Leaderboard

I'm going to offer my opinion without intentionally being degrading or disrespectful. I am not a TPA, but I work with TPAs and actuaries in the course of my business. The TPA business is highly specialized. While many are, in my experience I've found the gambit between those that are very good and those begging to be sued, and the latter don't last long. All reasonably successful firms have YEARS of experience. Though not a TPA myself, knowing what I know I would never consider just jumping into the business for whatever reasons you have. Although credentials and education help, you can quickly find yourself overwhelmed in an intricately complicated subset of tax law. You will also need a good understanding of the Employee Retirement Income Security Act (ERISA), which is a bitch of a law to understand (hence my username). It takes quite a bit of experience, hands on knowledge, and field expertise before you can reasonably be expected to be competitive. Some of my CPA referrals for retirement plan clients come from CPAs who discover they don't understand the business, and most of those referrals come only after they have talked to their friendly competitors/colleagues who refer me. Most of my referrals come from competent CPAs who KNOW what they DON'T KNOW. The best TPAs I work with have years upon years of experience, with the back-end personnel to support the business. They often have ERISA attorneys on staff or standby. The have actuaries on staff or outsource to those that can handle that business. The typical TPA firms I work with have at a MINIMUM of a dozen staff with the education and background in the business. I do partner with some with less, but those are generally recognized industry experts. As someone who recommends TPAs, I would NEVER, EVER recommend a TPA business just getting started with no experience. And when I find a client who has a "two or ten plan tony" TPA (rare) or advisor, I'll take your business away from you to one of my expert TPAs before you know what hit you. I don't mean to be discouraging, but I'm simply relating the realities of the business. If you are serious, then: (1) Learn about ASPPA and their credentials, and what it means to be a TPA; (2) Determine if that fits in your business model and if you have the bandwidth to pursue a new, complex education while servicing your existing clients; (3) Assuming (2) makes sense, get the necessary credentials from (1); (4) Spend a significant amount of time attending conferences (NAPA, ASPPA and others) and studying webinars, white paper, blogs (like this one), and other educational material provided by more sources than I can mention (do your own research); (5) HARD - Figure out how to partner with a small but experienced, reputable local TPA that will review your work; (6) Build up your expertise and consider merging with (5) or relocating, depending on what your non-compete looks like; Otherwise, you will just be a small fish with an "eat me" sign in an oceans of sharks. Hope that helps!

This question answers itself by taking a step back and a deep breath. First, if one accepts the principle that the gateway calculations are always done on an annual basis (i.e., can not be done on an accrued to date basis) then if the consistency provision means what you imply no plan could ever use accrued to date for any portion of the a4 testing regimen if it needed to satisfy gateway. I submit that such an interpretation is unreasonable. Therefore the consistency provision doesn't preclude the use of annual rates for gateway purposes and accrued to date for other purposes.

Another key advantage of a QDRO: it's the legal exception to the anti-alienation clause of IRC 401(a)(13).

Why not just buy a TPA firm?

it sounds like I am preaching to the choir here but if you really want to get a good idea of all the things that can go wrong do a search on this board on "real estate" and other such assets in plans. A little searching and you will get hits on people asking things like what do you do now that RMDs are do and the plan only has illiquid assets like real estate. How do we pay the property taxes on the real estate and the plan has no cash and the sponsor doesn't want to put a contribution in the plan. I need to pay one of the non-owners and their balance is larger then the cash in the plan and we can't sell the illiquid assets. It goes on and on over the years. Oh if that doesn't do it point out to them the IRS has proposed to start asking questions about if you owe Unrelated Business Income Tax on plan activity. Yeah they do these investments wrong and they can owe tax on the income.

Equity trust will handle weird assets (they mostly do IRAs, but also will do qualified plans) and Schwab has been known to allow SOME non-publicly traded vehicles in their brokerage window (limited partnerships, etc., but not "hard assets and actual real estate). But.... "Notoriously Bad Idea" is an understatement.... Bring up the "f" word ("fiduciary") - especially with respect to the non-docs but also with respect to each of the docs (as potential fiduciaries) and the problems their colleagues can cause the plan with weird assets....

I believe the IRA custodians that enable/allow these types of investments in IRA's also provide same for qualified plans. Very, very expensive. Most true trust companies will agree to hold all manner of investments. All of them as Trustees, most as custodians. Very, very expensive.

The only thing I feel comfortable saying is that even if you are viewed as having investment advice within the meaning of the new rule, you can't be an investment advice fiduciary unless you are deemed to be receiving a fee or other compensation, direct or indirect, in connection with the investment advice. It sure sounds like you are not (and I don't believe a reciprocal referral by an advisor you recommend is a "fee or other compensation, direct or indirect," even if it leads to a new paying client for you). Ultimately you need to get comfortable with this on your own, preferably with the advice of ERISA counsel.

Have the Teamsters acknowledged they can't keep their promise? Has the PBGC? Has Washington acknowledged they set up a flawed agency? One that may have encouraged the Teamsters to underfund the plan? Is it appropriate for Washington to pick winners and losers in this situation?