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If it is a recordkeeper change, and not a TPA change, I would expect there to be a conversion fee, especially if there is a trust company involved. There is a lot of work in the deconversion process and hard costs charged by the trust company for the final wire, etc. The trust companies that we work will charge us a fee to close the plan on their end and that charge is done 2-3 months after the final wire. There could be trailing dividends to work with and subsequent wires and reports due too. Don't forget to mention that the recordkeeper is who the participants know and they will be fielding participant calls once the plan goes into blackout and usually for several months afterwards. There are also things like final quarterly reports and dealing with auditors that need to be handled by the recordkeeper after the assets have gone.

No, unless it has a 401(k) Provision. Good Luck!

Either I am not understanding the question or I think it is moot. You seem to be saying that the plan is terminating in 2017 and the last day of the plan year was a day in 2017 when all the assets were paid from the plan. So are you saying as of some day in 2017 everyone's balance was zero because all of the assets were paid out of the plan in 2017 correct? To me then there are no RMDs due for 2018 from the plan as everyone's balance in the plan is zero. If they rolled their 2017 payment to an IRA in 2017 then there would be an RMD payment from the IRA using the 12/31/2017 balance in 2018. The payments made in 2017 from the plan ought to have had any needed RMDs for 2017 done as you were paying the plan assets from the plan based on the 12/31/2016 balance. Am I not understanding the question or does that seem to answer your question?

If the plan document requires a deposit within a certain time, a late contribution might be an operational failure of the definitely determinable benefit rule, though I am not sure about that. I don't believe every plan violation automatically disqualifies the plan. It has to be a violation of a provision that is required by the qualified plan rules. For example, assume a plan document names a committee as the administrator. If the plan document says once a year every member of the committee must sing happy birthday to the committee chair, the plan is not disqualified if they forget to sing happy birthday. Similarly, if the plan says the committee must meet four times a year, and they only meet twice, I don't see that as disqualifying the plan.

Generally not an operational or other 401(a) failure absent plan language requiring contribution by certain date. These DOL corrections happen all the time. Usually within 2-year self-correction period, or "insignificant," anyway.

I don't understand. The grant date is 3 months after the expiration date. Do you mean the grant date was 12/31/2007? Also, is the FMV higher or lower now than grant date value?

Thanks Tom. And after we had already sent the letter to all our clients updating the 2018 limits. Sigh...

"About your middle paragraph: If an employer/administrator does not allocate a function to a "3(16)", doesn't the employer/administrator retain fiduciary responsibility for its prudent performance of the function?" Yes, the existing fiduciaries would retain liability for the proper performance of the non-delegated task - but I would add two things: First, if the "process" is well defined, errors made in completing the process are not problematic from a fiduciary perspective. The standard is not perfection, but rather what one familiar with the task at hand (and "expert") would do under similar circumstances. Errors happen, and are fixable absent there being a "fiduciary breach." The key is to ensure the process undertaken by the non-fiduciary service provider is appropriate and in my experience, those that do it regularly - like a recordkeeper - have decent processes, and those that don't aren't in business long. Think of it this way - my employer services 5200 plans, and we provide DRO services. We do about 50-70 a month and know what we are doing. Most of our clients (plan sponsors) see one DRO every few years - if ever. I wold suggest that our "ministerial" process is better than that which our typical client would do. Second, I'm still not sold that these tasks are "fiduciary" functions. ERISA's definition requires discretion, or "management" (implied discretion) of plan's administration. Tightly drawn processes eliminate that discretion in 98% of the situations, and the remaining 2% might go back to the plan sponsor for a decision. Even so, if you "split" the ministerial part of the task from fiduciary part (discretion), and rigorously apply the process, you've complied with ERISA's "prudent expert" standard - EVEN IF an occasional error occurs. "About your third paragraph: Let's imagine a hypothetical situation in which the procedures and methods for doing the specified functions are exactly the same whether the functions are done as a fiduciary or as a non-fiduciary. Might it be worthwhile to the plan to spend a little extra to buy the economic value of the 3(16) provider's extra responsibility (and so its potential contribution to making good the plan's losses that result from the 3(16)'s direct breach, or from the employer/administrator's breach that the 3(16) failed to prevent or remedy)?" No. You are imposing a fiduciary function on another - over which you have very little control, and have a heightened duty to monitor under "co-fiduciary" standards. I think you haven't "offloaded" a piece of the fiduciary liability pie - as these purveyors of 3(16) services sell you - you've enlarged the entire pie. In addition, if you've got a good process, and rigorously apply it, I think you've complied with the prudent expert standard, as mentioned above. With respect to your last paragraph (reproduced above), I think it's all marketing - based on fear. The problem is, no one asks the right question: "Do you trust someone else who is selling you a service for profit to do the right thing more than you trust yourself?" It's not bad to be a fiduciary - it's just bad to be a bad fiduciary. I spent a lot of my career educating fiduciaries to be good fiduciaries....

Selecting any service provider- a fiduciary one or a non-fiduciary one is a fiduciary decision, and one that requires monitoring to ensure the selection is still a prudent one. The difference with selecting a "fiduciary" service provider is that it springs on the selecting fiduciary "co-fiduciary" liability - which in my mind requires a much higher level of monitoring scrutiny. A non-fiduciary who makes a mistake may be fired - but a co-fiduciary that makes a mistake causes the other fiduciaries to have responsibility to correct the error - as if they made the mistake themselves (admittedly, an over-simplification). As such, my position is, and has been, do not elevate functions that can be performed "ministerially" to the level of a fiduciary function, as that creates not only the liability for the prudent selection, but the co-fiduciary liability for on-going performance of those functions. Despite having heard the "pitch" from a number 3(16) service providers, I have yet to have any one of them answer the question of "what's different between your process and the process the recordkeeper engages in to perform that same function?" - except to have them proclaim "proudly" that they do it as a fiduciary.... Tautological reasoning doesn't go far with me....

This 100%.

i can't tell you how many - but I know there are a number (half dozen or so I'm aware of) "independents" that offer some 3(16) services, and a few bundled providers that also provide the service (and the bundled provider I work for is in the "exploratory" phases of offering a suite of 3(16) services). The problem is, as you note, defining exactly what one means by 3(16) services. We currently offer termination, in-service, and hardship distribution outsourcing services, but do so as a non-fiduciary. We also do DRO qualification services - also as a non-fiduciary. These are service 3(16) service providers tout as being in their bailiwick - and that they can "do it better" as a fiduciary.. The question become, what "additional" value would be offered by doing these as "fiduciary" services. The "marketing" spin is that by being a "fiduciary" you reduce the fiduciary liability of the plan sponsor/administrator - although it can be argued that liability goes up due to the "prudent selection" and "monitoring" requirements that now attach to the more traditional plan fiduciaries. Key is "know what you are buying" and have prudent processes in place for making the decision and monitoring....