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ASPPA Recordkeeper Certification: Your Seal of Excellence Western Benefits Conference July, 2008 Seattle, Washington PowerPoint Presentation
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ASPPA Recordkeeper Certification: Your Seal of Excellence Western Benefits Conference July, 2008 Seattle, Washington. How Did Certification Emerge?. ASPPA…the industry’s most trusted source for: Professional credentials Legislative tracking Regulatory representation

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Presentation Transcript
slide1

ASPPA Recordkeeper Certification:

Your Seal of Excellence

Western Benefits Conference

July, 2008Seattle, Washington

slide2

How Did Certification Emerge?

  • ASPPA…the industry’s most trusted source for:
    • Professional credentials
    • Legislative tracking
    • Regulatory representation
    • Leadership for independent recordkeepers
  • ASPPA…commissioned an industry task force
    • Launched – April 2007
    • Initial certifications – September 2007
slide3

The Goals of Certification

Ronald E. Hagan

CEO and Chairman

Roland|Criss

slide4

The New Regulation that will Shakeup the Recordkeeping Business:DOL 408(b)(2)

  • The business implications of Regulation 408(b)(2)
  • How the ASPPA certification can get your firm ready
  • Proving readiness to a nervous market
slide5

The ASPPA Task Force

Its Makeup:

  • Members:
    • Senior operations executives from the recordkeeping industry
    • Senior staff from ASPPA
  • Advisors to the Task Force
    • CEFEX – Certification programs
    • Fi360 – Standards development
    • Roland|Criss – Audit methodology
slide6

The ASPPA Task Force

Its Mission:

  • Develop uniform best practices
  • Create a “Standard” for self-regulation…
    • Design it to support Investment Stewards
    • Tailor it to fit each of the industry’sthree business model categories
slide7

Three Business Models

ASPPA’s Service Class I

Bookkeeping for trading is bundled along with proprietary products and services.

  • Investment products
  • Asset custody
  • Transfer agency
  • Trust
  • Administration
  • Participant enrollment
  • Investment advice for participants
slide8

Three Business Models

ASPPA’s Service Class II

Bookkeeping for trading transactions is nearly the sole focus, but alliances with investment firms, third-party administrators, asset custody, and trust providers round out a full offering of services.

slide9

Three Business Models

ASPPA’s Service Class III

This is an Administration only business model.

(No bookkeeping for trading transactions, investment products, asset custody, or trust services.)

slide10

The ASPPA Task Force

Its Mission:

  • Develop uniform best practices
  • Create a “Standard” for self-regulation…
    • Design it to support Investment Stewards
    • Tailor it to fit each business model type
  • Ensure independence and confidentiality…
    • The audit
    • Registration committee’s evaluation
slide11

What do fiduciary organizations need?

Develop and maintain processes and controls

Document the execution of processes

Continuously evaluate the effect of processes

Overview of the ASPPA Standard

The Four Building Blocks

slide12

The Standard:A “Quality Management System”

  • ISO-like for self-regulation
  • 17 practices emerged from the building blocks
  • Developed from industry best practices and the needs of fiduciary organizations
  • Ensures fiduciary support competency
  • Covers operations, information technology, organizational behavior, and fiduciary processes
  • Makes use of SAS-70 audits when available
slide13

Committee reviewsCAP report, OFIs, NCRs

  • Decides pass or fail
  • If pass - issues certificate

3

  • Pre-assessment
  • Onsite assessment
  • Prepare Consultant’s Assessment of Practices (CAP) report
  • Annual renewal

2

  • Signs RAA form
  • Completes Assessment Questionnaire

1

3 Steps to Certification

slide14

The Assessment Process

1.OFF-SITE DATA COLLECTION

CEFEX analyst gathers and formats information

2.ON-SITE ASSESSMENT

Verify data and interview key personnel

  • 3.THE “CAP REPORT”
    • Findings
    • Opportunities for Improvement
    • Non Conformities
    • Recommendation

ISO 19011

4.INDEPENDENT REVIEW

CEFEX Registration Committee makes certification decision

5.CERTIFICATE ISSUED

Certificate issued to client…public viewing at www.cefex.org

slide15

Benefits of Certification

1. Pre-empts Federal Licensing for Recordkeepers

Self-regulation uses a defined industry standard

2. Public Confirmation

Instills trust throughout the industry

3. Commitment to Stakeholders

Ongoing rigorous audits ensure adherence to standards and continuous improvement

slide16

Benefits of Certification

4. Market Recognition

The mark conveysan identity of excellence

5. Effective Risk Management

Reduces the potential of future liability claims

6. Competitiveness

Meets plan sponsors’ demand for certified providers

slide17

The Demand for Proof of Excellence

  • Plan sponsors require ASPPA certified recordkeepers
  • “Fiduciary Identity” isre-shaping business models
  • Recordkeepers under regulatory pressure to be certified
  • DOL Regulation 408(b)(2)
slide18

Best Practices:The Pursuit of Excellence

Chris Stroud, MSPA, MAAA, EA

President

slide20

The Importance of Best Practices

“This is the first time in the history of business that you can be great at what you’re doing today and be out of business tomorrow.”

- Ken Blanchard

& Terry Waghorn

slide26

ASPPA RK Certification vs SAS70

ASPPA SAS70

_______________________________________ ______

Qualifies industry self-regulated status YES NO_

Defined standard based on regulatoryYES NO

pressure points______________________________

Audit methodology equally applied to all YES NO

business models_____________________________

Audit focuses on overall organizational YES NO

___processes__________________________________

Audit considers other assessments/audits YES NO_

Central committee decides pass/fail on a YES NO

uniform approach_____________________________

Evaluates company’s capability to support YES NO

a fiduciary organization’s legal duty_________________

slide27

The Rate of Change

“We double the change rate every decade…

we’ll make twenty years of progress by 2014 and

do the same again in only seven years.

We will witness 1,000 times the rate of progress in the 21st century as compared to the 20th century.”

- Ray Kurzweil, author, futurist

slide28

The Growth of Information Technologies

“The exponential growth of information technologies

is even greater:

We’re doubling their power about every year…

As an example, it took us 14 years to sequence HIV; we recently sequenced SARS in only 31 days.”

- Ray Kurzweil, www.singularity.com

slide30

What Remains Constant?

The Human Connection

slide33

Lack of long-term vision

  • Failure to communicate direction/plan
  • and establish clear goals and objectives
  • Inattentive to customer needs
  • Underestimate the competition
  • Inadequate financial planning
  • Inability to change!

Why Businesses Fail…

slide34

Strategic Business Planning

"In most companies, people at the top know where they are going – but the employees struggling to get the work done are often in the dark about the company direction. If you don't tell them where you want to go, you probably won't get there. A written business plan allows you to do that."

- Ken Ingham, MSPA, MAAA, EA, AIFA ®

Ingham Retirement Group

slide36

A Written Business Plan:

A Living, Breathing Document

slide39

Action Plan…

www.asppa.org

www.cefex.org

www.rolandcriss.com

www.scs-consultants.com

slide40

Questions and Answers

Ron Hagan Chris Stroud

Roland|Criss

slide41

ASPPA Recordkeeper Certification:

Your Seal of Excellence

Western Benefits Conference

July, 2008Seattle, Washington