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Presenters:
Cynthia L. Keith, CFA Executive Director-Investments and Senior Portfolio Manager Oppenheimer & Co. Inc. Erin Hultman, CPA, MST Senior Manager-Audit and Assurance Services Tate & Tryon, CPAs and Consultants
Final Regulations
Effective for plan years beginning on or after January 1, 2009 Written plan document Nondiscrimination rules Closes the gap between 403b and 401k plans Form 5500 filing requirements
Plan document
Must be written Stand-alone or collection Must include material provisions Eligibility Benefits Investment options
Nondiscrimination rules
No more good faith Universal availability
Attorneys for the plan Accountants for the plan Actuaries for the plan
ERISA v. Non-ERISA new regulations did not impact directly Non-ERISA plans
Church & governmental plans Employee deferral ONLY plans Increased scrutiny by DOL of sponsoring organization
ERISA plans Small plan v. large plan 80/120 rule Schedule H eFiling required
Transition guidance
Revenue Procedure 2007-71
Contracts issued prior to 1/1/2005 Contracts issued 1/1/2005 1/1/2009 reasonable good faith effort Contracts issued after 1/1/2009 include in plan assets
What is fair value? GAAP requirement Old definition of fair value New definition of fair value
1. Not exchange prices but directly or indirectly observable 2. What market participants are using 1. The plans assumptions about market price 2. Based on information available 3. May rely on investment manager
Internal controls
Process for determining fair value Select appropriate valuation method Identify and support assumptions
Practical steps
Obtain SAS #70 report 1. Type 1 report 2. Type 2 report Caveats 1. Without SAS #70 2. Mutual funds and marketable securities 3. SAS #70 does not cover alternative investments
Types of audits
Limited scope Full scope
Audit opinions
Unqualified full scope only Qualified possible as a result of missing plan information Disclaimer due to limited scope audit Disclaimer due to other limitations Adverse What opinions will DOL accept on Schedule H? Good faith effort
Questions?