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How many pages is the plan document?


Peter Gulia
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A co-worker of mine once sent the wrong plan document to a client.  It was a Profit Sharing only doc and the client's plan was supposed to be a 401(k) setup.  We only asked for copies of the signature pages back and no one noticed that it was page 24 instead of 43 (who would notice that?).

It didn't come to light until 3 years later when the client decided to move to a new r/k platform.  The r/k asked for a copy of the plan document and the client sent theirs.

You can imagine the confusion on all sides...

QKA, QPA, CPC, ERPA

Two wrongs don't make a right, but three rights make a left.

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BG5150, thank you for sharing that story.

 

One wonders how important the other 19 pages were if the plan’s administrator performed its tasks for three years without noticing the absence of an anticipated provision or that someone acted contrary to the written plan’s provisions.

 

 

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

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As a thank-you to those who aided my research, email me and I’ll send you a copy of my article “Should we write the summary plan description before we write the plan?” (after it’s published).

 

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

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13 minutes ago, Belgarath said:

I should have noted that participants rarely read the SPD, UNTIL they want a distribution. Then they instantly become ERISA lawyer wannabe's. A few employers do actually read them, but it is a very small percentage, as far as I can tell.

Even worse, they will read (and read into) anything they can get their hands on.  

For example, John Hancock's annual 404a-5 disclosure includes default language regarding what adjustments are made to the market value formula in their guaranteed interest accounts when there is a plan discontinuance, in-service, withdrawal, pre-retirement withdrawal, etc.

I have a plan that does not allow in-service withdrawals, and a participant was repeatedly told under what circumstances she could have a distribution.  She turns out to be one of the 0.0001 % of participants who actually read the 404a-5 disclosure and zero's in on the default language from JH regarding their guaranteed income accounts.  From this she extrapolates that since the disclosure mentions in-service and pre-retirement withdrawals, that must mean that she has a right to them and that we (the sponsor, the PA, and the TPA) are illegally keeping her from accessing money that she entitled to.  

 

 

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Sort of a twist on post hoc, ergo propter hoc. And lest anyone accuse me of attempting to be snobbish or pretentious, I hereby fully disclose that I only know this phrase 'cause I saw it in an episode of "The West Wing!" The last Latin I had was in 7th grade, and I don't remember much of it...

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