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My standard advice for the client that wants to engage in malarkey that might or might not be legal but is almost certain to result in operational failures is - the potential cost of cleaning this foolishness up later vastly exceeds the imagined benefit of doing it in the first place. My cite is "every plan, ever."

A trust (or probably more commonly a "plan and trust") is a separate entity and should have a separate ID number for reporting purposes.* If you're looking for a specific cite, I don't think you're going to find one - it's like asking if an individual who owns an unincorporated business and an incorporated business needs separate ID numbers; there's no need for the IRS to publish guidance that specific. *If there is not going to be any reporting by the trust, then we don't bother - e.g. a plan on a recordkeeping platform will typically have distribution reporting done by the recordkeeper. If the investment firms are handling distribution reporting, then maybe what they suggest is ok (but I doubt that's the case). I do seem to recall that a plan may use the sponsor EIN for tax reporting...I don't have a cite. But running the risk of getting payroll withholding and distribution withholding mixed up, and (I believe) subjecting the plan to the timing requirements based on dollars withheld for payroll is simply stupid. I learned long ago not to use advice from TD Ameritrade and Schwab and their ilk, and in fact to proactively anticipate bad advice and head it off at the pass.

My firm works with and receives referrals from a few Edward Jones Advisors. The information you are being told by the Edward Jones advisors is not a legal issue, but an internal decision made by the Edward Jones as an institution. Our office has been informed that Edward Jones has made a number of internal decisions regarding 401(k) Plans and Edward Jones Advisors. We have been told that Edward Jones advisors can no longer work with clients that have self directed brokerage accounts and that all 401(k) plans must now use an institutional platform. It seems that Edward Jones has decided that the American Funds Recordkeeper Direct and John Hancock are their preferred platforms. For the last few months we have converted a few self directed brokerage account plans to both platforms. And of course Edward Jones advisors have lost a few plan whereby the client decided they liked self directed accounts and found another advisory firm to work with.

Would it be considered a federal crime to call the IRS and impersonate a plan official to tell the IRS that they are mistakenly threatening the sponsor with adverse consequences because no 5500 was filed for a year in which the plan did not exist ? If so, then either the plan sponsor has to actually contact the IRS themselves or provide the TPA a PoA to authorize them to do it for them. If not, since no confidential information would be communicated in either direction, why not do that? Just saying.

To the poster, the link that you cited above says a TIN should be obtained in order to properly report certain things. If a plan needs to report those things, and wants to do it properly, then it should obtain a TIN per the IRS. Why is complicated and in need of further "authority"?

I think this is the more significant issue. How long have these trust assets have been unallocated? As for giving an additional contribution to select NHCEs, a new comp allocation with everyone in their own group makes that easy. But, if one requirement is that HR spends no time on this, who is going to keep track of who qualifies for the extra $?

If the plain language of the document says you credit service, then you credit service. If the document was drafted to say yeas of service at "D" prior to 1997 are credited, you would credit service for all years before 1997. If the document says employees of "G" hired in 1997 shall receive service credit for time at "D" prior to 1997 then that's how you apply it. At least that's my understanding but I am not a lawyer.

2007 Q&A 17 Minimum Distribution Rules: Required Actuarial Increases Question #34 from the 2000 Gray Book provided an example of a late retirement increase, essentially comparing the accrued benefit based on all service and the actuarially increased accrued benefits from each earlier April 1 in a plan with an April 1 anniversary date. The subsequently released Question 8 from regulation §1.401(a)(9)-6 says the benefit payable must be the actuarial equivalent of the benefit from the April 1 following the calendar year in which the employee attains age 70 ½ *plus* the actuarial equivalent of any additional benefits accrued after that date…” [emphasis added]. Does this mean the regulation requires an additional calculation beyond what was illustrated in the prior Gray Book (i.e., a calculation including actuarial increases on top of additional service accruals)? *RESPONSE * No. The phrase “any additional benefits accrued after that date” are those required under the rules of IRC §411(b)(1)(H), which provide that an accrual for additional service during a year may be offset by an actuarial increase for delayed retirement. The year-by-year calculation in the 2000 Gray Book produces this result.

Remember the trustees need to follow the Prudent Man rule under ERISA. They must ask in a prudent manner and expert (I think there is a presumption of being an expert) would in these situations. I also believe that even if they hire people fiduciary responsibilities can't be outsourced. They should at least regularly monitor the consultant's job to make sure they are in compliance with the contract's terms. But because of the Prudent Man rule I think this will always be a facts and circumstances standard and there won't be a hard and fast rule on how often to meet.

The consultant's contract should include responsibility for ongoing monitoring of the investment option menu and notice to the trustees of any development that would be reason for special attention to the option before the next regular meeting. Examples include a material change in the manager of the fund and any fundamentals of the fund.

ESOP Guy, for those participants who get neither the credit nor the value of starting retirement savings, is there an argument that increasing participation will, over time, increase the plan's asset size, which could get the plan more purchasing power, enabling it to buy superior investments or less-expensive services? That strikes me as a too hypothetical of a benefit.

Why not just amend the plan to allow immediate entry? Maybe one year for the match. The first year the people are hired, they aren't HCEs anyway.

The Plan document should specify the sources used for a distribution. The default ordering in our PPA VS document is pro-rata from all sources. If the participant has both pre-tax and Roth deferrals, they can elect what portion of the distribution from the salary deferral source is from Roth and what portion is from pre-tax. The adoption agreement has selections that let you modify how the Roth portion is handled. The base document also allows a separate written distribution procedure to specify a different ordering.

Well, FWIW. I'll see if it actually attaches... ... ... ... ... ... ... ... ... ... ... ... ... ... ... Hmmm..... .... ... .... ... ... ... ... Yeah. I'm not sure it will ever complete the upload. I'll try to send it to you directly.