PRELIMINARY STUDY AND DESIGN PHASE involves a series of conferences and informal discussions between company officials and consultants, during which the employer clarifies his goals, and then basic plan provisions are formulated. Steps taken in this initial phase may include, but are not necessarily limited to:
1. Collection of data concerning the company, its employees, and existing benefits programs;
2. Review of the company's history, nature of business and management objectives, personnel policies, employee turnover experience, and all factors affecting employee relations;
3. Actuarial analysis of employee data to estimate cost under various defined benefit plan formulas;
4. Testing of allocations under various formulas for profit sharing, money purchase, target benefit and 401(k) plans;
5. Design of a plan to meet specific requirements of the company including such factors as eligibility requirements, vesting schedules, benefit formulas, and early and late retirement benefits;
6. Preparation of a written report, outlining the recommended plan and summary of benefit costs;
7. Conferences with company officials and their legal and tax advisors to discuss the proposed Plan features, such as employees to be covered, types and amounts of benefits, time and methods of distributing benefits, methods of investing the funds, administrative procedures, and other basic Plan provisions.