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Step 2: Documentation

Detailed Fiduciary Audit Checklist

  1. Plan Documents
    1. Plan Trust Documents
    2. 401(k) Plan Document - with all amendments, addenda and attachments.
    3. 401(k) Plan Summary Description (“SPD”) – including all amendments, addenda and attachments.
    4. 401(k) Summary of Material Modifications (“SMM”) – to the 401(k) plan with all amendments, attachments
      and addenda.
    5. Adoption Agreement – if proto-type plan.
    6. Summary Annual Reports (“SAR”) - for past seven plan years.
    7. Trustee Reports –for past seven plan years.
  1. Government / Regulatory
    1. Internal Revenue Service’s Form 5500 – as filed for the past seven plan years
    2. Audited Financial Statements – that accompany the 5500’s and any applicable notes.
  1. Journals and Ledgers
    1. Journals, ledgers, account statements (including bank and trust statements), appraisals and other evidence to support all asset/investments
  1. Section 404(c)
    1. List of investments offered to plan participants (must be a minimum of three investment choices).
    2. Description of frequency of participant’s ability to transfer assets among investment choices. (Quarterly is minimum).
    3. Statement to Participants of Intent to be 404(c) Compliant.
    4. Description of Investment Alternatives, Risk and Return of each Alternative and a copy of the Prospectus, when applicable.
    5. Instructions for How Participants Can Obtain Further Information.
  2.  401(k) Investment Policy Statement – prepared in sufficient detail to include the following information:
    1. Evaluation of the specific needs of the plan and its participants.
    2. Investment objectives and goals of the plan.
    3. Definition of duties and responsibilities of all parties involved. ( also referred to as Fiduciary Committee Charters)
    4. Defined due diligence criteria for selecting investment options for the plan
    5. Classes and styles of investments authorized. Restrictions on investments
    6. Standards and benchmarks of investment performance to which the 401(k) plan assets are compared.
    7. Policy and procedures related to the hiring, monitoring and replacement of investment managers.
    8. Procedures for monitoring and controlling investment expenses.
  1. Third Party Service Providers
    1. Investment Management
      1. Copies of all Investment Management Agreements.
      2. Copies of all Correspondence - to current, former, prospective and potential investment management providers.
      3. Documentation of due diligence process used to select investment managers.
      4. Investment manager reports on performance, fees and compliance to investment guidelines.
      5. Plan Sponsors Periodic Review and Monitoring of Investment Manager Performance
    2. Consultants / Asset Allocation / Actuarial / Recordkeeping / Custodial Service Providers Cont.
      1. Requests for Proposals (“RFP’s”) – copies of all RFP’s with all related correspondence between plan and all former, current, prospective and potential, consultants, asset allocation, actuarial and/or recordkeeping and custodians.
      2. Competitive Bid Documentation - and all related correspondence.
      3. Copy of All Service Agreements with current and former consultants, asset allocation advisor, actuarial, recordkeeping and custodial providers.
      4. Correspondence – copies of all correspondence to current, former, prospective and
        potential consultants and asset allocation advisory firms.

7.   Plan Procedures and Minutes of All Meetings

    1. Fiduciary Committee charter (if applicable)
    2. Investment Committee Meeting Minutes
    3. Administrative Committee Meeting Minutes
    4. Plan Procedure Manual to include:
      1. Enrollment forms and procedures
      2. Loan forms and procedures
      3. Hardship withdrawal forms and procedures
      4. QDRO procedures
      5. Claims procedures
      6. Other forms used including rollover requests, plan distributions, etc.

Vendor Search Process

  • Conduct a confidential comprehensive market assessment and 401(k) provider search evaluating the full universe of 401(k) providers (approximately 130) within pathfinder data base in the context of Regional Water Authority’s goals objective preference etc, inclusive of any providers (banks etc) which  may wish to also consider.  The search will be inclusive of an evaluation of services, provider fees, investments, services, optional services, service/fee guarantees etc.
  • Meet with South Central Connecticut Regional Water Authority to review and identify requirements, preferences and overall focus for provider search.
  • Participate in calls/meetings to further refine South Central Connecticut Regional Water Authority’s priorities and preferences as captured within the search questionnaires
  • Conduct a confidential search of 130 providers which South Central Connecticut Regional Water Authority has selected based upon it’s criteria, provide comprehensive summary analysis of all findings with recommendation based upon the committee’s defined  priorities, provide related industry survey data on providers, provide reconnaissance from other searches we have conducted in 2005 Pathfinder conducted approximately $ 8 Billion in searches of which our team collectively represented $ 4 billion of the $ 8 Billion in searches
  • Coordinate Finalist Interviews
  • Attend Finalist interviews participate in all committee deliberations and negotiations with top 2 finalists seeking to derive the most for the least for the benefit of South Central Regional Water Authority  and its plan participants

Implementation/Conversion Support Work (Only if a vendor change occurs)

    • Participating in all conference calls and meetings relating to document reviews, comparisons, document production, 404(c), Fiduciary Support and Best Practices Guidance.