Clarks Green Office
285 East Grove Street
The financial planners at Capstone Wealth Management Group, LLC are uniquely positioned to assist plan sponsors and administrators of qualified and non-qualified retirement plans for businesses of any shape or size.
At Capstone, we provide business owners and corporations with retirement plan advice on many levels. From Fiduciary Planning to Record Keeping and Plan Administration, our services are constantly evolving. The retirement plan marketplace is ever changing and, because the rules and regulations that plan sponsors need to understand and be in compliance with are signed into law by Congress, it is vital to maintain constant oversight on behalf of plan participants.
The numbers speak for themselves: The retirement plan space experienced vast regulatory overhauls in the last few years. In 2014, the Department of Labor, for example, increased plan audits and investigations, where 65% of the plan sponsors that were audited were subject to fines (Source: US Dept. of Labor 2014 Fact Sheet).
In a typical plan setup, there are more than 1,000 record keeping items that require constant oversight and review. At Capstone, our core retirement principles are founded on the belief that plan design decisions are among the most important choices that a plan sponsor will make. Capstone, alongside its preferred retirement plan vendors, will partner with you and your participant-employees to determine the best plan design to meet your needs.
Benchmark Existing Retirement Plan (Services Provided, Mutual Fund Performance, Fees & Costs)
Conversion/Setup Management (Plan Design Guidance, Dedicated Installation Coordinator, Custom Timeline, Quality Control,Enrollment Services)
Plan Administration (IRS Compliance & Support, Census Updates, Payroll Integration, Contribution Processing)
Compliance Services (Form 5500 Prep, Compliance & Eligibility, Year-End Support, ERISA Consultations)
Plan Design (Basic Matching Plans, Safe Harbor Plans, Integrated SS Plans, Age-Weighted or New Comparability Plans)
Fiduciary Responsibilities (3(21) or 3(38) Agreements, DOL/ERISA/Regulatory Compliance)
Participant Education (Online Education Resource Center, Onsite Enrollment, Educational Seminars, One-on-One Meetings)
Investment Flexibility (Impartial Mutual Fund Selection, Transparent Expense Disclosure, ETFs, Company Stock)
Ongoing Support (Financial Planning Advice for Plan Sponsor, Participants, & Non-Participants)
Wealth Management Services ("Financial Wellness")
Plan Fees: (Payment of plan fees from participant accounts has resulted in heightened levels of scrutiny from both Regulators and Plaintiff’s Attorneys)
2004 - ERISA Advisory Council Report: (Concludes that the shift to asset-based fees makes it difficult for plan sponsors to understand how plan fees are paid)
2005 – SEC Report: (Based on industry-wide investigation of mutual fund practices raises concerns about disclosure of potential conflicts of interest)
2006 - GAO Report: (States 401(k) participants may be losing thousands of dollars in retirement savings because of fees charged)
Plaintiffs Attorneys: (A series of class action lawsuits have been filed challenging service provider and investment-related fees charged to 401(k) plans. Many of the firms included in that class action are very large, global companies, however law firms have recently beentargetting smaller plans as well)
ERISA Section 3(38): (Investment Advisor assumes sole fiduciary liability for investment selection and monitoring. A plan sponsor’sliability is limited to selction and monitoring of the investment advisor)
ERISA Section 3(21): (An individual is a fiduciary "to the extent" that: he or she excercises discretionary control, renders investment advice, has any authority or responsibility in the administration of the plan)
ERISA Section 3(16): (Designated plan sponsor)
Fiduciary Duties: (Loyalty, Exclusive Benefit, Prudence, Diversification, Documentation)
Plan Sponsors: (Many executives and business owners sponsoring qualified retirement plans, don’t have a comprehensive understanding of their fiduciary responsibility under the Employee Retirement Income Security Act of 1974 (“ERISA”). This lack of knowledge istroubling because any breach of fiduciary duty can result in personal liability)
Delegation: (ERISA specifically allows for the delegation of the fiduciary standard and, in fact, encourages delegation to an independent investment fiduciary. If the fiduciary standard is not delegated, a plan sponsor, despite meeting all of ERISA requirements, still remains fully responsible and liable for the prudent selection of the investment options for plan participants)
Investment Fiduciary: (Hiring an independent investment fiduciary greatly reduces the fiduciary burden on business owners. At Capstone,we are “co-fiduciaries”, accepting the fiduciary status and discretion over the assets to be managed. Many “brokers” or “agents” working with banks, insurance companies, or broker-dealers don’t meet that same criteria, and are not “co-fiduciaries” on qualified plans)
Liability: (Department of Labor – Pension and Welfare Benefits Administration Interpretive Bulletin 96-1: “Fiduciaries of an employeebenefit plan (such as a 401(k) plan) are charged with carrying out their duties prudently and solely in the interests of the participants and beneficiaries of the plan, and are subject to personal liability to, among other things, make good any losses to the plan resulting from a breach of their fiduciary responsibilities.”)
Litigation Risk: (Concern for litigation risk has been significantly heightened due to the increase of suits brought upon plan fiduciaries by beneficiaries of defined contribution plans. A survey constructed by Pacific Investment Management Co. revealed that “64% ofexecutives listed litigation risk and meeting participants' retirement goals as first-or second-most important” to their respective plans).
Plan Fiduciaries vs. Plan Beneficiaries: (Although results from recent suits have varied, defending allegations can be extremely expensiveand distracting to corporate operations as well as significantly impacting employee trust and moral).
Fiduciary Obligations: (The fiduciary obligations to plan beneficiaries have been highlighted and at times even broadened by recent plan lawsuits. Transitions to “DC” plans throughout the industry has caused major shifts in responsibility. Under a Defined Contributionstructure, investment risk is assumed solely by the employee while the plan fiduciary has now undertaken a significant increase inliability to participants).
Common Allegations: (Unreasonable (Excessive) Fees, Investment Options, Conflicts of Interest).Reperations: (The Department of Labor website reports that penalties in excess of $1 Billion annually have been common for most of the past decade)
Benchmark Existing Retirement Plan: (Services Provided, Mutual Fund Analysis, Fees & Costs)
Conversion/Setup Management: (Plan Design Guidance, Dedicated Installation Coordinator, Custom Timeline, Quality Control,Enrollment Services)
Fiduciary Responsibilities: (3(21) or 3(38) Capacity, DOL/ERISA/Regulatory Compliance)
Education: (Educational One on One Meetings with all Elgible Plan Participants)
Plan Administration: (IRS Compliance & Support, Census Updates, Payroll Integration, Contribution Processing)
Compliance Services: (Form 5500 Prep, Compliance & Eligibility, Year-End Support, ERISA Consultations)
Investment Flexibility: (Impartial Mutual Fund Selection, Transparent Expense Disclosure, ETFs, Company Stock)
Investment Committee Formation: (Committee Created between Corporate Representative and Capstone Advisors to Review and AmmendInvestment Options)
Investment Policy Statement Creation: (Creation of Document Describing Duties and Relationship Between Capstone Advisors and CorporateRepresentatives)
Ongoing Support: (Financial Planning Advice for Plan Sponsor, Participants, & Non-Participants)