October Webinar

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October 8, 2010

Presentation by:

Steve ScottManaging PartnerRetirement Solution Group, LLC

Q3 State of the Retirement Plan Industry,401(k)/Retirement Plan Update for

Business Owner & Advisors

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Agenda

Who Is RSG?

Case Studies

Benchmarking

Next Steps

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Who Is RSG?

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Retirement Solution Group, LLC

This is our CORE business.

Retirement Plan consulting firm Administers over 300 plans Co-Fiduciary on more than $150,000,000 Participant Services for more than 8000 participants 2 federally enrolled actuaries on staff 2 on-staff enrollment & education support available (Spanish speaking available) We are fully independent Regional offices in Chicago, New England and Florida (business in 22 states) Members of NIPA, ASPA and CFDD 99% (+) of firm revenue comes from qualified retirement plan related business

Retirement Solution Group

All decisions are made in the best interest of participants per ERISA. We adhere to the DOL guidelines on participant reporting and ensure that full disclosure be present throughout.

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Definition of a “Fiduciary”

You are a fiduciary of an employee benefit plan if you meet any one of the following tests:

You exercise discretionary authority or control over plan assets or plan management - “Functional Fiduciary”

You are specifically identified in the written documents of a plan as a “Named Fiduciary”

You have discretionary responsibility in the administration of the plan.

You manage the plan or its assets or render investment advice for a fee.

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Roles & Responsibilities of Plan Fiduciary

Client

Independent Pension Consulting Services

Investment Co-Fiduciary Benchmarking Conflicts of Interest Investment Policy Statement (IPS) Adherence to IPS Education

Cost Breakdown Prudent Man Standard Investment Related Expenses Support Related Expense PERA Opportunities

Investments, Recordkeeping, and Participant Services

Technical Proper valuation work Tax and relevant government

filings Plan Document and SPD

compliance Methodologies Best Practices


Through an efficient delivery model, we offer a variety of solutions to your retirement plan. The roles and responsibilities must be clear and explicit. Accountability is key.

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Case Studies

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Case Study: Single Employer DB Plans

Situation: Local doctor works for hospital but is “self-employed” and has a SEP and wants to know if she can defer more.

Complication: While the DC limits of $49,000 are attractive to most, there was insufficient upside with higher costs.

Result: RSG designed a single member DB Plan. It offers a Maximum 2010 Funding Benefit of $280,440 and a Minimum Required Funding of $50,236.


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Case Study: “Safe Harbor” Switch

Situation: Company enacted a “Safe Harbor Match” design in 2008 to avoid refunds to owners and key employees caused by ADP testing.

Complication: The firm, unlike most company’s in this economy, is doing well and has a significant tax burden and wants to do profit sharing. But SH Match does not count towards gateway so it is costing almost 9% of payroll.

Result: RSG is recommending a switch to SH non-elective employer (3%) funding. This will count towards gateway and as a result cost only an additional 2% of payroll to hit gateway of 5% “gateway. Five Partners received 78% of benefit in twenty five person company.


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Case Study: Carve-Out

Situation: Snow removal company has high seasonal workers, offers a 401(k), has high tax liability, and needs a bigger deduction.

Complication: Did not want to take benefit away from staff, but wanted more for core team and full time/year-around employees.

Result: RSG implemented a defined benefit plan with a carve-out feature which had differing eligibility participation that allowed for exclusion of seasonal employees and allowed for over-funding to address tax liability in 2010 and 2011.


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Industry News

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What’s New - The Markets (Slide from last Group Meeting)

The Markets (YTD Returns as of October 1, 2010, source www.morningstar.com) S&P 500, +4.35 % DJIA, +5.98 % Russell 2000, + 9.63 % MidCap 400, + 11.83 % EAFE, + 1.51 % EMFI, + 9.76

VIX 2010 has seen historic volatility Led by continued unemployment pressures, Europe, bouts of pessimism… Led by better than expected earnings, GDP growth, and some The “Roller Coaster” analogy (January estimate 6 – 8%)

What’s in the News Consumer Confidence remains low but improving Europe Debt Issues BP


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401(k)’s in 2010 and Beyond

What we have seen in 3 Quarters of 2010? Unemployment still high in August 2010 at 9.7%

(Source: Bureau of Labor Statistics)

Continued discussions around 401(k) Reform

ROTH vs. Traditional

401(k) ROTH Conversion passed

The “Issue” around Target Date Funds


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401(k)’s in 2010 and Beyond

The 401(k) Fee Disclosure Rules

New fee disclosure reform

Asset charge?

Participant fee?

Advisory vs. broker/dealer fees built into fund expenses (I.e. R-Shares)

Service Agreement


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Options

What we are watching Real Estate (risk) Small Cap (History vs. Numbers) International, Emerging Markets The Danger in Cash

What we like Modest growth Technology (the unemployment solution) International, Emerging Markets Energy (BP drag)

Strategy Evaluation Have goals changed? Have you been positioned for recovery or recession “The definition of insanity is doing the same thing again and again and expecting different results.”

Albert Einstein


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Recession and the Dow (source: Wall Street Journal)

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Summary

Who Is RSG? Core Competency

Case Studies Consulting vs. “Doing”

What’s New Roller-coaster ride

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So What?

Is Your, or your clients’, Plan Customized:

Funding Levels for Key Employees/Owners

Demographic/Census Issues

Repeatable Profits & Cash Flow

Understand Flexibility & Restrictions

Consulting Services:

Create Strategy that Matches Business Objectives

Monitoring Regulatory Changes to Ensure Compliance (EGTRRA rewrites and PPA funding)

Advise on Options

There are a lot of sellers of retirement plan products and services. There are very FEW qualified pension consultants.


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How do you, and your clients, fair?

Run a free Plan analysis to look at Plan maximization and fiduciary oversight.

RSG is always available, 866-352-7731

1. Steve Scott, Managing Partner x 21

2. Scott Emering, Partner x11

3. Ed Emering, Partner/FSA

4. Cynthia Baldwin, ASA

5. Julie Yanez, Sr. Pension Consultant

6. Bob Kibble, Pension Consultant

7. Christie Cheng, Education & Relationship Manager

8. Elvia Sanchez, Education & Relationship Manager (Bi-lingual)

9. Ian Emering, Associate
