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that pesky "co-fiduciary" thing that people forget when they toss around the idea of 3(16) to "make things easier for the client"

Limit Year DB $ Limit DB $ Limit (unrounded) Key Employee Key EE (unrounded) HCE Limit HCE Limit (unrounded) 2019 $225,000 $226,992 $180,000 $184,431 125,000 $ 128,208 2020 $230,000 $230,976 $185,000 $187,668 130,000 $ 130,464

Limit Year catch up catch up unrounded Deferral Limit def limit unrounded Comp Limit Comp Limit (unrounded) DC $ Limit DC$ Limit (Unrounded) DB $ Limit DB $ Limit (unrounded) Key Employee Key EE (unrounded) HCE Limit HCE Limit (unrounded) 2019 $ 6,000 6405.50 $19,000 $19,217 $280,000 $283,740 $56,000 $56,748 $225,000 $226,992 $180,000 $184,431 125,000 $ 128,208 2020 $ 6,500 6518.00 $19,500 $19,554 $285,000 $288,720 $57,000 $57,744 $230,000 $230,976 $185,000 $187,668 130,000 $ 130,464

I regret that I may give but one "like" to this....

I did stay at a Holiday Inn Express last night.

Here you go: https://www.irs.gov/pub/irs-drop/n-19-59.pdf

Issue Number: IR-2019-179 Inside This Issue 401(k) contribution limit increases to $19,500 for 2020; catch-up limit rises to $6,500 WASHINGTON — The Internal Revenue Service today announced that employees in 401(k) plans will be able to contribute up to $19,500 next year. The IRS announced this and other changes in Notice 2019-59, posted today on IRS.gov. This guidance provides cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2020. Highlights of changes for 2020 The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $19,000 to $19,500. The catch-up contribution limit for employees aged 50 and over who participate in these plans is increased from $6,000 to $6,500. The limitation regarding SIMPLE retirement accounts for 2020 is increased to $13,500, up from $13,000 for 2019. The income ranges for determining eligibility to make deductible contributions to traditional Individual Retirement Arrangements (IRAs), to contribute to Roth IRAs and to claim the Saver’s Credit all increased for 2020. Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If during the year either the taxpayer or his or her spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. (If neither the taxpayer nor his or her spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply.) Here are the phase-out ranges for 2020: For single taxpayers covered by a workplace retirement plan, the phase-out range is $65,000 to $75,000, up from $64,000 to $74,000. For married couples filing jointly, where the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is $104,000 to $124,000, up from $103,000 to $123,000. For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $196,000 and $206,000, up from $193,000 and $203,000. For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000. The income phase-out range for taxpayers making contributions to a Roth IRA is $124,000 to $139,000 for singles and heads of household, up from $122,000 to $137,000. For married couples filing jointly, the income phase-out range is $196,000 to $206,000, up from $193,000 to $203,000. The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains $0 to $10,000. The income limit for the Saver’s Credit (also known as the Retirement Savings Contributions Credit) for low- and moderate-income workers is $65,000 for married couples filing jointly, up from $64,000; $48,750 for heads of household, up from $48,000; and $32,500 for singles and married individuals filing separately, up from $32,000. Key limit remains unchanged The limit on annual contributions to an IRA remains unchanged at $6,000. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000. Details on these and other retirement-related cost-of-living adjustments for 2020 are in Notice 2019-59, available on IRS.gov.

For a long time, that was true. Unless a governmental plan committed such egregious violations that they turned up on the front page of the newspaper, they didn't get audited. But we're involved in one at the moment, in which the IRS is alleging violations of minimum distribution requirements.

Because we are a fiduciary to the plan, we fired the client, and we notified the DOL. The plan was assigned to a DOL Investigator rather quickly.

There are a couple of threads on this issue so you may want to refer to them. There is not a certification per se to become a 3(16), but at a minimum, you should have most of your staff with industry credentials. Having CPAs, E.A.s or ERPAs will also make a difference if you want to actually file the 5500 forms. Some things to look into: 1. Education and knowledge of your staff to not only perform 3(16), but to also educate clients and to spot anything that could be an issue. 2. Fiduciary insurance coverage for your 3(16) services and thorough knowledge of what you will need to do in case of a possible breach of your 3(16) duties. 3. Very clear knowlege of what services you will and will not be performing as a 3(16). Your Administrative Services Agreement should reflect your exact services. You should also look to see if your current plan document provider will allow you to be named as Plan Administrator in the document/5500 so that the IRS will notify you if they are making an inquiry. 4. Very explicit policies and procedures for you and your staff to follow. Depending upon your service model, you may want to look into getting a SOC 1 - SSAE18 audit or a CEFEX certification.