Jump to content

IRRs and TPA Approval


Recommended Posts

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?

Link to comment
Share on other sites

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, JD

Vice President and Nonprofit Practice Leader

|Future Plan, an Ascensus Company

21031 Ventura Blvd., 12th Floor

Woodland Hills, CA 91364

E patricia.jensen@futureplan.com

P 949-325-6727

Link to comment
Share on other sites

Does the TPA normally provide approval for distributions for this plan?  Bird and Patricia are both right.  The IRR needs to be permitted by the Plan, and there should be some procedure for processing, which might include the TPA if that's how other transactions are handled.

Link to comment
Share on other sites

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. 

I carry stuff uphill for others who get all the glory.

Link to comment
Share on other sites

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.

 

 

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...