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Receipt for SPD


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6 minutes ago, thepensionmaven said:

I don't think this is the proper forum for the question, but ... do TPAs ordinarily require that a participant sign that they received a copy of an SPD?

If so, any samples available?

We don't. It's not a requirement and in 35 plus years, it has never been an issue. 

Lawrence C. Starr, FLMI, CLU, CEBS, CPC, ChFC, EA, ATA, QPFC
President
Qualified Plan Consultants, Inc.
46 Daggett Drive
West Springfield, MA 01089
413-736-2066
larrystarr@qpc-inc.com

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Are you worried about the failure to provide an SPD or plan document within 30 days of receiving a request from a plan participant or beneficiary can result in a penalty of up to $110 per day per participant or beneficiary for each violation?  I would only request acknowledgment of receipt (or keep proof that we provided the document) if the participant requested the document.  Otherwise, it is not required under the regulations.

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When I first started my TPA in 1986, we used to do it via a sign in sheet, like attendance at a meeting. Did that for a couple of years until I had a client go through an IRS audit. Found out it was complete overkill and haven't done it since.

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William C. Presson, ERPA, APA, QPA, QKA, APR
bill.presson@gmail.com
C 205.994.4070
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I know it's not required, and has never been an issue in my 35 years in practice, but in this particular case, the client has a habit of not distributing what he should and the accountant wants to be absolutely sure the participant in fact DO receive.

Question to Bill Presson - "it was complete overkill"?    I would think it more of a CYA for everyone involved, client, CPA as well as TPA.

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Let’s see whether we understand the situation.

 

An accountant, a service provider to the employer (?), is worried that the retirement plan’s administrator does not meet its responsibility to deliver communications.

 

A TPA, a non-fiduciary (?) service provider to the plan’s administrator, is perhaps less worried (or recognizes some practical limits of a TPA’s role), but is thoughtfully considering solutions.

 

If the plan’s administrator finds the administrator might not meet its responsibility:

 

Might the administrator consider engaging a § 3(16)(A) service provider to perform a specified set of plan-administration functions the named administrator prefers not to perform?

 

Might the administrator consider engaging the TPA for a contract service to deliver communications the administrator otherwise might forget to deliver?

 

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

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This reminds me of my most glorious case. A local fellow in Florida had been sent the wrong version of an SPD for a welfare benefit plan, after he had asked the HR department to send him an SPD. It said he would get a benefit if he met "X" conditions described in the SPD. So he quit, relying on the fact that he had met those conditions. His claim for benefits is denied. "But lady..." he says. -- "Sorry, bud, that's not what our SPD says", they say. "But mine says..." he protests. -- "Well, that's not the current version. You're looking at an old version" they respond. -- "But lady, then you must have sent me this old one when I asked you to send me an SPD, just before I quit in reliance on what I had read in the booklet." HR responds, "I don't think that happened, sir. You must have had an old version already that you got mixed up, and, frankly, we can't honor your claim because we would be vulnerable to fraudulent claims by people who say they are in a similar situation. You'd need to be able to prove that you were sent the old version."

He comes to see me. I meet with him, take the stamped envelope in which the SPD came, hand-addressed to him by the HR department. I tell him this will be a tough one, and I'll get back to him. I write a long letter to the plan administrator, complete with the law on detrimental reliance (which basically shoehorns these claims into an "interpretation of the plan document" theory -- which is weak, but it often worked, ironically due to an SPD case I had argued and won in the Eleventh Circuit, which I "mentioned" in my letter). I get a response that's basically what he had been told, again saying the plan formerly included the conditions he says he's relying on, but frankly they can't honor a possibly fraudulent claim and there's just not enough evidence here for the plan administrator to grant the claim. A few days later, I'm looking at the file again. The sunlight from my south-facing window catches the shiny cover of the SPD. I tilt the booklet at an angle and behold -- I see an impression of the client's name and address, essentially embossed in the shiny cover of the SPD. The person in the HR department had used a ball-point pen that had pressed through the envelope and onto the SPD cover, where there was an exact copy of the name and address that had been written on the date-stamped envelope. So the envelope matched the SPD, proving the old version had been sent to him on the date of the postmark on the envelope. I write to the plan administrator and tell them what I've discovered. They grant the claim.

I should find the 20-year-old file and confirm that I'm remembering all the facts accurately, but this is the gist of it. Or how I want to remember it, anyway ?

The client was enormously grateful, and the "extra" benefit made a huge difference in his quality of life.

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1 hour ago, Dave Baker said:

This reminds me of my most glorious case. A local fellow in Florida had been sent the wrong version of an SPD for a welfare benefit plan, after he had asked the HR department to send him an SPD. It said he would get a benefit if he met "X" conditions described in the SPD. So he quit, relying on the fact that he had met those conditions. His claim for benefits is denied. "But lady..." he says. -- "Sorry, bud, that's not what our SPD says", they say. "But mine says..." he protests. -- "Well, that's not the current version. You're looking at an old version" they respond. -- "But lady, then you must have sent me this old one when I asked you to send me an SPD, just before I quit in reliance on what I had read in the booklet." HR responds, "I don't think that happened, sir. You must have had an old version already that you got mixed up, and, frankly, we can't honor your claim because we would be vulnerable to fraudulent claims by people who say they are in a similar situation. You'd need to be able to prove that you were sent the old version."

He comes to see me. I meet with him, take the stamped envelope in which the SPD came, hand-addressed to him by the HR department. I tell him this will be a tough one, and I'll get back to him. I write a long letter to the plan administrator, complete with the law on detrimental reliance (which basically shoehorns these claims into an "interpretation of the plan document" theory -- which is weak, but it often worked, ironically due to an SPD case I had argued and won in the Eleventh Circuit, which I "mentioned" in my letter). I get a response that's basically what he had been told, again saying the plan formerly included the conditions he says he's relying on, but frankly they can't honor a possibly fraudulent claim and there's just not enough evidence here for the plan administrator to grant the claim. A few days later, I'm looking at the file again. The sunlight from my south-facing window catches the cover of the shiny cover of the SPD. I tilt the booklet at an angle and behold -- I see an imprint of the client's address, essentially embossed in the shiny cover of the SPD. The person in the HR department had used a ball-point pen, and the naturally sharp writing end of the pen had pressed through the envelope and onto the SPD cover, where there was a perfect impression of the name and address that had been written on the date-stamped envelope. So the envelope matched the SPD, proving the old version had been sent to him on the date of the postmark on the envelope. I write to the plan administrator and tell them what I've discovered. They grant the claim.

I should find the 20-year-old file and confirm that I'm remembering all the facts accurately, but this is the gist of it. Or how I want to remember it, anyway ?

The client was enormously grateful, and the "extra" benefit made a huge difference in his quality of life.

Great story

 

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I suggest that the plan sponsor use what I call a "normal form of business" procedure.  What this means is that they should  write out how and when SPD's are/ were  given to Participants and to indicate that this is the procedure for use every time with this sponsor.  I also always put a footnote on the SPD that reminds the Participant that he  received this document when he was hired and that he may request and receive another copy at any time and that s/he may receive a copy of the plan document itself upon making a written request.

Some clients like to have everyone attending an enrollment or education meeting sign that they were in attendance, but I worry that this is too subject to being faulted for omission for the  one time that they forget to do this or the papers get "lost."

PNJ

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Patricia Neal Jensen

Vice President and Nonprofit Practice Leader

| QBI, an Ascensus company

21031 Ventura Blvd., 12th Floor

Woodland Hills, CA 91364

E patricia.jensen@QBILLC.com

P 818-449-6096

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