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C O N F I D E N T I A L

Prepared for:

Sample Client

August 28, 2009

Fiduciary Plan Review

Presented by: Michael E. Morris

Director Institutional Consulting

Ross, Sinclaire & Associates 700 Walnut Street, Suite 600 Cincinnati, OH 45202 Ph: 513-381-3939 www.rsanet.com .

Table of Contents

I. INTRODUCTION ............................................................................................... PAGES 1-5

II. FIDUCIARY EDUCATION ............................................................................... PAGES 6-11

III. PLAN DEMOGRAPHICS AND DESIGN ....................................................... PAGES 12-18

IV. BEST PRACTICES & COMPLIANCE ........................................................... PAGES 19-46

V. CONCLUSION .............................................................................................. PAGES 47-49

Retirement Plan Advisory Group Fiduciary Plan Review / ABC COMPANY 0209 1

Retirement Plan Advisory Group Mission Statement

Retirement Plan Advisory Group is an independent qualified

retirement plan consulting firm that helps protect plan fiduciaries

from personal and corporate financial liability, while enhancing

investment opportunities and helping plan participants

achieve financial security.

Through our comprehensive network of value-added

services and professional consulting expertise, we deliver

on our mission each day to create ongoing successful

retirement plan experiences for employers and employees.

Retirement Plan Advisory Group is an independent qualified

retirement plan consulting firm that helps protect plan fiduciaries

from personal and corporate financial liability, while enhancing

investment opportunities and helping plan participants

achieve financial security.

Through our comprehensive network of value-added

services and professional consulting expertise, we deliver

on our mission each day to create ongoing successful

retirement plan experiences for employers and employees.


Retirement Plan Advisory Group Overview of Services

We enhance investment opportunities through dedicatedand ongoing Investment Analysis utilizing 15+ quantitative and qualitative metrics.

We enhance investment opportunities through dedicatedand ongoing Investment Analysis utilizing 15+ quantitative and qualitative metrics.

• Investment Analysis Reports

• ScorecardSM Fund Ranking

• Asset Allocation Models

• Quarterly Market Update

• Investment Analysis Reports

• ScorecardSM Fund Ranking

• Asset Allocation Models

• Quarterly Market Update

We guide participants on the benefits of the 401(k) plan and promote better understanding of investments through hands-on Advice and Education.

We guide participants on the benefits of the 401(k) plan and promote better understanding of investments through hands-on Advice and Education.

We save companies and participants money by conducting detailed Fee Benchmarkings to ensure total plan costs are relative to services received.

We save companies and participants money by conducting detailed Fee Benchmarkings to ensure total plan costs are relative to services received.

We protect fiduciaries from personal and corporate financial liability and help maintain Plan Compliance through documented, proven Due Diligence processes.

We protect fiduciaries from personal and corporate financial liability and help maintain Plan Compliance through documented, proven Due Diligence processes.

• Investment Education Meetings

• One-On-One Guidance

• Sample Memos

• Bi-lingual Consultants

• Investment Education Meetings

• One-On-One Guidance

• Sample Memos

• Bi-lingual Consultants

• Service Provider Comparison

• Total Cost Analysis

• Investment Rankings

• Provider Contract Review

• Service Provider Comparison

• Total Cost Analysis

• Investment Rankings

• Provider Contract Review

• Investment Policy Statement

• 404(a)/404(c) Guidance

• Fiduciary Plan Review

• Plan Design Analysis

• Investment Policy Statement

• 404(a)/404(c) Guidance

• Fiduciary Plan Review

• Plan Design Analysis


Retirement Plan Advisory Group Client Service Plan

Other Service

Meetings

Other Service

Meetings

MonthlyMonthlyEmployee memos for Plan Participants

MonthlyMonthlyClient newsletters for Retirement CommitteeNewsletter and

Memos MonthlyMonthlyEmployee memos for Plan Participants

MonthlyMonthlyClient newsletters for Retirement CommitteeNewsletter and

Memos

Individual employee education meetings

Group employee education meetings

Individual employee education meetings

Group employee education meetings

Last RFP in 20072010Analysis of incumbent provider costs and services

compared to bidding service providersLast RFP in 20072010

Analysis of incumbent provider costs and services

compared to bidding service providers

NovemberFiduciary Best Practices and administrative

compliance review

February 11February Plan Design Review

May 26MayFiduciary Education

February 11FebruaryReport Card Reviewed and Completed

NovemberFiduciary Best Practices and administrative

compliance review

February 11February Plan Design Review

May 26MayFiduciary Education

February 11FebruaryReport Card Reviewed and Completed

February 11

May 26

August 6

February

May

August

November

Market Review, Investment Policy Statement,

Scorecard Methodology, Fund Scores and

Recommendations

February 11

May 26

August 6

February

May

August

November

Market Review, Investment Policy Statement,

Scorecard Methodology, Fund Scores and

Recommendations

History/

Comments

Actual

Delivery Date

Scheduled

Delivery MonthDescriptionService

History/

Comments

Actual

Delivery Date

Scheduled

Delivery MonthDescriptionService

Other Service

Meetings

Employee

Communication

RFP Analysis and

Benchmarking

Investment

Review

Fiduciary

Fitness Program

Newsletters and

Memos

Updated: August 6, 2009 Updated: August 6, 2009 Service Year: 2009Service Year: 2009


Fiduciary Fitness Report Card

Action Items Reference Materials Documentation Requirements

Met Comments

Fiduciary Education Reference Guide: Section 2

All Education Modules Education Module Checklist

Yes

No

Selecting and Monitoring

Fiduciaries

Identifying and Monitoring

Parties in Interest

Reference Guide: Section 3

Education Modules 1, 2 & 3

Documenting Fiduciaries, Consultants and Service Provider Responsibilities Yes

No


Education Modules 1, 2 & 3


Service Providers


Education Modules 4 & 5

Selecting and Monitoring: Consultants, Plan Providers, Auditors

Vendor Analysis & Benchmarking

Compensation Disclosure

Yes

No


Plan Investments Education Module 6

Investment Policy Statement Yes

No

Investment ScorecardSM

Yes

No

§404(a) & §404(c)

Compliance


Education Module 7

§404(a) & §404(c) Checklist Yes

No

§404(c) Notice & Policy Statement

Yes

No

Maintaining a Fiduciary File Reference Guide: Section 4

Education Module 8

Maintaining Your Fiduciary File Checklist

Yes

No

Investing in Employer

Securities


Education Module 9

§404(c) Notice and Policy Statement Addendum

Yes

No

N/A

Consider Hiring Outside Independent Fiduciary to Handle Securities

Minimizing Risk:

Fidelity Bond and

Fiduciary Insurance


Education Module 10

Copy of Bond Yes

No

Copy of Policy Yes

No

Claims and Appeal

Procedures


Education Module 11

Documentation of Claims and Appeals (actual events)

Yes

No

Plan Demographic and

Document Review


Education Module 12

Annual Plan Review

Sample Notices: ACAs, QACAs and EACAs, Initial QDIA, Annual QDIA , Safe Harbor and Summary Annual Report

Yes

No

Prohibited Transactions Reference Guide: Section 7

Education Module 13

Yes

No


Online Report Access Retirement Plan Advisory Group clientele are offered the ability to gain access to our virtual client portal, known as the Fiduciary Briefcase. Plan

sponsors access this system through www.retirementplanadvisorygroup.com using their secure User ID and Password.

Through this portal, we make pertinent plan data available to plan fiduciaries to help them better manage their plan, and organize their fiduciary file in case of an audit. Examples of resources available to our clients are:

Fiduciary Investment Reviews

Investment Policies and Guidelines

Meeting Minutes and Service Plans

Quarterly Market Commentaries and Plan Sponsor Newsletters

General Retirement Education and Communications

Vendor Analysis and Annual Plan Reviews

Organization of their Plan’s file

Daily Access to Plan Information

Investment Education Information for Investment Committees

Fiduciary Liability Management and Instant Preparation for

Plan Audits


Fiduciary Update

Fiduciary Fitness Program: Fiduciaries

Fiduciary Defined

A fiduciary is

Any individual or entity that has, or exercises discretionary control over the management of the plan or the plan’s

assets

A plan may have

More than one fiduciary

An individual serving in more than one fiduciary capacity

A fiduciary is not

Anyone who performs ministerial functions and does not have the authority to make decisions with respect to

plan policies, procedures, etc.

Example: Individual who calculates benefits or processes claims

Functional vs. Non-Functional

The fiduciary test is a functional one

You’re a fiduciary if

No expressed appointment or delegation of fiduciary authority, but is functionally considered in control or in

possession of authority over the plan’s management, assets, or administration

Example: members of the Employer’s Board of Directors/Trustees with power to exercise discretion and control

May include non-board & non-voting members


Fiduciary Update (continued)

Functional vs. Non-Functional Duties

Named Fiduciaries

Each plan must have one “named fiduciary”

These are named in or identified with a procedure prescribed in the plan document

May be the: plan sponsor, officer, Board of Directors/Trustees or member of the management team

Can allocate responsibilities to others if plan document permits

Functional Duties Include

Implementing plan related decisions

Carrying out processes and procedures in regard to plan management

Acts carried out on behalf of the plan

Selection of provider, investments or investment manager

Functional Duties Include

Implementing plan related decisions

Carrying out processes and procedures in regard to plan management

Acts carried out on behalf of the plan

Selection of provider, investments or investment manager

Non-Functional Duties

Decision to establish a plan

Include plan features Terminate a plan Business decisions in

regard to a plan

Non-Functional Duties

Decision to establish a plan

Include plan features Terminate a plan Business decisions in

regard to a plan



Co-Fiduciaries

Co-fiduciaries are those to whom named fiduciaries allocate their responsibilities in an effort to better manage the plan

Fiduciaries are not liable for

Acts and omissions related to those responsibilities, but do have the duty to monitor the co-fiduciaries’

performance

Acts and omissions related to allocated person or entity

Named fiduciary has a responsibility to monitor performance of allocated responsibilities

Co-Fiduciary Liability

Co-fiduciaries’ liability includes duties delegated to them by named fiduciary, plus those of another if

Knowingly participates/undertakes to conceal an act or omission of another fiduciary

Enables another to commit a fiduciary breach

Has knowledge of a committed breach and fails to make a reasonable effort based to remedy the breach

Individual co-fiduciaries may bear the majority of liability with overall plan management and performance

Board of Director/Trustees

Board of Directors/Trustees are fiduciaries only to the extent that they function as fiduciaries (i.e., exercise discretion

and control)

If delegate authority, responsibility and liability are limited to selection and retention of fiduciaries unless individual

becomes liable under co-fiduciary rules

Must monitor performance of Co-Fiduciaries



Benefit/Investment Committees

Benefit/Investment Committees are fiduciaries if allocated fiduciary responsibilities

Best practices to adopt Committee Charter

Written minutes should describe issues discussed, action taken and how each member voted

Members can resign in protest to a fiduciary breach of another member on the committee

Resignation may not be sufficient to discharge reasonable efforts to remedy duties

Other steps may be necessary

Trustees and Fiduciaries

Trustees are fiduciaries

Trustees should carefully document all meetings where actions are taken with respect to plan management and control

Written minutes should describe actions taken and how each trustee voted

Members can resign in protest to a fiduciary breach of another co-trustee

Resignation may not be sufficient to discharge reasonable efforts to remedy duties

Other steps may be necessary



Other Fiduciaries

Employees are generally not plan fiduciaries, but can be depending on individual facts and circumstances

An Investment Manager is a fiduciary if manager meets ERISA §3(38) requirements

Must be a bank, insurance company or Investment Adviser registered under the Investment Advisers Act of 1940

Manager must acknowledge it is a fiduciary in writing

Generally, a professional trustee for a retirement plan is also an investment manager

Attorneys, Accountants, Actuaries, Consultants

Generally these professionals performing their usual professional functions are not fiduciaries

However, they are considered a fiduciary if they express discretionary authority or control over the management of the

plan, or render investment advice for a fee

In practice, many consultants, attorneys and third party administrators become fiduciaries when plan fiduciaries rely on

their advice when making fiduciary decisions



Individuals Prohibited from Fiduciary Role

Individuals are prohibited if they have been convicted of, or been imprisoned as a result of said conviction for

Conclusion

Plan sponsors must select and monitor Fiduciaries for their plan

Selection should be based on experience and expertise, not title

It is also important to monitor the interactions between the plan and Parties in Interest

Fiduciary Fitness Program helps make it easier to monitor all parties involved with the plan and bring the necessary

procedural prudence and documentation ERISA and the DOL require

Robbery

Bribery

Extortion

Fraud

Embezzlement

Grand larceny

Kidnapping

Robbery

Bribery

Extortion

Fraud

Embezzlement

Grand larceny

Kidnapping

Burglary

Arson

A felony involving illegal substances

Murder

Rape

Violation of §302 of Labor-Management Relations Act

Burglary

Arson

A felony involving illegal substances

Murder

Rape

Violation of §302 of Labor-Management Relations Act

Crimes barring individual from serving as an investment adviser

Violation of any ERISA provision

Violation involving kickbacks from public works

Violation of federal mail prohibitions

Crimes barring individual from serving as an investment adviser

Violation of any ERISA provision

Violation involving kickbacks from public works

Violation of federal mail prohibitions


Plan Participation

Measuring Participation in Your Plan:

Our Plan Our Goal

last year current

% %

Figure 1. Participation Rates (by Plan Size)

81.987.6

83.6 85.277.5 76.8

0

20

40

60

80

100

All Plans 1 to 49 50 to 199 200 to 999 1000 to

4,999

5,000 +

Source: PSCA’s 51st Annual Survey of Profit Sharing and 401(k) Plans

Figure 2. Participation Rates by Industry (Average)

Accommodation and Food Services 48%

Administrative Support, Waste Mgmt, and Remediation Services 59%

Agriculture, Forestry, Fishing, and Hunting 55%

Arts, Entertainment, and Recreation 53%

Construction 57%

Educational Services 61%

Finance and Insurance 71%

Health Care and Social Assistance 61%

Information Services 62%

Management of Companies and Enterprises 64%

Professional, Scientific, Tech Services 66%

Manufacturing 64%

Mining 70%

Other Services 57%

Real Estate and Leasing 60%

Retail Trade 51%

Transportation & Warehousing 60%

Utilities 79%

Wholesale Trade 63%

Source: Fidelity Investments, Building Futures, Volume VIII


Deferral Percentage

Average Deferral Percentage:

Our Plan Our Goal

2007 2008

HCE: % % HCE:

NHCE: % % NHCE:

Figure 3. Average Deferral Rates (by number of participants)

Pre-Tax [401(k)] After-Tax [401(m)]

Plan Size (# of participants) HCE NHCE HCE NHCE

All Plans 7.0 5.6 3.1 2.5

1 to 49 7.8 6.5 * *

50 to 199 6.8 5.5 * *

200 to 999 7.1 5.8 3.6 2.9

1,000 to 4,999 6.9 5.3 3.3 2.5

5,000+ 6.5 4.8 2.8 2.4 Source: PSCA’s 51st Annual Survey of Profit Sharing and 401(k) Plans

*Indicates no data or insignificant sample size

Figure 4. Sample Deferral Rate Grid

AROR: Inflation: Assets: Replace: SSN at: SSN Ben: RROR: Retire: Term:

7.5% 2.8% * 75% 67 Avg. Est. 5% 67 80

INCOME: AGE: 20 25 30 35 40 45 50 55 60 65

25,000 0.3% 2.2% 4.6% 7.5% 11.4% 16.7% 24.4% 37.4% MAX MAX

30,000 1.7% 3.6% 6.1% 9.1% 13.2% 18.8% 27.0% 41.0% MAX MAX

35,000 2.7% 4.7% 7.2% 10.4% 14.6% 20.5% 29.2% 44.3% MAX MAX

40,000 3.4% 5.4% 7.9% 11.1% 15.4% 21.4% 30.2% MAX MAX MAX

45,000 4.0% 6.0% 8.6% 11.9% 16.3% 22.5% 31.7% MAX MAX MAX

50,000 4.5% 6.6% 9.3% 12.7% 17.3% 23.7% MAX MAX MAX MAX

55,000 4.9% 7.0% 9.7% 13.2% 17.9% 24.4% MAX MAX MAX MAX

60,000 5.2% 7.3% 10.0% 13.5% 18.2% 24.8% MAX MAX MAX MAX

70,000 5.8% 7.9% 10.6% 14.2% 19.0% MAX MAX MAX MAX MAX

80,000 6.1% 8.3% 11.1% 14.7% MAX MAX MAX MAX MAX MAX

90,000 6.5% 8.7% 11.5% 15.2% MAX MAX MAX MAX MAX MAX

100,000 6.8% 9.0% 11.9% MAX MAX MAX MAX MAX MAX MAX

120,000 7.2% 9.5% 12.4% MAX MAX MAX MAX MAX MAX MAX

150,000 7.6% 9.9% MAX MAX MAX MAX MAX MAX MAX MAX

CORE Assumptions:

* $

25

,00

0 (

retire

me

nt

asse

ts)

Source: Retirement Plan Advisory Group


Addressing Failed ADP/ACP Testing

Alternative Solutions to Consider:

Implement auto-enrollment (either traditional or an Eligible Automatic Contribution Arrangement (EACA))

Adopt Qualified Automatic Contribution Arrangement (QACA)

Add a non-qualified deferred compensation plan for your most highly compensated employees

Adopt safe-harbor match or contribution

Increase employer match

Recharacterize return of excess as either catch up contribution or as after-tax contribution, as appropriate

Perform mid-year testing

Refund excess to HCE (return of excess)

Change from current year to prior year testing and advising HCEs of maximum each year

Cap HCE deferrals

Review eligibility

Use permissive disaggregation in testing

Exclude HCEs from participating in the 401(k) plan

Contribute a qualified non-elective contribution (QNEC)

Contribute a qualified matching contribution (QMAC)

Institute employee campaigns/education


Non-Qualified Plans: A Solution to Many Qualified Plan Limitations

What type of Non-Qualified plan do you have currently?

Existing Plan:

Are you confident you have the best investments for your key employees?

Are you compliant with 409A?

Do you know the cost of your current program?

When was the last review of your NQ plan?

Are your “Golden Handcuffs” working?

New Plan:

Solution to attract, reward, and retain key employees

Fix 401(k) limitations

Allow HCEs to save more

Provides ER greater control of compensation for key employees

Allows executives to control when they pay their taxes

Would you be interested in implementing this type of plan?


Plan Design Summary

Type of Plan 401(k) Profit Sharing

Plan Name ABC Company

Plan Year 2009

Name & Date of Document February 2007

A. Eligibility Provisions pg.

Eligibility for Elective Deferrals (employee money)

Minimum Age:

Length of Service:

Hours:

Eligibility for Matching Contribution

Minimum Age:

Length of Service:

Hours:

Eligibility for Profit Sharing Contribution

Minimum Age:

Length of Service:

Hours:

Includes:

Figure 5. 401(k) Plan Eligibility by Company Size (by number of participants)

Eligibility Type All Plans <100 100-499 500-999 1,000-9,999 >9,999

Immediate 55.1 37.5 38.9 66.7 68.2 74.4

3 Months or 90 Days 11.8 15.6 15.9 7.1 10.1 5.8

6 Months or 1,000 Hours 9.9 17.2 10.6 9.5 6.1 4.7

1 Year 11 21.9 17.17 2.4 3.4 3.5

Other 12.2 7.8 16.8 14.3 12.2 11.6

Total 100.2% 100.0% 100.0% 100.1% 100.0% 100.0% Source: PSCA, 401(k) Profit Sharing Plan Eligibility Survey 2008


Plan Design Summary (continued)

B. General Design Features pg.

Excluded Employees

Predecessor Service

Plan Entry

Employee Savings Changes

Employee Savings Limit

Catch-up Provision

Rollover Permitted (IRA/403b)

Automatic Enrollment

PPA Safe Harbor:

Eligibility:

Escalation:

Default Deferral %:

Default Fund:

Roth 401(k)

Compensation Definition for Contribution Purposes



C. Contributions pg.

Traditional Safe Harbor Plan

Employer Match

Match Type:

Contribution:

Match Funding:

Add’l Year-end:

Discretionary Contribution

Job Classifications for New Comparability

Vesting Schedule:

Calculation:

Forfeitures

Figure 6. Common Fixed Matching Formulas

1.5

11.1

1.9

43.8

5.5

34.9

1.30

Less than $0.25 per $1.00

$0.25 per $1.00

$0.2-$0.50 per $1.00

$0.50 per $1.00

$0.50-$1.00 per $1.00

$1.00 per $1.00

More than $1.00 per $1.00

Source: PSCA’s 51st Annual Survey of Profit Sharing and 401(k) Plans

Figure 7. Most Common Match Formula by Industry

Agriculture, Forestry, Fishing 50% up to 6% of pay

Mining 50% up to 6% of pay

Utilities 50% up to 6% of pay

Construction 50% up to 6% of pay

Manufacturing 50% up to 6% of pay

Wholesale Trade 50% up to 6% of pay

Retail Trade 50% up to 4% of pay

Transportation, Warehousing 50% up to 6% of pay

Publishing, Broadcasting 50% up to 6% of pay

Finance, Insurance 50% up to 6% of pay

Real Estate, Rental Leasing 50% up to 6% of pay

Professional, Scientific Services 50% up to 6% of pay

Other Services 50% up to 6% of pay

Technology 50% up to 6% of pay

Healthcare 50% up to 4% of pay Source: Principal Financial Group, The Total View 2007



D. Withdrawals / Distributions pg.

Employee Loans

Cashout

Hardships

Normal Retirement

Early Retirement

In Service

Distribution Options

E. Other pg.

Trustees

Discrimination Testing Plan Year:

ADP: HCE– NHCE–

ACP: HCE– NHCE–

Method:

Corrective Actions

QNEC or QMAC

Bonding Requirement

Company Stock


Documenting Plan Fiduciaries, Consultants and Service Providers

In order to document fiduciaries and their responsibilities, complete the table below. Fiduciaries should be monitored periodically to ensure they are adhering to the responsibilities allocated to them and meeting those standards identified in the chart. The chart should be updated whenever there is a change in plan fiduciaries or their responsibilities.

Plan Name: ABC Company

Fiduciaries Name/Organization/Title Documented Responsibilities

Board Of Directors

Establish Retirement Committee

Select Fiduciaries of Plan

Create Committee Charter

Retirement Committee Committee Charter or Resolution

Plan Administrator (internal) Plan Document

Investment Manager (if applicable) Advisory Agreement

Consultant (Plan Level) Engagement or Advisory Agreement

Consultant (Participant Level) Advisory Agreement

Service Provider Service or Equivalent Agreement

Other (Auditor, Attorney, CPA, etc.) Engagement or Equivalent Agreement


Documenting Parties in Interest

In order to document fiduciaries and their responsibilities, complete the table below. Fiduciaries should be able to identify and monitor all Parties in Interest and their dealings with the retirement plan. The chart should be updated and kept current on an ongoing basis.

Plan Name: ABC Company

Party in Interest Name/Address

Plan Administrator

Trustee(s)

Board of Directors

Company Officers

Plan Actuary

Attorney(s)

Accountant and/or Auditor(s)

Investment Advisor/Manager(s)

Insurance Agent(s)

All Shareholders and their Percentage Ownership

Affiliated Entities of Plan Sponsor

Other (Auditor, Attorney, CPA, etc.)


Selecting and Monitoring Plan Consultants

The purpose of this section is to conduct the proper due diligence on your plan’s consultant and ensure they can meet your plan’s needs. Use the questions below to evaluate the objectivity of a consultant’s recommendations.

SELECTING AND MONITORING PLAN CONSULTANTS

Question Response

(1) What percentage of your total revenue is from retirement plan consulting?

(2) How many of your employees are dedicated to retirement plan consulting?

(3) What are the total qualified plan assets under management of the plan sponsors you serve?

(4) Does your firm or a related firm also offer third party administrative (TPA) services?

(5) How many clients do you serve in each of the following plan asset categories:

Under $2 million

$2 million to $10 million

$10 million to $25 million

Over $25 million

(6) Is your firm a registered investment advisor?

(7) If your firm is a registered investment advisor (RIA), does your ADV II provide written acceptance of your co-fiduciary status under ERISA?

(8) Does your firm provide a written retainer agreement or service contract detailing the services that you provide?

(9) Does your firm disclose all forms of compensation, including commissions, bonus payments, fees, revenue sharing and other forms of compensation? How is this information disclosed to us?


(10) How much E&O insurance does your firm have (per incident and aggregate annual coverage)? How many representatives are covered under this policy?

(11) Are the representatives from your firm that will be servicing us on an ongoing basis available for an on-site due diligence interview at your office?

(12) Do you employ a Chartered Financial Analyst (CFA) that will directly deliver services to our firm? If so, please describe how they will be delivering services and the qualifications and background of this individual.

(13) Have your investment materials been reviewed by FINRA? Is a copy of FINRA’s opinion letter available for our review?

(14) Have your investment materials been reviewed by an outside legal counsel for compliance with ERISA?

(15) What software and research tools does your firm use to prepare investment research reports for plan sponsors?

(16) How many individuals in your firm are available to provide group or individual employee education meetings for our employees?

(17) Please list the qualifications and process for the person(s) who will be responsible for delivering ongoing service to our plan:

Will our plan have a dedicated service rep with bottom-line accountability?

Industry experience

Number of customers serviced in their total block of business

Percentage of time representative dedicates to service (versus sales, marketing, etc.)


Selecting and Monitoring Service Providers The following questions are intended to assist plan fiduciaries in evaluating the objectivity of the recommendations provided, or to be provided, by a service provider.

SELECTING AND MONITORING SERVICE PROVIDERS

Question Response

(1) Has the plan been benchmarked in the last 3 years or more frequently depending on significant changes in your plan (asset growth, acquisitions, plan design, etc.)? If No, contact your Advisor to conduct a Benchmarking.

(2) Who is the current service provider?

(3) What are the current plan assets?

(4) What type of plan document is used (i.e., prototype, non-standard prototype, custom, or volume submitter)?

(5) What are the current administration charges?

(6) What are the current asset charges?

(7) Where are all fees (direct and indirect) disclosed and are they disclosed in a concise and understandable manner?

(8) What services does the provider offer:

Administration

Recordkeeping

Trustee Services

Compliance

Legal

Accounting

Payroll

Investment Management

Custodial

Education

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

(9) What is the total amount of retirement assets the provider services?


(10) What is the provider’s average plan size (assets)?

(11) Has the provider provided their processing, conversion and timing service standards and if so, what are they?

(12) Is the provider bonded and if so, what is their coverage amount?

(13) Is the provider properly licensed for the services provided (at the federal and state levels)?

(14) Does the provider give their plan clientele regular information and updates regarding the services offered?


Selecting and Monitoring Auditors

Use the following questions offered by the DOL to evaluate auditors. Generally, ERISA requires employee benefit plans with 100 or more participants to have an audit as part of their obligation to file an annual return/report (Form 5500). If a qualified retirement plan is required to have an audit, then the plan sponsor (or other named fiduciary so designated) must hire an independent qualified public accountant. The following questions are designed to assist fiduciaries in selecting an auditor and reviewing the audit work and subsequent report.

SELECTING AND MONITORING AUDITORS

Question Response

(1) Is the plan auditor licensed or certified as a public accountant by a state regulatory authority as required under ERISA?

(2) Is the plan auditor independent of any financial interests in the plan or the plan sponsor that would affect his ability to render an objective and unbiased opinion about the plan’s financial condition?

(3) Does the plan auditor have experience auditing ERISA covered plans?

(4) Has the auditor provided references and is his license valid and up-to-date?

(5) Does the auditor take the following into consideration when he audits an ERISA-covered plan:

Whether plan assets covered by the audit have been fairly valued;

Whether plan obligations are properly stated and described;

Whether contributions to the plan were timely received;

Whether benefit payments were made in accordance with plan terms;

If applicable, whether participant accounts are fairly stated;

Whether issues were identified that may impact the plan’s tax status; and

Whether any prohibited transactions were properly identified.

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No


SELECTING AND MONITORING AUDITORS

Question Response

(6) Does the auditor provide a signed copy of the audit in a timely manner (i.e., in advance of the 5500 filing due date)?

(7) Does the auditor have a quality control mechanism in place to ensure that audits are accurate?


Investment Committee Charter

[Name of Plan] [Date]

1. The Fiduciary Investment Committee shall be composed of individuals appointed by the Board of Directors of (Name of Plan Sponsor). The Fiduciary Investment

Committee shall act pursuant to authority delegated by the Board of Directors of the Plan Sponsor (the “Board”), subject at all times to the right of the Board to withdraw such delegation and undertake the responsibilities previously delegated to the Fiduciary Investment Committee directly.

2. The purposes of the Fiduciary Investment Committee are to act pursuant to delegated authority by the Board to satisfy the obl igations of the Board under the

Employee Retirement Security Act of 1974, as amended as follows:

a. Establishing and maintaining the Investment Policy statement; b. Selecting investment options; c. Selecting investment managers; d. Periodically evaluating the Plan’s investment performance and recommending investment option changes; and e. Providing Plan participant investment education and communication.

3. The Fiduciary Investment Committee shall follow all the policies and procedures set forth in the Investment Policy statement (the “Investment Policies”) of the Plan,

as from time to time amended by the Committee subject to approval by the Board. In case of any conflict between the terms of this Charter and the terms of the Investment Policies, the terms of the Investment Policies shall take precedence over the terms of this Charter and shall govern the activities of the Fiduciary Investment Committee.

4. The Fiduciary Investment Committee shall consist of no less than [three] members as the Board may from time to time designate. 5. At any time that the Fiduciary Investment Committee is required to act pursuant to the Investment Policies, the chair or its designee shall convene a meeting of the

Fiduciary Investment Committee. 6. Two members of the Fiduciary Investment Committee shall constitute a quorum for any action to be taken by the Fiduciary Investment Committee at a meeting. A

majority of the members participating in the meeting may take any action or make any determination at a meeting of the Fiduciary Investment Committee; proving, however, that both members participating in the meeting must agree to take any action or make any determination in the case of a meeting consisting of only two members. Members of the Fiduciary Investment Committee may participate in a meeting of such Committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other at the same time and participation by such means shall constitute presence in person at a meeting.

7. The Fiduciary Investment Committee shall provide information to our Service Provider to assist our Service Provider in preparing all necessary documents. 8. The Fiduciary Investment Committee shall have the resources and authority appropriate to discharge its responsibilities, including the authority to consult counsel to

the Plan and other experts or consultants at the expense of the Plan. 9. This Charter may be amended by action of a majority of the members of the Fiduciary Investment Committee at a meeting or by the Board; providing that, if

amended by the Fiduciary Investment Committee, the Fiduciary Investment Committee shall present such Charter, as amended, to the Board at its next regularly scheduled meeting.


Investment Committee Charter (continued)

The following represents a potential listing of suggested additional duties which could be included to convert an Investment Committee into an inclusive 401(k) Steering Committee. Feel free to choose from the following duties or customize to suite the needs of your Plan (change prior verbiage accordingly).

ADMINISTRATIVE DUTIES: - Confirm that all Plan operations, administrative and otherwise, are being carried out as prescribed by the Plan. - Document, and related documents, consistent with current regulations. - Approve or reject and document any appropriate transaction requests (i.e., loans, hardships, withdrawals, distributions). - Confirm and maintain timely remittance of participant contributions pursuant to current DOL regulations. - Maintain reports from each service provider associated with the Plan (Investment Advisor/consultant, recordkeeper, custodian/corporate trustee,

actuary, legal counsel). - Adopt any necessary amendments or restatements to the Plan Document. - Review results of compliance testing annually and document any resulting recommendations and activities. - Review general plan provisions annually and implement appropriate changes (with Board Approval). - Review applicable legislative updates and significant pending legislation. - Confirm that all necessary reporting to participants, vendors and appropriate governmental agencies is accomplished and documented on a timely

basis. - Review and confirm current regulatory compliance status and initiate any appropriate corrections to ensure compliance. - Review and document all ERISA Section 404(a) & (c), compliance related activities as well as general fiduciary guidelines. - Plan and document all participant education/communications activities. - Review, confirm and document competitiveness of plan expenses and services for each plan vendor. - Provide for Committee fiduciary training as necessary. - Report, to the Board of Directors, any potential elective increase in Plan expenditure exceeding $00000. - Review and confirm maintenance of all fiduciary practice standards. - Confirm that the Committee and Board of Directors has adhered to the Exclusive Benefit Rule of ERISA Section 404(a). - Report to the Board of Directors, at least annually, on all significant issues affecting the Plan.

Investment Committee Charter Executed: ___________________________

(Date) Board Members: ___________________________________ _______________________________________ Name and Signature Name and Signature ___________________________________ _______________________________________ Name and Signature Name and Signature ___________________________________ _______________________________________ Name and Signature Name and Signature ___________________________________ _______________________________________ Name and Signature Name and Signature ___________________________________ _______________________________________ Name and Signature Name and Signature


ERISA 404(a) & 404(c) Compliance Checklist

Plan fiduciaries are required to meet specific guidelines as set forth by ERISA. Complete this checklist to indicate compliance with ERISA 404(a) and, if applicable, 404(c) guidelines.

ERISA 404(A) ACTION ITEMS

Action Item Completed Comments

Investment Policy Yes No

Quantitative and Qualitative Analytics Applied

Yes No

Investment Recommendations and Policies Reviewed Periodically

Yes No

Investment Selection/Monitoring Process Documented

Yes No

404(C) ACTION ITEMS

Action Item Completed Comments

Plan Offers a Broad Range of Investment Alternatives

Yes No

Plan Allows Participants to Give Instructions on How to Invest Their Account with Frequency

Yes No

Plan Allows Participant to Obtain Sufficient Information Necessary to Make Informed Investment Decisions

Yes No

Plan Allows Participants to Exercise Independent Control Over Their Investments

Yes No

Other Matters Addressed (Reference §404(c) Checklist; Details provided in User Guide)

Yes No


404(c) Notice and Policy Statement Overview

To comply with some of the important requirements of 404(c), we strongly suggest that you take the following actions:

Review and sign the attached “Notice & Policy Statement” and keep on file.

Distribute the attached “Notice & Policy Statement”, along with the customized Fee Disclosure exhibit, to all eligible employees at your earliest

convenience and include a copy in each enrollment package.

Why are the above action steps so important?

The issue of complete and concise fee disclosure, on both plan and participant levels, is growing more crucial. To help protect you and all of the plan fiduciaries we strongly recommend distribution of the (attached) investment fee description exhibit in addition to the attached basic 404(c) Disclosure Statement (minus the signature page) to all employees. Section 404(c) of ERISA says that, by complying with the 404(c) requirements, plan fiduciaries will not be liable for losses that result from the investment decisions made by participants. Conversely, if plan fiduciaries do not comply with 404(c), they could be liable for losses due to poor investment decisions made by plan participants.

How do the attached materials help protect you?

It establishes your general intention to comply with 404(c)

It discloses to plan participants your intention to comply with 404(c) (Note: If your plan has employer stock, ERISA counsel should be consulted

prior to distributing the attached Notice)

The customized one page fee disclosure complies with the 404(c) requirement of disclosing specific fees that are deducted from participant

investment returns


404(c) Notice and Policy Statement (continued)

[Retirement Plan Name]

Section 404(c) Notice and Policy Statement

The Company offers a defined contribution retirement plan to provide eligible employees with a long-term savings vehicle and potential source of retirement income. The above-named plan (the “Plan”) is intended to be an ERISA Section 404(c) Plan. Under an ERISA Section 404(c) Plan, the Plan fiduciaries may be relieved of liability for any losses that are the direct and necessary result of investment instructions given by a participant or beneficiary. This Section 404(c) Notice and Policy Statement outlines the procedures for implementing and monitoring the requirements set forth in the Section 404(c) regulations. It also establishes the intent of the Plan Sponsor to comply with Section 404(c) and describes certain procedures and guidelines to ensure compliance with Section 404(c).

PLAN FIDUCIARY RESPONSIBLE FOR PROVIDING INFORMATION TO PARTICIPANTS The Plan fiduciary named below is responsible for ensuring that participants receive information about the investment options available under the Plan and for ensuring that the participant’s investment instructions are followed.

401(k) Committee Company Street Address City, State, Zip Phone Number AVAILABLE INFORMATION FOR PARTICIPANTS The Plan fiduciary will provide the following information to all participants [#7-#11 to be provided to participants upon request (based on the latest information available to the Plan)]:

1. A general description of the investment alternatives available under the Plan and, for each investment alternative, a general

description of the investment objectives and risk and return characteristics of the investment alternative. The description must include information on the type and diversification of assets comprising the portfolio of each designated investment alternative.

2. If applicable, the identification of any designated investment managers. 3. An explanation of the procedures for participants to give investment instructions and an explanation of any limitations on such

instructions, including any restrictions on the exercise of voting, tender, and other similar rights.

4. A description of any transaction fees and expenses incurred in connection with the purchase or sale of each investment alternative which may be directly assessed against the participant's account, including commissions, sales loads, deferred sales charges, and redemption or exchange fees.



5. In the case of an investment alternative which is subject to the Securities Act of 1933, and in which the participant currently has no assets invested, immediately prior to or following the participant’s initial investment, a copy of the most recent prospectus provided to the Plan (prospectuses provided to the Plan must be made available upon request regardless of investment type).

6. Subsequent to a participant's investment in an investment alternative, the participant must be furnished with any Plan provisions

or materials provided to the Plan relating to the exercise of voting, tender or similar rights which are incidental to the holding of an ownership interest in such investment, to the extent such rights are passed through to participants.

7. Copies of prospectuses, financial statements and reports, and any other materials relating to investment alternatives available

under the Plan to the extent they are furnished to the Plan. 8. A description of the annual operating expenses of each investment alternative, such as investment management fees,

administrative fees and transaction costs, which reduce the rate of return to the participants or beneficiaries, and the aggregate amount of such expenses expressed as a percentage of average net assets of the designated investment alternative.

9. A list of the assets which comprise the portfolio of each investment alternative, the value of each asset individually (or the

proportion of the investment alternatives which it comprises), and with respect to each individual asset which is a fixed rate investment contract issued by a bank or similar institution, the name of the issuer, the term of the contract and the rate of return on the contract.

10. Information concerning the value of shares or units in designated investment alternatives, as well as past and current investment

performances of the alternatives determined net of expenses on a reasonable and consistent basis. 11. Information concerning the value of shares or units in designated investment alternatives held in the account of the participant.

The Plan fiduciary must comply with a participant’s investment instructions except where (a) implementation of the investment instructions would result in a prohibited transaction under ERISA or the Internal Revenue Code; (b) implementation of the investment instruction would generate taxable income to the Plan, or (c) implementation of the investment instruction is not in accordance with Plan documents (to the extent the documents are consistent with ERISA), would cause a fiduciary to maintain ownership of any assets outside the U.S. and its sovereignties, would jeopardize the Plan's tax qualified status, would result in a sale, exchange or lease of property between a Plan Sponsor and the Plan, would result in a loss in excess of a participant's account balance, or would result in a loan to a Plan sponsor.

INVESTMENT CHOICES

The Plan fiduciaries have provided at least three diversified core investment categories representing a wide range of risk/return characteristics, so as to allow Plan participants to choose from a broad range of investments. The Plan fiduciaries also have established an Investment Policy for the Plan that includes criteria for the initial selection and ongoing monitoring of the investment alternatives under the Plan.



INVESTMENT CHANGES The Plan fiduciaries provide participants with the opportunity to make investment changes on any business day, at no cost, through the investment provider’s toll-free 800 number or Internet site. Restrictions on investment changes may apply that prevent or inhibit late trading practices, excessive trading, or other investment change activities that could possibly have a negative impact on investment performance or expenses. An explanation of how to make investment changes, account balance transfer restrictions or limitations, and transaction confirmations, are included in the enrollment kit and/or provider website. AMENDMENTS TO 404(C) NOTICE AND POLICY STATEMENT The Plan fiduciaries reserve the right to amend this 404(c) Notice and Policy Statement at any time without notice. This 404(c) Notice and Policy is effective .

NOTE: This document provides SAMPLE wording and should be reviewed by legal counsel prior to signing.

Name of Plan Trustee Signature Date




Plan Fee Disclosure Form

Investment Option Management

Fee

Asset

Charge

Total Investment

Expense

All of the above fees were taken directly from information furnished by the investment provider, including, but not limited to: Their website; Investment prospectus information; Investment highlight sheets; Direct emails and correspondence from the investment provider (to Retirement Plan Advisory Group), and other written material. The accuracy of this information is not guaranteed, as it has not been audited by the investment provider. In addition, the investment provider, and/or the underlying fund managers, may make investment and/or pricing changes at any time, subject to the provisions and limitations of their investment contracts (between the plan sponsor and investment provider). The plan provider may also eliminate or replace funds at their discretion.


Retirement Plan Components

The diagram below illustrates the essential components that collectively define plan services that are delivered to you, the plan sponsor, and your participants. Retirement Plan Advisory Group only seriously considers plan providers who deliver product excellence in all areas.

Billed Fees

Investment Management Fees

Asset Based Fees

Revenue Sharing DisclosureWeb-based Tools

Automated Voice Response System

Loan/Withdrawal Processing

Online Enrollment

Enrollment Materials & Meetings

Individual Advice Solutions

Participant Statements

Bi-lingual SupportInvestment Philosophy

Quantitative Analysis

Qualitative Analysis

ScorecardSM Fund Ranking

Plan Document, SPD

Discrimination Testing

5500 Filings

ERISA Resources

Accounting

Employer/Employee Reports

Processing Payroll Deposits

Quality Assurance Standards

RecordkeepingRecordkeeping Technology ServicesTechnology Services

Compliance Compliance

Investment ManagementInvestment Management

CommunicationsCommunications

CostCost

Retirement Plan

ServicesParticipantPlan Sponsor

Billed Fees

Investment Management Fees

Asset Based Fees

Revenue Sharing DisclosureWeb-based Tools

Automated Voice Response System

Loan/Withdrawal Processing

Online Enrollment

Enrollment Materials & Meetings

Individual Advice Solutions

Participant Statements

Bi-lingual SupportInvestment Philosophy

Quantitative Analysis

Qualitative Analysis

ScorecardSM Fund Ranking

Plan Document, SPD

Discrimination Testing

5500 Filings

ERISA Resources

Accounting

Employer/Employee Reports

Processing Payroll Deposits

Quality Assurance Standards

RecordkeepingRecordkeeping Technology ServicesTechnology Services

Compliance Compliance

Investment ManagementInvestment Management

CommunicationsCommunications

CostCost

Retirement Plan

ServicesParticipantPlan Sponsor


Revenue Sharing

By definition, revenue sharing includes payments made by investment managers to service providers or plan consultants for (a portion of) the revenue generated from the management of a particular fund or funds. Historically such allowance may or may not be known to a plan sponsor; nonetheless, it is imperative that plan sponsors with fiduciary oversight of their organization’s retirement plan understand the distribution systems that most investment management organizations use and how they share revenue.

The most common forms of revenue sharing can include 12b-1 fees, shareholder servicing fees, and sub-transfer agent fees. In some instances, a portion of the investment management fee for proprietary funds may include some revenue sharing. The diagram below illustrates potential fund expenses.

Shareholder Servicing: Revenue

shared by the mutual fund company

with the service provider.

Investment

Management Fee

12-b1 Fees

Shareholder

Servicing Fees

Sub-TA

(Agency Transfer

Fees)

Asset / Wrap Fee:

Additional fees layered on top of

total investment fees.

12-b1: Distribution expenses paid by mutual

funds from fund assets. Includes commissions

to brokers, marketing expenses and other

administrative services.

Investment Management: Fees for

managing investment assets. Charged

as a percentage of the assets invested

and deducted from the investment

return.

Sub-TA: Brokerage firms and mutual

funds often contract recordkeeping and

other services related to participant

shares to a third party called a sub-

transfer agent.

Shareholder Servicing: Revenue

shared by the mutual fund company

with the service provider.

Investment

Management Fee

12-b1 Fees

Shareholder

Servicing Fees

Sub-TA

(Agency Transfer

Fees)

Asset / Wrap Fee:

Additional fees layered on top of

total investment fees.

12-b1: Distribution expenses paid by mutual

funds from fund assets. Includes commissions

to brokers, marketing expenses and other

administrative services.

Investment Management: Fees for

managing investment assets. Charged

as a percentage of the assets invested

and deducted from the investment

return.

Sub-TA: Brokerage firms and mutual

funds often contract recordkeeping and

other services related to participant

shares to a third party called a sub-

transfer agent.


Retirement Plan Cost Analysis


Retirement Plan Cost Analysis

RETIREMENT PLAN FEE SUMMARY

Total Cost Investment Cost Administration Cost

ABC Company $ $ $

% % %

Benchmark* % % %

Plan Assumptions Number of Participants Plan Assets as of

*Source: 401(k) Averages Book, HR Investment Consultants (9th Edition) **Average account balance for benchmark is $50,000


Compensation Disclosure STATEMENT OF PURPOSE This document is provided voluntarily to customers of Retirement Plan Advisory Group. Its purpose is to provide complete disclosure of all compensation paid to our firm for services delivered by Retirement Plan Advisory Group to your plan. This document does not replace any legal or required disclosures mandated by the Department of Insurance, Department of Labor, IRS, FINRA, the SEC, Financial Telesis, Inc. (our Broker Dealer), or any laws, regulations or legal directives impacting the subjects covered in this document. This document may review compensation that is also disclosed in other documents and forms provided to you through your plan provider, filings of government forms and documents, and other sources.

METHOD AND AMOUNT OF COMPENSATION Retirement Plan Advisory Group receives one or more of the following types of compensation, as detailed below:

1. Commissions (Mutual Fund, FINRA Registered Contracts, or Group Annuity Contracts) – These are payments made by the plan provider to Retirement Plan Advisory Group. These commissions are included in the existing pricing that applies to the plan (that includes this type of arrangement), and are addressed in the contractual documents between the plan provider and plan sponsor detailing total plan costs.

0.XX% of plan assets

2. General Consulting Fees – The scope of services and plan sponsor fee payments are outlined in the Retainer Agreement approved and signed

by the plan sponsor.

$________ annually 3. Additional Compensation not charged directly to your plan – Some plan providers may, at their sole discretion, pay Retirement Plan Advisory

Group annual additional compensation not charged directly to your plan up to .05% of plan assets. The additional compensation made by the plan provider to Retirement Plan Advisory Group does not increase the specific pricing that applies to the plan. Generally, Retirement Plan Advisory Group receives these payments for delivering employee communications, investment due diligence and other services to plan sponsors.

Estimated at 0.XX% of plan assets


Compensation Disclosure (continued) POTENTIAL OR ACTUAL CONFLICTS OF INTEREST We highly recommend that you read the report issued by the Securities and Exchange Commission (SEC) titled, “The Examination of Select Pension Consultants” (http://www.sec.gov/news/studies/pensionexamstudy.pdf). This report describes several potential conflict of interest scenarios of pension consultants who serve qualified retirement plan sponsors. We believe that this SEC report, along with increased scrutiny by the DOL and other government agencies, will benefit plan sponsors and plan participants. Retirement Plan Advisory Group is dedicated to avoiding conflicts of interest through full disclosure, level compensation, and other industry-leading business practices. The primary components of our conflict of interest policy are:

Disclosure of all forms of compensation

Flat dollar arrangements with no incentive to recommend one provider or fund over another

Clarification of service delivery and timing

Providing disinterested advice when operating as a registered investment advisor

Disclosing the type and amount of compensation to our customers

Disclosing whether we are getting paid as a “broker” (non-advisory capacity) or an “advisor”

CONCLUSION Our mission is to provide services that help plan sponsors operate their qualified retirement plan within the law, while providing investment, RFP and other analysis that enhance efficiency and help plan participants build a meaningful retirement benefit. Any questions regarding commissions, fees, and other forms of compensation, conflicts of interest or the scope and frequency of services should be directed to Retirement Plan Advisory Group and will be fully addressed. Retirement Plan Advisory Group www.401kadvisors.com [email protected] 949-460-9898 x227


Basic Administrative Compliance

Operate your plan according to the plan provisions. Do not

make exceptions or deviate from the plan document.

Follow the definition of pay for deferral, matching, and discretionary contribution purposes. Be sure to report pay that is consistent with the definition in your document.

If you have a Custom document, have you filed for a favorable determination letter?

Submit plan contributions within 2-3 days after payroll deductions, or the soonest possible date.

Report any purchase or sale of any part of your company to your plan provider and Retirement Plan Advisory Group.

Report any layoff of 15 percent or more of your employees to your plan provider and Retirement Plan Advisory Group.

If you have more than 100-120 employees your plan may require an outside ERISA plan audit.

If you have not updated your Summary Plan Description (SPD) in the last five years, or since the last time you made changes to the plan design, contact your plan provider and Retirement Plan Advisory Group.

Document and retain minutes for this plan review and all 401(k) related meetings.

If you have not already completed and executed your investment and 404(c) policy statements, do so immediately.

Follow the guidelines of your investment due diligence reviews. If you need to add, delete or freeze funds based on the research and analysis presented in such reviews, do so! Remember that “no action” by a plan fiduciary is indeed “action” as viewed by the DOL.

Forced IRA Rollovers for account balances $1,000 - $5,000.

Work with the plan provider to take “reasonable steps” to locate plan participants who have terminated employment.

Make sure that Summary Annual Reports are distributed within nine months after the end of the plan year.

If applicable, make sure that the Summary of Material Modifications are distributed within 210 days after the end of the plan year.

Remember that you are not allowed to exclude your part time employees from participating in the plan.

Consider having plan forfeitures to be used first to pay plan expenses and then to offset the cost of employer matching or discretionary contributions.


Compliance Checklist

RETIREMENT PLAN COMPLIANCE CHECKLIST Documented

by RPAG

Documented

by Plan

Provider

Documented

by Plan

Sponsor

Not

Applicable

404(A) INVESTMENT DUE DILIGENCE

1. Investment policy statement draft

2. Investment policy statement provides direction on how to evaluate, monitor, and replace funds

3. Investment policy statement executed

4. 404(c) disclosure draft

5. 404(c) disclosure given to employees

6. Comprehensive quantitative and qualitative investment due diligence process

7. Investment due diligence analysis that follows directives of investment policy statement

8. Investment offerings compared to their peer group over varying periods of time

9. Investments diversified so as to minimize the risk of large losses

10. Investment fees for every investment reviewed and are within acceptable limits

11. Investments that do not meet the minimum acceptable criteria are placed on a “watch list”

12. Recommended alternatives are suggested, based on all applicable criteria (risk, return, etc.), for “watch list” or unacceptable investments

13. Style appropriateness reviewed for every investments

14. Investments are prudent and solely in the interest of the plan’s participants and beneficiaries

15. Risk of each investment has been evaluated

16. Investments offered in the plan represent asset classes across the risk/return spectrum

17. Communications materials are available to allow participants to make informed decisions

18. Communications materials have been disseminated to employees on a regular and periodic basis

19. Fund prospectuses (for mutual funds) or fact sheets (for separate accounts) available

20. Fund prospectuses and/or fact sheets disseminated to employees

21. Group employee enrollment and investment education meetings available to plan sponsor

22. Group employee enrollment and investment education meetings offered to employees

23. Individual investment advice available to plan participants

24. Individual investment advice offered to plan participants

25. Plan trustees and (if applicable), committee meet to discuss results of investment policy statement directives and investment due diligence analysis

26. Plan trustees execute changes (if applicable), as a result of plan trustee meeting


Compliance Checklist (continued)


by RPAG

Documented

by Plan

Provider

Documented

by Plan

Sponsor

Not

Applicable

27. Minutes of plan trustee meeting documented and held on file by plan sponsor (see sample meeting minutes agenda)

28. ADV form provided to plan sponsor and interested plan participants [RPAG documents only if registered investment advisory services are being provided]

PLAN-RELATED DOCUMENTS

29. If there have been any plan design changes since the most recent version of the SPD and plan document and amendments were completed, a new SPD/SMM and/or plan document has been completed

30. Summary plan description and summaries of any material modifications to the plan prepared

31. Summary plan description and summaries of any material modifications to the plan delivered (hard copy or electronically) to all employees

32. Copy of plan document and plan amendments on file by plan sponsor

33. Plan is being operated in accordance with the plan document

34. Do you respond within 30 days to all written participant inquiries for copies of plan documentation and information

MISCELLANEOUS FIDUCIARY ISSUES

35. Update payroll system to reflect Internal Revenue Code deferral and catch up limits

36. The employer sponsors another qualified plan for themselves and/or any member of their controlled group

37. Plan covered by an ERISA fidelity bond that meets the minimum requirements prescribed by ERISA

38. You are made aware of the general requirements for an outside ERISA plan audit, and referred to an ERISA audit specialist for determination if your plan meets the general requirements

39. You are required to have an ERISA audit, and one has been conducted by an ERISA audit specialist, including completion of the appropriate section of the 5500

40. Verify that the plan has not engaged in any financial transactions with persons related to the plan or any official

41. Verify that the plan assets have not been used to pay expenses that were not authorized in the plan document

42. Verify that plan fiduciaries and parties in interest are not involved in self-dealing

43. You have been made aware of the DOL guidelines for plan deposits

44. You have made plan deposits of participants contributions within the guidelines prescribed by the DOL

45. If the plan sponsor (company) has acquired another organization that is now part of the plan sponsor’s controlled group, this entity has been added to the plan, or excluded from the plan by (document) design and passes coverage testing


Compliance Checklist (continued)


by RPAG

Documented

by Plan

Provider

Documented

by Plan

Sponsor

Not

Applicable

46. The annual 5500 has been prepared, signed by a plan trustee, and filed with the IRS

47. 5558 filed (only necessary for late filing of the 5500)

48. Summary Annual Report completed and distributed to employees

49. The annual ADP and ACP (401(k) and 401(m)) tests have been completed, and if failed, excess contributions and interest have been returned to plan participants

50. The annual top heavy (416) test has been completed

51. Total cost policy draft

52. Your total plan costs are reasonable and competitive for plans with your demographics, plan assets, and services

FEES, COSTS AND PROVIDER SERVICES

53. Your plan administrative, recordkeeping, and compliance services are reasonable and competitive versus other providers who offer products and services to plan sponsors with your demographics and plan assets

54. You have the ability to benchmark all fees and services versus with industry norms, and comparing products and costs of other plan providers delivering services to plan sponsors with your demographics and plan assets

55. You have conducted a benchmarking/RFP in the past three years

56. Plan provider has delivered timely, accurate recordkeeping, including processing of benefits, posting of deposits, and production of employee and employer reports

57. Pertinent new plan provider services introduced to plan sponsor

CORRECTIVE ACTIONS (FOR ITEMS THAT DO NOT HAVE A CHECK MARK IN ONE OF THE COLUMNS)

1.

2.

3.

4.

5.

6.

7.

8.

This list represents some of the common and important plan compliance issues; however, it does not represent the entire list of plan compliance-related responsibilities.


Organizing Your Fiduciary File As a plan sponsor and fiduciary of your company’s retirement plan, keeping an up-to-date fiduciary file is critical. To begin, Retirement Plan Advisory Group recommends preparing your file in four key sections: Documents, Administrative, Participant Communication, and Investments. Contents of each section could include the items listed in the table below.

I. Documents Section

Plan Document and Amendments

IRS Determination Letter (Opinion Letter if prototype)

Summary Plan Description

Investment Policy Statement

404(c) Policy Statement and Notice

Form 5500 (5 years)

Service Provider Contracts

Salary Deferral Agreement

Material Modification

Plan Loan Documents

Form 5330 (if necessary)

Nondiscrimination Test Results

Corporate Tax Return copies

Corporate Board Resolutions

Summary Annual Reports (5 years)

RFP Results

Committee Charter

ERISA Fidelity Bond

ADV II and Schedule F (if required)

Other

II. Administrative Section

Evidence of Employer Contributions (5 years)

Distribution Documents

Default Safe Harbor, Automatic Enrollment Notices

Audit Results (IRS, DOL)

Annual Plan Review Executive Summary

Participant Complaints

Significant Business Events (Sale, Purchase, etc.)

Fiduciary Liability Insurance Contract

Correspondence (DOL, IRS, etc.)

III. Participant Communication Section

Enrollment Material

Documentation of all Communication Events (meetings, emails, posting, etc.)

Material to be provided automatically

Material to be provided upon request

IV. Investment Section

Documentation of Investment Activity

Executive Summaries from Committee Meetings

Current Fund Menu and Expenses


Conclusion

Participate in year-long fiduciary and administrative educational webinars

Review monthly newsletters

Plan and monitor annual participant communication/education campaign - including regularly reviewing and utilizing, as appropriate, monthly participant communication memoranda


Table of Limits and Thresholds

2007 2008 2009

COMPENSATION LIMIT (Plan year BEGIN) $225,000 $230,000 $245,000

DEFINED BENEFIT LIMIT AT AGE 62-65 (limitation year END):

Annual Limit $180,000 $185,000 $195,000

DEFINED CONTRIBUTION ANNUAL ADDITION LIMIT (limitation year END): $45,000 $46,000 $49,000

401(k) & 457 GOV’T PLAN DEFERRAL LIMIT (calendar year): $15,500 $15,500 $16,500

401(k) & 457 “CATCH UP” DEFERRAL LIMIT (calendar, plan or limitation year) $5,000 $5,000 $5,500

H.C.E. COMPENSATION THRESHOLD (plan year BEGIN):

For determining HCEs in 2007, EEs who earn

more than $100,000 in 2006

For determining HCEs in 2008, EEs who earn

more than $100,000 in 2007

For determining

HCEs in 2009,

EEs who earn

more than

$105,000 in 2008

KEY EE COMPENSATION THRESHOLD (plan year END):

5% Owner All All All

Officer $145,000 $150,000 $160,000

SOCIAL SECURITY WAGE BASE: $97,500 $102,000 $106,800


Disclosures 1. The materials and information in this document are not tax or legal advice. Please consult with your CPA or ERISA attorney for specific guidance

or advice with any tax or ERISA legal issues.

2. Some of the materials in this document are intended to assist plan sponsors in complying with certain standards under ERISA, however, Retirement Plan Advisory Group does not imply any warranty or guarantee plan compliance for sponsors who utilize the enclosed materials and processes.

3. There are pertinent areas of ERISA that are not covered in this Plan Review. Time does not permit the review of all applicable laws, regulations,

and areas under ERISA impacting this plan.

4. Specific design features described in this Plan Review have been taken from information provided to Retirement Plan Advisory Group by the plan provider and other third parties. These design provisions may be subject to change at any time by plan trustees, regulations, or future legislation. Please refer to the most recent plan document and amendments for complete and accurate design information for this plan.

5. The information herein describing limits, thresholds, 401(c) compliance, description of fiduciary responsibilities and other areas are all intended to

be current based on the date printed on the front cover of this report. Much of this information may become obsolete or outdated over time. This document should not be relied upon as a permanent reference manual.

6. Please contact your Retirement Plan Advisory Group representative if you are unclear about any of this Plan Review, or if we may be of

assistance with the explanation of the materials.

7. This document is confidential and for the exclusive use of the plan fiduciaries. Dissemination of this information by Retirement Plan Advisory Group and/or the plan sponsor, to outside parties may be a violation of privacy laws and non-disclosure agreements (between Retirement Plan Advisory Group and the plan sponsor).