investor, market volatility is just another word for opportunity. At Chemical Bank, we help our clients achieve their investment goals by offering a variety of investment choices for their retirement dollars. Here are a few:

Individual Securities
Whether in a retirement account that you manage or an account that you direct Chemical Bank to manage, use of individual securities (stocks, bonds and cash equivalents) is one approach available to you. It is important that in the selection of securities, one fully understands and evaluate the suitability of one investment versus another. Contact Employee Benefits to determine how Chemical Bank can assist you in mapping out a strategy for achieving your retirement goals.

Mutual Funds
The simplest reason for diversifying your portfolio is that no one can successfully predict market cycles. Every year, we will generally see a different asset class outperform another. One year it is large company stocks. The next year it may be bonds. Then small company stocks come out on top. Before you can even blink, foreign stocks are the winners. Since it is next to impossible to know the next top performer, a sound approach is to spread investments among different asset classes. Yes, you have heard the term before—diversification. One of the most efficient ways to achieve diversification is through the use of mutual funds. Mutual funds are used extensively in Chemical Bank retirement plans, especially where accounts are participant-directed. Contact a member of the employee benefits team to learn more about Chemical Bank Mutual Fund options.

Managed Models
There is another component to portfolio diversification which extends beyond the diversification that one achieves through a single mutual fund. And that is the combination effect that results by mixing asset classes together to create a diversified portfolio. The investment industry calls this asset allocation. Chemical Bank offers various managed modeled portfolios to assist its customers in achieving their retirement goals. Some models are more heavily focused on growth; some on income; while still others combine growth with income. Whatever your goal, and we are prepared to assist you in determining yours, Chemical Bank has a portfolio designed to meet your needs. Call us today and let our Employee Benefits professionals guide you in determining your willingness and ability to take risk. Remember, with investments one does not totally eliminate risk…one manages risk. Let the Chemical Bank advantage work for you.