Summary

• Protect your company from benefits plan-related risks of government sanctions, fines or penalties.
  Protect yourself personally and professionally from exposure to liability.
• Ensure efficiency of company operations both in time and cost.
• Ensure compliance with the requirements of Sarbanes-Oxley, ERISA and form 5500 filings for internal controls and full operational compliance of your retirement plan(s).
• Keep total retirement plan costs as low as possible and fully transparent while delivering a plan of the highest quality.
• Provide your participants with the best opportunities for retirement accumulation.
• Manage or eliminate the risk to you and other plan fiduciaries.

SummitPlan™ has been specifically designed and built to aid you in this mission.

How does SummitPlan™ protect me personally, and my company from fiduciary liability?

SummitPlan™ Offers 5 LAYERS of protection:

SummitPlan™ Installs Required Internal Controls.

SummitPlan™ includes implementation of the Fiduciary Audit® Protection Program. This process has been developed by Jeffrey Mamorsky, J.D., Chair of the ERISA Department at Greenberg, Traurig LLP in New York. Mr. Mamorsky was one of the original authors of the ERISA legislation. The Program is proven and already in use at Fortune 500 companies.
Most firms providing retirement plan administration services do not guarantee the completeness or accuracy of their services – they process information you provide to them. There are typically few or no processes in place to assure their clients that the plan is being administered in accordance with the terms of the plan documents. Most ERISA attorneys admit that many plan sponsors do not always operate their plans in accordance with the terms and conditions of their documents. Because most companies outsource their plan’s administration, they do not have internal controls in place to assure operational compliance. ERISA requires plans of both public and private companies to be in operational compliance with the plan’s terms and conditions. If there are no internal controls in place, opportunities arise for Sarbanes-Oxley violations. In addition, IRS/DOL investigations which uncover fiduciary and/or administrative/operational error can generate substantial sanctions or fines and costly remedial action.
All such consequences consume company staff time, increase internal/legal costs and exposure to corporate and personal liabilities. Plaintiff’s counsel might use operational defects in the context of ERISA litigation as a testament of fiduciary inattention and possible negligence.
The Fiduciary Audit® Protection Program is the foundation for a comprehensive, ongoing operational compliance audit and internal controls process, not just a one-time audit event. The process is implemented both at the plan sponsor level and at SummitPlan™’s administration providers. SummitPlan™ includes not only installation of this process, but ongoing monitoring/consulting for your company by Denali Fiduciary Management professionals to ensure its continuous operation and the plan’s compliance.

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SummitPlan™ Includes the Fiduciary Assistance and Compliance Systems© (FACS™).

The FACS™ Program is a comprehensive system for the monitoring and documentation process necessary to assure a best fiduciary practices standard of fiduciary governance. The system includes 150+ pages of well-defined certifications, and disclosures which document procedural process. The very presence of such documentation will serve to enhance the quality of your decision making. It may also deter litigation which depends on the absence of prudent processes and documentation that illustrates it.
The FACS™ Program is the foundation of the ERISA fiduciary governance training available through Financial Executives International at fei.org. FEI is the largest association of financial officers in the country with over 15,000 members.

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In SummitPlan™, the duty of prudence is demonstrated through core investment strategies firmly rooted in low cost indexing investing and risk managed portfolios. Each investment option has undergone a thorough evaluation process to a prudent investor and fiduciary standard of care.  Special care is given to risk mitigation, cost structure, diversification and risk reward suitability for each plan:

The recent investigations of misconduct by mutual fund companies have uncovered a variety of flaws in the use of their business model for ERISA retirement plans:

• Expenses are not readily disclosed.
• Funds have an exemption to ERISA fiduciary status which allows them to place the fund manager’s self interest above your plan participants’ best interests.
• They can engage in off balance sheet transactions
• Counter party risk assessments are proprietary and not subject to full disclosure rules.
• With limited disclosures, you don’t even know where the money is really invested.
• Managers, strategies and buy-sell disciplines can be changed at virtually any time.

In contrast, SummitPlan’s™ investments are designed to champion both investment results and fiduciary standards.

• SummitPlan™ uses low cost indexing investing and risk managed portfolios as the backbone of its investment menu. This, in combination with deep fiduciary processes reduces exposure to liability for plan fiduciaries and promotes the long-term interests of plan participants.
• There are no product marketing/branding agendas which compromise the high fiduciary standards embedded in the investment management process.
• SummitPlan™ customers access the highest quality investment management in the marketplace at a reasonable cost. Portfolios are managed for both performance and risk.
• This risk assessment function is both prudent and more sensible than age weighted or target retirement portfolios that are proprietary offerings from mutual fund vendors. On close inspection, such mutual fund “branded” products may be more of a marketing exercise than a true portfolio management solution.

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Denali is Your True Fiduciary Partner

Denali FM’s professional team and advisors have over 200 years of collective experience in all areas pertinent to retirement plan management, investments and fiduciary governance. We serve as a fiduciary to your plan to protect your interests and the participants’.

We also provide continuous consulting and monitoring services of the installed fiduciary processes. Denali’s fiduciary status assures you that:

• Denali executives and support staff operate in the best interests of your plan and your fiduciaries.
• Fiduciary process and protection is completed.
• There are no hidden compensation arrangements.
• All Denali and SummitPlan™-related services and fees are fully disclosed in writing.

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Optional Total Fiduciary Management

SummitPlan™ offers you the option of having Denali professionals assume complete responsibility for all retirement plan management by serving as the plan’s independent fiduciary. This relieves you, and your colleagues, of all plan management responsibilities and duties. You are also relieved of fiduciary liability on a forward-looking basis. By leaving this in the hands of experienced professionals, this SummitPlan™ option allows you to eliminate personal risk and focus on more productive business management tasks.

Denali’s expertise assures you of :

• Fiduciary Audit® Protection Program installation.
• Fiduciary Assistance & Compliance Systems© installation.
• Institutional Investment Portfolios managed to a Prudent Investor standard of care to obtain the best returns at reduced risk for plan participants.
• Denali Fiduciary Management co-fiduciary or named independent fiduciary status and extensive consulting/support services.

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In SummitPlan™, the duty of prudence is demonstrated through core investment strategies firmly rooted in low cost indexing investing and risk managed portfolios. Each investment option has undergone a thorough evaluation process to a prudent investor and fiduciary standard of care.  Special care is given to risk mitigation, cost structure, diversification and risk reward suitability for each plan. 
This, in combination with deep fiduciary processes reduces exposure to liability for plan fiduciaries and promotes the long-term interests of plan participants.

This is a substantive difference in retirement plan investment services. Historically, such quality and expertise has not been accessible by small and mid-market retirement plan sponsors. In addition there is greater transparency and adherence to the manager’s investment discipline embedded in the operation of these institutional investments than one generally finds in the mutual fund world.

This structure, derived from an ERISA fiduciary discipline and executed by professionals who actively manage risk in a retirement plan environment translates into increased opportunity for employee retirement accumulation. Though future investment performance cannot be guaranteed, use of such world-class expertise is the most conservative and constructive choice a 401(k) fiduciary can make. This reduces fiduciary and board risk of employee litigation or government investigation.

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The operational and governance processes in SummitPlan™ assure you that your plan is being operated to a best practices fiduciary standard However, once you have a fiduciary duty, even if that duty is outsourced to an independent fiduciary who assumes all risks for plan management and operations, the appointing fiduciaries will still retain a duty to monitor the activities of the independent fiduciary. Denali Fiduciary Management can serve as an independent fiduciary at your request. Indeed, we believe that such a strategy is conservative, prudent and efficient – more efficient than an Administrative Committee whose focus, and time should properly be devoted to running your business.

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The professionals at Denali Fiduciary Management provide full service implementation and remain involved on an ongoing basis. Our first step is onsite installation of the compliance and controls processes. Then, our specialist teams provide ongoing consulting support, monitoring of the processes and annual compliance re-certification. We also attend plan sponsor Retirement Committee meetings. SummitPlan™ also hosts an annual client conference to update you on SummitPlan™ operations and regulatory/legal issues.

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All consulting and support services are automatically built in to SummitPlan™ pricing. There are no billable hours or hidden fees. You and your staff are encouraged to ask for and receive any assistance needed. This further assures that your fiduciary protections and compliance are complete.
Executives, consultants and staff of Denali Fiduciary Management are not attorneys and do not practice law. SummitPlan™ consulting and support services do not extend to providing legal opinions or legal advice.

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Simply, it is not in most vendors’ best interests to offer a program like SummitPlan™. Existing vendors in the retirement plan business have two major conflicts at odds with the best interests of plan sponsors and participants. First, the vendor community has historically avoided becoming a fiduciary to your plan. That legal status and responsibility is not embedded within their business culture or operations. By avoiding fiduciary status, the vendors are legally free to place their own business interests ahead of yours and your participants.
Second, the status quo is preferred due to profit and revenue concerns. Vendors offering retail mutual funds in an institutional (retirement plan) environment resist offering a lower-cost, institutional investment approach which may cannibalize their existing, higher-margin business and reduce their retirement plan profit margins.

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The recent mutual fund scandals and investigations have revealed that the investment world does not always act in the best interests of retirement plan fiduciaries and shareholders (participants). This behavior continues today with the mutual fund industry’s high expenses, lack of transparency, brokerage soft dollars, revenue sharing, 'pay to play' schemes, shifting investment styles, and product branding efforts. None of these factors operate in either the plan sponsor’s best interests or in the best interest of the participants as required by the Exclusive Benefit Rule of ERISA.

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SummitPlan™ investment management services are provided by professionals providing an investment approach with institutional investment funds. The investment management objectives are to provide specialized investment expertise to participants at a very low, institutional cost and to offer a variety of risk-based institutional portfolios from which participants can choose.

Portfolios are fully managed for participants and alleviate the need for asset allocation decisions, strategic/tactical decisions, portfolio rebalancing and educational efforts designed to have participants attempt to manage their own portfolios.

Participants will outsource their investment management to institutional investment professionals whose processes are backed by extensive academic research and prudent process.

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SummitPlan™ makes life easier for both HR/Benefits executives and employees. With focus on using the risk-based managed portfolios, employee enrollment is quick and simplified. The employee makes only one investment decision – “How much risk do I want to take?” There is less reliance on education about each asset class option available, asset allocation, how to construct a portfolio, rebalancing, strategic/tactical reallocation, etc. Institutional portfolio management is provided for the employee and managed by professionals at low institutional pricing.

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IIf your plan is like most that offer lifestyle or target retirement funds, these funds are built around the proprietary mutual funds of a vendor or only a selection of funds from the total funds available to the plan. This is different from a risk-based institutional approach.

Risk-based portfolios better address specific employee investment needs than target maturity funds. The target maturity/retirement approach builds in to the asset allocation a misplaced assumption that every employee of the same age (or years to retirement) has the same tolerance for risk. Risk-based portfolios assume, more appropriately, that each employee (even those of the same age) will have a different tolerance for risk. Compared to age-based or target retirement products using retail mutual funds, SummitPlan managed portfolios:

• Are built around superior institutional investment funds so investment costs are reduced. Low costs are a significant factor in improved returns.
• Eliminate the additional expenses of retail-oriented mutual funds such as commissions, distribution, and revenue-sharing costs.
• Do not contain added markups or fees from investment brokers, advisors or consultants for “portfolio management” services.
• This investment structure both reduces fiduciary risk and increases the opportunity for participant investment success.

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Managed accounts built around retail mutual funds retain two flaws, both of which involve cost. First, your existing managed accounts may be built around higher cost retail mutual funds compared to SummitPlan™’s institutional portfolios. This cost differential can be substantial. Second, other managed portfolios may involve an additional management fee from an investment advisor or advisory firm. This added fee can be significant and detrimental to investment accumulation. Added fees also dilute the value-added by managed accounts. With SummitPlan™, portfolio management is built-in to the portfolios without adding extra layers of fees. The cost/fee advantages of SummitPlan™ increase opportunities for the participant’s investment success, which reduces risk to plan fiduciaries.

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SummitPlan™ combines five layers of fiduciary protection to protect you, your company and your Board:

• Fiduciary Audit® Protection Program.
• Fiduciary Assistance & Compliance Systems©.
• Institutional Investment Funds managed by pension investment professionals striving to achieve the best returns with reduced risk.
• Denali Fiduciary Management co-fiduciary status and consulting/support services.
• Optional independent fiduciary status whereby Denali professionals relieve you of all plan management responsibilities and reduce your risk exposure.
• SummitPlan™ protects your company, yourself and your Board. It is the first retirement system built by fiduciaries for fiduciaries to combine fiduciary protection for you with enhanced opportunities for participant investment and retirement success.

For additional information on any of these risk-management components, please refer to other Question & Answers sections of our web site, or contact Denali Fiduciary Management.

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