Castle Rock Investing

Independent Guide, Trusted Partner.

Blog

How to Hire Your Plan’s Auditor

by

Generally, Federal law requires employee benefit plans with 100 or more participants to have an audit as part of Form 5500.  Selection of your plan’s auditor is one of the most important duties of the plan administrator so the Department of Labor provides guidance to selecting an auditor at httpss://www.dol.gov/ebsa/publications/selectinganauditor.html.

In addition, the American Institute of Certified Public Accountants (AICPA) provides a sample RFP and Auditor Evaluation Process Checklist on their website at  httpss://ebpaqc.aicpa.org/ in the Employee Benefit Plan Audit Quality Center.  They recommend plan sponsors verify three items:
  1. The auditor is licensed or certified as a public accountant by a State regulatory authority.
  2. The auditor does not have any financial interests in the plan or the plan sponsor that would affect their ability to render and objective, unbiased option about the financial condition of the plan (having a Madoff flashback?).
  3. The auditor has the depth of experience needed to perform this service by checking their references.  The DOL and AICPA state that the most common reason for deficient accountants’ reports is the failure of the auditor to perform tests in areas unique to employee benefit plan audits.
You may want to start a search on AICPA’s website if you don’t have an auditor in mind.  Center members are required to adhere to strict management practices including the selection of its ERISA employee benefit plan audits as part of the firms peer review reviewed by individuals employed by another Center member firm.
Remember that this year the auditor’s report will attached to the Form 5500 as a PDF file and transmitted electronically using the EFAST2 system.  You can also find more information on EFAST2 on the DOL’s website at httpss://www.dol.gov/ebsa/faqs/faq-efast2.html.

FBi Knocking on Your Door

by

Fiduciary Benchmarks, Inc. (FBi) has developed the industry’s most advanced benchmarking tool that satisfies the fiduciary obligations under ERISA and proposed regulation 408(b)(2).  In addition to the benchmarking of fees, services and success measures, FBi will offer industry research based on the aggregate data gathered as part of their benchmarking business.
The biographies and depth of experience of the FBi staff is impressive and CRIC can testify to their depth of knowledge.
Tom Kmak, CEO and Co-Founder, Tom Kmak, former CEO of JPMorgan Retirement Plan Services (1990-2007).
Olena Berg Lacy, Sr. Vice President,  Director and Senior Advisor for Financial Engines (1998 – present)
Craig Rosenthal, 23 years in the industry including President for PLANSPONSOR Pathfinder (2006-08)
Randy Namin, also 23 years in the financial services industry
Matt Golda, CFA, has been analyzing investments for 15 years.
After researching the available benchmarking services in the marketplace CRIC signed an agreement with FBi in May 2009.  The FBi Proponents Code of Ethics requires a commitment to full disclosure of all fees for all clients which has been a guiding principle for CRIC since inception.
CRIC is pleased to announce that FBi began publishing final reports in November 2009 and, with a couple of changes to the order of quarterly information, expects to include your first FBi report in your next quarterly review.

CRIC Announces Formal Agreement with Income Solutions®

by

CRIC is pleased to announce a formal agreement with Income Solutions® to offer institutionally priced immediate annuities to your retiring participants. CRIC will not receive any compensation for annuities sold through the platform and the service is being provided to you at no additional cost.
In the meantime I hope your census file submission was complete and your third party administrator is nearly finished with the discrimination testing and your audit package.  See “Administrative Actions” below if you do not have a safe harbor plan design.
Sincerely,
Michele L. Suriano
President

What is a BrightScope Rating?

by

They began by developing an algorithm, the BrightScope Ratings™, to assess the quality of a retirement plan on the company level.  It takes into account 200+ unique data inputs per plan to calculate a single numerical score to define 401k plan quality.    The algorithm runs simulations for each plan in order to determine how quickly each 401k plan will get the average 401k participant to retirement.  Factors include company contributions, fees, investment menu quality, vesting schedules, and eligibility periods.
As a plan sponsor you can subscribe to their Plan Management Dashboard which was launched in July 2009 in order to view the underlying BrightScope data and calculations and do a thorough fee analysis that benchmarks each fee you are paying.  In September 2009 BrightScope also launched Advisor Central as a prospecting tool for brokers and advisers to purchase data on a subscription basis to target retirement plans with low rankings.