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IRRs and TPA Approval


JOH
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A recordkeeper is asking for approval from a TPA in order to process a Internal Roth Rollover. TPA is saying that it's not warranted b/c they view it similarly as an asset-reallocation. I disagree and view believe the TPA needs to provide the approval because IRRs are governed by the Plan, has reporting requirements, and tax implications while an asset-reallocation does not. Any thoughts?

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What does the Plan Document say?  It either permits this or it does not.  It is not a judgment call or something that requires "approval."

PNJ

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

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I'd be careful with terminology.  Unless this TPA is taking on the role of a plan fiduciary in some capacity, the TPA doesn't "approve" distributions.  A TPA would "confirm" that the requested distribution or IRR is permitted by the plan and that the participant is eligible for it.  But a non-fiduciary TPA doesn't approve anything.  Might seem to be a little thing, but us TPAs are obsessed with lots of little things. 

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52 minutes ago, shERPA said:

I'd be careful with terminology.  Unless this TPA is taking on the role of a plan fiduciary in some capacity, the TPA doesn't "approve" distributions.  A TPA would "confirm" that the requested distribution or IRR is permitted by the plan and that the participant is eligible for it.  But a non-fiduciary TPA doesn't approve anything.  Might seem to be a little thing, but us TPAs are obsessed with lots of little things. 

Well said.

 

 

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