January 2016 - the Orange County Chapter of the Western Pension

President’s Message
Dylan Porter, Chapter President
WP&BC Orange County Chapter
Season’s Greetings to all our WP&BC Orange County Members, Sponsors and
Guests. Although these words will reach you in early 2016, they are being
written two days before Christmas!
January 2016
Western Pension &
Benefits Council
Orange County Chapter
Join us :
THURSDAY, Jan. 14, 2016
for our Breakfast Forum program featuring Anita Baker
addressing “Plan Audit Quality
— A Top DOL Initiative!!”
 Learn what the impact of
the new DOL Audit Quality
Study on plan audits
 Most common EBP audit
deficiencies
Click here to visit our
website for more details.
Table of Contents:
President’s Message
1
Committee Member Profile
2
Ask the Expert— DOL Study of Plan
Audits Suggests Size of EBP Audit
Practice Impacts Quality
3
Member Profile
5
Operational Policies and Procedures to Manage Plan Sponsor Responsibilities and Fiduciary Liability
Exposure
6
Program Calendar
7
Sponsors
9
Reflecting on the past few weeks, one news story keeps returning to my yearend ruminations. On November 2, the New York Times reported that death
rates are rising for middle-aged Americans, particularly for those with a high
school education or less. Proximate causes include spikes in suicides and also
deaths related to substance abuse. A number of root causes are traced in the
study – rise in joblessness and disability – but also the fact that real income
declined by 19% in 15 years for Americans without a college education. The
disturbing trends can be seen as a consequence of a decline of living standards
during an extended period of societal stress.
As pension and benefit practitioners, we help employers establish and maintain
programs that help provide financial security and health care. I see an
important connection between the work we do and the health of the society
we live in. There are many important pillars in a vital society – education,
business activity, family, community – but members who do not have access to
health care or old-age security programs are undeniably under additional
stress. As we assist our clients in running these complex programs, let’s keep in
focus the positive effect they have on the end users and on society at large. We
may never meet the people helped most by these programs, but our
unglamorous work maintains important lifelines for all kinds of American
workers.
Planning for the 2016 Western Benefits Conference is well under way. Mark
your calendars for July 19-22 in Seattle as our annual program promises to be
another winner! I plan to attend, and perhaps combine the trip with a visit to
family, friends and favorite fly-fishing spots in the beautiful Pacific Northwest.
We have had several breakfast meetings now at Andrei’s Restaurant on Main
Street in Irvine. If you haven’t yet come out for a meeting there, wait no longer
– their breakfast and hospitality has been super.
We continue our 2016 roster of excellent speakers and informative
presentations. The breakfast forums, ABCs of Pension Plans, technical lunch
and specialty meetings are listed in our Calendar on page 7. I look forward to
seeing you at these events.
We invite our members to become involved with the Chapter’s future success.
There are a number of ways to participate, just ask one of the Board members
over breakfast. If you are not yet a member of our Chapter, we welcome you to
join today! For other volunteer and membership information contact our
Administrator, Marti Hack at 949-859-6277 or [email protected].
Program Committee Member Profile
Name:
Company:
Tina Schackman, CFA
Prudential Retirement
Job Title:
VP, National Intermediary Relations (Western Region)
Years in the Industry:
20+
First “real” job:
Executive Assistant at Worldwide Investment Network
Education:
B.A., Finance—CSU Fullerton
Master’s degree in Accounting and Financial Management—Keller Graduate School of Management
Business Background
Nature of your work: Strategically partner with major intermediary channels in the retirement plan industry
to help build their business.
How you got into the field: Took my Series 7 and 24 while in college and was fortunate to land a job after
I graduated.
What you like about the field: Participating in an industry that is striving to help people get to a secure
retirement.
Personal
Ways you spend free time: Walking my dog, paddle boarding, cycling and skiing
Guiding philosophy: Be present!
Favorite charity: I.C.A.R.E. Dog Rescue
Last book read: Thinking in New Boxes by Luc De Brabandere and Alan Iny
Restaurant recommendation: Solita in Huntington Beach
What will you do when you retire: Volunteer work.
Renew your 2015-2016 membership!
The benefits of membership in our Chapter include:
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Members are listed in our online membership roster
Members have access to the rosters of all chapters of the WP&BC as well as
access to the Members-only areas of the website
Members receive discounted registration fees to Chapter events, webinars and the
Western Benefits Conference
Members may use the Free Guest program to bring clients and colleagues to Chapter events
Our Chapter is growing! Our events provide high-quality education, continuing education credit
for a number of certifications, and great networking opportunities. CLICK HERE to visit the membership page of our website to review the membership opportunities for
2015-2016.
Ready to support our Chapter at a higher level? Become a Sponsor!
Sponsors receive recognition throughout the year in our announcements and newsletters, on our website
and at our Breakfast Forums. Visit the Sponsor page of our website. Questions?
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Contact Marti at [email protected] or (949) 859-6277 for more information.
Ask The Experts
Anita Baker, Managing Principal Employee Benefit Plans at
CliftonLarsonAllen
DOL Study of Plan Audits Suggests Size of EBP Audit Practice
Impacts Quality
In May of 2015 the Department of Labor Employee Benefit Security Administration (DOL EBSA)
revealed the results of the DOL Audit Quality Study conducted in 2014. The EBSA is charged by
law with protecting the retirement, health, and other related workplace benefits of private
sector workers and retirees nationwide. The DOL’s study sample included 400 2011 Form 5500
filings and EBP audits by 232 public accounting firms.
Quality of audit related to size of practice
The overall findings in the study indicate there is a 39 percent deficiency rate in plan audits.
However, the DOL noted that the size of a firm’s employee benefit plan audit practice has a
significant impact on the quality of the practice.
Number of EBP Audits
1-2
3-5
6-24
25-99
100+
Percentage of Deficient Audits
75
68
67
42
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Firms that audit less than 100 plans had higher deficiency rates. Firms that audit 100 or more
plans had a 12 percent deficiency rate, suggesting the importance of using EBP auditors with
dedicated personnel with adequate training and experience in the EBP industry.
Results and recommendations
The DOL’s study offers several recommendations and related action items. Recently, they
emailed correspondence to plan administrators who hire independent auditors to communicate
the results of the Audit Quality Study and the importance of hiring a plan auditor that has the
appropriate EBP experience.
In addition, the DOL may recommend legislative changes regarding EBP auditor qualifications
and enhanced enforcement powers over service providers (CPA, actuary, third party
administrator, etc.), including the ability to assess monetary penalties.
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(Continued from page 3)
The DOL also has made over 140 referrals to the American Institute of Certified Public
Accountants (AICPA) Professional Ethics Division and State Boards of Accountancy. The AICPA
conducts an independent investigation of the AICPA member and recommends required
corrective action which can include admonishment, suspension or expulsion from the AICPA.
How does this affect plan sponsors?
Plan sponsors who hired deficient auditors were notified by the DOL and could be subject to
penalties if the audit deficiencies are not corrected. The DOL has the right to reject plan filings
and assess penalties of up to $1,100 per day, without limit, on the Plan Administrator for
deficient filings. Because an incomplete, inadequate, or untimely audit report may result in a
rejection of the filing and penalties being assessed against the Plan Administrator, it is
important to select an experienced and reliable auditor. Plan administrators should make the
careful selection of the plan auditor a high priority.
AICPA EBP Audit Quality Center
In 2004, the AICPA established the EBP Audit Quality Center (Center). The center helps
employee benefit plan sponsors find auditors that are committed to quality. In addition, it
provides best practices, tools and resources for audit firms to help them perform quality audits
and raise the awareness about the importance of quality audits. Today, the center has over
2,400 member firms dedicated to providing quality employee benefit plan audits.
The Center has created a community of firms that demonstrate a commitment to employee
benefit audit quality, and supports those firms by:
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Providing members with timely communication of regulatory developments, best practices
guidance, and technical updates.
Providing members with an online member-to-member discussion forum for sharing best
practices as well as discussions on audit, accounting, and regulatory issues.
Maintaining relationships with, and acting as a liaison to, the DOL on behalf of member
firms.
To be eligible to be a member of the Employee Benefit Plan Audit Quality Center, a firm must
meet certain membership requirements including designating an audit partner to have firmwide responsibility for the quality of the firm's ERISA employee benefit plan audit practice and
establishing a program to ensure that all employee benefit plan audit engagement personnel
possess current knowledge, appropriate to their level of involvement in the engagement, of
applicable professional standards, rules and regulations for ERISA employee benefit plan
audits. This includes a CPE requirement for EBP specific training of 8 hours every 3 years.
The DOL Audit Quality Study demonstrated that Center members, no matter how many audits
they performed, had a lower deficiency rate than their peers. This is partially due to the
requirement that members demonstrate their commitment to audit quality and require EBP
specific training for auditors. Plan sponsors can find member firms, resources, and articles
such as “The Importance of Hiring a Quality Auditor to Perform Your Employee Benefit Plan
Audit” on the AICPA website.
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Member Profile
Name:
Company:
Title:
Years in the Industry:
Jeff Abelli
Pioneer Investments
RVP, West Region DCIO
12
First “real” job:
Education:
Year you joined WP&BC:
Finance for Pioneer Investments
Merrimack College -- Accounting
2014
Business Background
Nature of your work: Partnering with retirement consultants
How you got into the field: When I was in finance the then head of sales at Pioneer said I should join sales
team. Took a risk but glad that I did.
What you like about the field: Getting to know people.
Personal
Ways you spend free time: girlfriend, dog, hockey, golf and bar-b-que
Guiding philosophy: It is better to have high goals and come up shorty trying than to have low goals and
achieve them.
Favorite charity: Homes for Our Troops - www.hfotusa.org
Last book read: Orr – My Story
Restaurant recommendation: Thai Mint Leaf – not the best service but food is great and it is BYOB
What will you do when you retire: I don’t think I will ever fully retire. I cannot sit still.
Watch Us Grow!
We are pleased to welcome the following new members:

Tina Schackman
Prudential Retirement

McKenna James

Link-Murrel & Company, LLP

Ed Benoe
HBLA, CPAs

Charisse Redd
HBLA, CPAs

Kris Krikorian
Pentegra Retirement Services

Christine Turnball
Mutual of Omaha
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Craig Dart
C Dart CPA

Randall Trost
Morgan Stanley

Martin Deaver
Empower Retirement
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Lynn Janzen
George W. Teats, CPA

George Teats
George W. Teats, CPA
Jason Colin Patrick
Fiduciary Advisors, LLC
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Stuart Hack, JD, CLU
Sunlin Consulting
Operational Policies and Procedures
To Manage Plan Sponsor Responsibilities and Fiduciary Liability
Exposure
Getting their arms around all of the management responsibilities and fiduciary exposure relating to their retirement plans is a challenging task for plan sponsors; both large and small.
Best practices suggest identifying all of the responsibilities and exposures and creating policies and procedures
to assure fulfillment.
Over time, a standard set of policies, procedures and documents has evolved, that include:
1. Allocation of Plan Responsibilities -identification and allocation of plan responsibilities among Board
of Directors, Plan Administrator and Plan Committee
2. Detail of Plan Responsibilities Allocated to Board of Directors, Plan Administrator and Plan
Committee
3. Annual Plan Operational Reports to The Board from Plan Committee and Plan Administrator
4. Plan Committee Guidelines
a. Committee charter
b. Policy for appointment, resignation and removal of Committee members
5. Investment Policy Statement
6. Periodic Fund Performance Monitoring Report
7. Plan Expenses Allocation Policy
8. Market Timing, Short-Term, and Excessive Trading Policy
9. Annual Plan Disclosures Compliance Report – includes:
a. Documented 404a-5 disclosure compliance review, including:
i. Content
ii. Timely distribution to plan participants
b. Documented 408b-2 disclosure compliance review and actions taken
c. Documented QDIA compliance review, including:
i. Review of QDIA selection compliance with regulations
ii. Review of disclosure content for compliance with regulations
iii. Timely distribution of initial and annual disclosures
d. Documented 404(c) compliance
10. Plan Fraud Policy Statement
11. Minutes of Committee Meetings
6
(Continued from page 6)
12. Documentation of all Plan Sponsor Decisions
13. Documented Committee Fiduciary Training and Ongoing Education
Using the above set of policies and procedures provides a clear path to manage plan sponsor and fiduciary responsibilities regarding the sponsor’s employee retirement plan(s).
Our 2016 Calendar of Programs
All Breakfast Forum Meetings will be held in our NEW LOCATION:
Andrei’s Restaurant
2607 Main Street
Irvine, CA 92614
1/14/2016
Breakfast Forum: Plan Audit Quality—Top
DOL Initiative!
Anita Baker, CPA, Managing Principal
CliftonLarsonAllen (CLA)
1/21/2016
Capital Group
6455 Irvine Center Dr
Irvine, CA
2/18/2016
Seminar: The 8th Annual ABC’s of Pension
Plans
Hitz Burton, JD, Aon Hewitt
Doug Van Galder, ERPA,QPA , QBI,LLC
Stuart Hack, JD, CLU, Sunlin Consulting
Marilyn Thompson, CPA, Windes
Waldan Lloyd, JD, Shareholder, Employee Benefits & ERISA Section Chair
Callister, Nebeker, & McCullough
3/17/2016
Breakfast Forum: ERISA Litigation
4/21/2016
Breakfast Forum: Proposed: DOL Guidance
on State Savings Programs: What’s the
Impact on Financial Advisors and TPAs?
Breakfast Forum: Washington Update:
(Including Updates regarding Fiduciary
Definition)
5/19/2016
Breakfast Forum: DOL’s Retirement Income
Initiative—DC Plan Lifetime Income Products
Timothy Verrall, JD, Shareholder
Ogletree, Deakins
TBD
Bruce Ashton, JD, Partner
Drinker Biddle
Our slate of speakers and topics is subject to change throughout the year. To find the most current information about upcoming meetings, visit www.WPBCOrangeCounty.org, then select “Events.”
Meeting Details:
Breakfast Forums are held at Andrei’s Restaurant, address above. Registration is $75 per person, with discounts for members and early registration. Your registration fee includes a full breakfast buffet and hosted
valet parking. Check-ins begin at 7:30 am, breakfast and networking until 8 am. Presentations typically end at
9:30 am. Members may bring one guest for free.
Seminars are held at the Capital Group Campus in Irvine. Registration is $175 per person, with discounts
for members and early registration. Your registration fee includes a continental breakfast , full lunch and hosted parking. Check-ins begin at 7:30 am, breakfast and networking until 8 am. Presentations typically end at
4:30 pm.
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Looking for an employee? Let us advertise your pension and benefits
related job opening on our website. Our Chapter’s job opportunities page
is open to all website visitors, and there is no fee for posting a job. Call
(949) 859-6277 for more information, or send an email to
[email protected] with a brief job description along with instructions for applying.
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We acknowledge and thank our valued Sponsors for their support.
Western Pension & Benefits Council
Orange County Chapter
www.wpbcorangecounty.org
[email protected]
24001 Calle de la Magdalena,2715
Laguna Hills, CA 92653-2715
(949) 859-6277
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