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Portsmouth Chamber Business Toolkit Series
Portsmouth Chamber Business Toolkit Series
Portsmouth Chamber Business Toolkit Series
Portsmouth Chamber Business Toolkit Series
Portsmouth Chamber Business Toolkit Series
Portsmouth Chamber Business Toolkit Series
Portsmouth Chamber Business Toolkit Series
Portsmouth Chamber Business Toolkit Series
Portsmouth Chamber Business Toolkit Series
Portsmouth Chamber Business Toolkit Series
Portsmouth Chamber Business Toolkit Series
Portsmouth Chamber Business Toolkit Series
Portsmouth Chamber Business Toolkit Series
Portsmouth Chamber Business Toolkit Series
Portsmouth Chamber Business Toolkit Series
Portsmouth Chamber Business Toolkit Series
Portsmouth Chamber Business Toolkit Series
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Portsmouth Chamber Business Toolkit Series

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  • 1. March 16, 2011<br />Presentation by:<br />Steve Scott<br />Managing Partner<br />Retirement Solution Group, LLC<br />
  • 2. Agenda<br />Who Is RSG?<br />Idea<br />Case Studies<br />Next Steps<br />
  • 3. Who Is RSG?<br />
  • 4. Retirement Solution Group, LLC<br />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. <br /> This is our CORE business.<br />Retirement Plan consulting firm<br />Administers over 250 plans<br />Co-Fiduciary on more than $200,000,000<br />Participant Services for more than 8000 participants<br />2 federally enrolled actuaries on staff <br />2 on-staff enrollment & education support available (Spanish speaking available)<br />We are fully independent<br />Regional offices in Portsmouth, Chicago, and Florida (business in 22 states)<br />Members of NIPA, ASPA and CFDD<br />99% (+) of firm revenue comes from qualified retirement plan related business<br />Retirement Solution Group<br />
  • 5. Definition of a “Fiduciary”<br />You are a fiduciary of an employee benefit plan if you meet any one of the following tests:<br />You exercise discretionary authority or control over plan assets or plan management - “Functional Fiduciary” <br />You are specifically identified in the written documents of a plan as a “Named Fiduciary”<br />You have discretionary responsibility in the administration of the plan.<br />You manage the plan or its assets or render investment advice for a fee.<br />
  • 6. Roles & Responsibilities of Plan Fiduciary <br />Cost<br /><ul><li>Breakdown
  • 7. Prudent Man Standard
  • 8. Investment Related Expenses
  • 9. Support Related Expense
  • 10. PERA Opportunities</li></ul>Technical <br /><ul><li>Proper valuation work
  • 11. Tax and relevant government filings
  • 12. Plan Document and SPD compliance
  • 13. Methodologies
  • 14. Best Practices</li></ul>Investment <br /><ul><li>Co-Fiduciary
  • 15. Benchmarking
  • 16. Conflicts of Interest
  • 17. Investment Policy Statement (IPS)
  • 18. Adherence to IPS
  • 19. Education</li></ul>Investments, Recordkeeping, and Participant Reporting Services<br />Client<br />Independent Pension Consulting Services<br />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. <br />Retirement Solution Group<br />
  • 20. Idea<br />
  • 21. The Idea<br />While a “Selling Event” probably will be a very significant financial event for a business owner, will it be enough?<br />Take monies out of business in a strategic manner prior to transaction event<br />Create a customized solution<br />Defined Contribution (skewed to business owner using various formulas, most notably new comp)<br />Defined Benefit (Largest top-line deduction often available to owners but needs to be managed NOT sold!)<br />RSG can coordinate with advisors, consultants, CPAs, attorneys… to create the supplement to transaction.<br />
  • 22. Case Studies<br />
  • 23. Case Study: Optimizing Profit Sharing Allocations<br />Situation: Local dentist sponsored a profit sharing plan with a standard pro-rata allocation (% of pay) set-up by his accountant in the late 80’s . <br />Complication: Maximizing the dentist contributions at the IRS individual aggregate limit ($49,000 in 2010) would required a 20% of pay contribution to all eligible employees.<br />Result: RSG redesigned the Plan using a “cross-tested” profit sharing contribution reducing the required contribution to the staff to 5% of pay. Client saved $58,000 (25% of total contribution) in year 1.<br />Retirement Solution Group<br />
  • 24. Case Study: Defined Benefit Plan – Retention <br />Situation: Private school, was looking for a way to reward loyalty and service through a retirement plan program.<br />Complication: IRS limits the ability to reward service in defined contribution plans through eligibility provisions (maximum of one year and two entry dates) and a maximum allowable vesting schedule (six year graded or three year cliff vesting).<br />Result: RSG implemented a defined benefit plan with a benefit formula structured to pay and years of service – 1% of pay times years of service up to 25 (maximum benefit is 25% of pay with 25 years of service).<br />Retirement Solution Group<br />
  • 25. Case Study: Retirement Plans – Overlay Strategy<br />Situation: Three person consulting company with one owner/President driving revenue and making significant monies.<br />Complication: Asked his “advisor” how much he could put in to max out the tax deduction as his earnings were more than $1mm. He was told $11,000 was his max contribution.<br />Result: RSG had the client terminate the SIMPLE prior to the calendar year starting anew and implemented a DC/DB combo plan driven by DB deductions. He is scheduled to receive $242,000 (approx.) in 2011 tax deduction, and 92% of total benefit. <br />Retirement Solution Group<br />
  • 26. Case Study: Retirement Plans – Overlay Strategy<br />Situation: Sole attorney in his mid-40’s with no staff was putting away $49,000/year into a profit sharing plan and was looking for increased deductions.<br />Complication: The attorney was already maximized at the IRS individual aggregate limit for his Defined Contribution Plan (2010 limit).<br />Result: RSG implemented a Defined Benefit Plan in addition to the Defined Contribution plan. Year 1 contributions/deductions were $111,000 under the Pension Protection Act of 2006 – over a 100% increase.<br />Retirement Solution Group<br />
  • 27. Case Study: Designed Based “Carve-Out”<br />Situation: Radiologist group had Money Purchase Plan, which they maximized to the DC limit, and had to give a flat allocation to all staff. <br />Complication: Radiologists make a lot of money, and they needed a bigger deduction. Plus, they wanted to give a fair, but not flat, staff contribution.<br />Result: By implementing a “Carve-Out” plan design solution we offer the senior doctors an additional $165,000 deduction via Cash Balance Plan. The 401(k)/Profit Sharing Plan is both cross tested for group allocation and for coverage testing, and lowered their average staff contribution from 10% to 7.5%. No staff or non-owners are regular participants in the Cash Balance Plan. In addition, the Cash Balance Plan is individually allocated so that each doctor can decide appropriate allocation level. Note 40% coverage.<br />Retirement Solution Group<br />
  • 28. Summary<br />Who Is RSG?<br />Core Competency, Institutional Partnership Experience<br />Case Studies<br />Substantial, and Unique, Value to Business Owner<br />Idea<br />Play Defense – Create Substantial Accounts to “Compliment Sale”<br />Play Offense – Create A Plan With Advisors and Transaction Consultants<br />Consultative vs. Transactional – Many factors can better or ruin a “Plan Design”<br />
  • 29. So What?<br />The Number of Service Businesses Scheduled for a Transaction Event Creates a “Problem”<br />You can Fix These Problems By: <br />Have a “Transaction Plan” <br />Ensure Financials are “In Order”<br />Look for Creative Tax Strategies Today to Supplement Tomorrows “Pay Day”<br />Work With Specialists<br />Next Steps: <br />Analyze Situation<br />Select a Path<br />Create a Project Calendar<br />Retirement Solution Group<br />
  • 30. RSG Support Team<br />RSG is always available, 866-352-7731<br />Steve Scott, Managing Partner x 21<br />Scott Emering, Partner x11<br />Ed Emering, Partner/FSA<br />Cynthia Baldwin, ASA<br />Julie Yanez, Sr. Pension Consultant<br />Bob Kibble, Pension Consultant<br />Christie Cheng, Education & Relationship Manager (Bi-Lingual) x31<br />Elvia Sanchez, Education & Relationship Manager (Bi-Lingual) <br />Ian Emering, Associate<br />Dawn Vazquez, Associate x 51<br />Retirement Solution Group<br />

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