MIRA Fiduciary Audit Introduction

ERISA FIDUCIARY COMPLIANCE AUDIT SERVICES

MillenniuM Investment and Retirement Advisors, LLC (“MIRA”) is an unaffiliated ERISA defined independent fiduciary to 401(k) and other defined contribution plans. ERISA takes state trust law to the highest level--from “prudent man” to “prudent expert” standards. From the DOL:

“Unless fiduciaries possess the necessary expertise to manage investments, they would need to obtain advice of qualified, independent experts.”

-U.S. Department of Labor Regulations § 2509.95-1(C)(6)

MillenniuM is larger in staff size than 85%

of other firms while being federally

regulated/licensed, bonded by Great

American and insured by CNA.

• As Enrolled Agents, CPAs and Responsible Plan Fiduciaries, we talk directly to and represent our clients to the IRS and Labor Department during investigations and examinations.

• Upon request, we are responsible for reviewing, signing and filing IRS Forms 5500s.

• Unlike almost all brokers and advisors who are “self-regulated” under FINRA, we are regulated Federally (by the SEC) and licensed, bonded and insured

• Our attorneys, IRS Enrolled Agents & CPAs ensure plan compliance by performing three (3) critical Cost, Conflict or Compliance tasks.

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IN ADDITION, MIRA’S PROFESSIONAL STAFF CURRENTLY HOLDS THE FOLLOWING PROFESSIONAL DESIGNATIONS:

From 2002 – 2011, the DOL assessed and penalized retirements over $120m while in 2012 alone, the DOL collected over $1.2b and the vast majority of the issues had very little to do with the investment performance of the plan.

While a tremendous amount of time is spent discussing the liability related to the investment performance of a retirement plan, the actual plan operation and administration is extremely important. The IRS and DOL have authority to impose penalties and fines for plans that have operational or reporting errors even when the investments are extremely prudent. And for many plans, the liability associated with operational errors can be much more costly than issues related to investment choices.

Extracted from the DOL’s request for information, question 20 asks for any ERISA compliance review. It is critical for plans sponsors to understand some basic rules, specifically the Employee Retirement Income Security Act (ERISA). ERISA sets standards of conduct for those who manage an employee benefit plan and its assets (called fiduciaries).

The duty to act prudently is one of a fiduciary’s central responsibilities under ERISA. It requires expertise in a variety of areas, such as operations and compliance. According to the DOL, if a plan sponsor is lacking that expertise, a fiduciary will want to hire someone with that professional knowledge to carry out those functions. Prudence focuses on the process for making fiduciary

decisions. Therefore, it is wise to document decisions and the basis for those decisions.

DESCRIPTION OF FIDUCIARY COMPLIANCE AUDIT SERVICES

• IRS Form 2848 Designated Representative & Compliance Attestation

• Ensure "Monitoring Fiduciary" performs adequate review/monitor of CSPs

• Ensure 404(a)5 notices sent

• Ensure Age 70.5 payments occur timely

• Ensure BrightScope reviewed and updated

• Ensure cash-outs occur to under $5,000 balance employees

• Ensure deferrals deposited timely

• Ensure plan operates in accordance with document

• Ensure ERISA Budget & forfeiture accounts emptied

• Ensure the cheapest share classes available are being offered

• Ensure IRS Form 5500 reviewed, signed and filed

• Ensure loan defaults performed annually

• Ensure QDIA notices sent

• Ensure Safe Harbor (if applicable) notices sent

• Ensure Summary of Material Modifications notices sent

• Ensure Summary Plan Description maintained, accurate and delivered

• ERISA Sect 411 review of providers for felonies, etc.

• Investment Policy Developed/reviewed

• Issue Certification of Reasonable Fees for all CSPs

• Renew Fiduciary Liability policy

• Review “party-in-interest transactions” for auditors

• Review all Covered Service Provider contracts

• Ensure Errors And Omission declaration for all venders

• Update and maintain Treasury Cir. 570 fidelity bond