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Completely agree with Pam Shoup's comment. The TPA got what they contracted for during the period of the contract. The accumulated amount is a plan asset. Negotiation of a new agreement with higher fees going forward may be OK, but the decision to raise fees will need to have justification (e.g., bigger plan = more work) independent of the fact that the plan has grown bigger and can now generate more revenue sharing.

Is there any reason why any left over money in the ERISA bucket account is not allocated to the plan participants as earnings at the end of the year?

Is there/should there be a concern that if the totality of the compensation is unreasonable then the TPA is engaged in a PT?

I would likewise refer to IRS Notice 98-1, §5, but the prior year ACP you should use is 0%, not 3%. IRS Notice 98-1 allows you to use 3% as the deemed prior year NHCE ACP average in the first plan year. The notice further specifies that "For purposes of the ACP test, the 'first plan year' of any plan is the first year in which a plan...is or includes a §401(m) plan, i.e. the first year a plan provides for...matching contributions described in §1.401(m)." From what you've said, this is not the first year that the plan has provided for matching contributions, even though it's the first year that matching contributions are being given. Using prior year results, the NHCE ACP should be 0%.

How can the plan sponsor be okay with this? Having the participants pay excess TPA fees beyond what is necessary and prudent is a problem. I would work with the investment advisor and the sponsor to eliminate (or at least reduce) the revenue sharing by changing the investment share classes to avoid the excess. The TPA can then attach an asset charge or a flat fee paid by participants. Having the participants pay excess fees (even if the sponsor is okay with it) via revenue sharing would not be the prudent route.

Thanks for info Larry. Very informative.?

Should be fine as long as you follow the voluntary plan termination and liquidation rules (1 year/2 year/3 year) for all elective account balance plans and leave the non-elective account balance plans alone.

I would be worried about the contingent benefit rule of 401(k)(4)(A). The CODA is not qualified "if any other benefit is conditioned (directly or indirectly) on the employee electing" to defer. The investment direction is so closely tied to the deferral election that I would not feel comfortable allowing this.

I am interested in any ideas re this topic as well. If I create a multiple employer 457(b) (all sponsoring entities are NFP's), are all assets at risk if one of the sponsoring employers declares bankruptcy? Could I address that in a Rabbi Trust (I understand that the Rabbi Trust does not protect the assets from sponsor bankruptcy; my issue is whether or not the bankruptcy of one of the sponsors puts all assets at risk?) Thanks! PNJ

1. Annual Notice Form is usually included in your document package. Ask your vendor. If you can't find one, let me know and I will help. 2. and 3. Our firm sends these out in the fall on calendar year plans along with all the other required notices. 4. For ease of administration, we recommend a mass distribution to all employees. Also, posting, etc. 5. Although it would be lovely to have executed acknowledgement of receipt of such notices, we usually use a "business standard" distribution. In other words, the notice is published on a specific date and emailed to all Participants (assuming they all have email addresses) and then note of this activity and the date it took place is made and retained. FINAL Comment: Don't forget all 403(b) plans have to be restated for PPA by March 31, 2020. PNJ UNIVERSAL AVAILABILITY NOTICE Charity X. 403(b) Plan This notice provides important information about your rights to defer compensation I Charity X. 403(b) Plan (the "Plan"). The Plan Administrator is: Charity X Address: 2021 Ventura Blvd Phone number: 818-297-7685 Am I eligible to make elective deferrals? You are eligible to make elective deferrals if you are employed b yCharity X. or any affiliate who has adopted the Plan. You can start making elective deferrals immediately upon your hire date. What are elective deferrals? Elective deferrals are contributions you may make out of your compensation to the Plan. You may contribute to the Plan on a pre-tax or after-tax basis. Pre-Tax contributions are made to the Plan out of your compensation before taxes. Your contributions are only taxed as compensation once you receive a distribution from the Plan. After-tax elective deferrals are known as Roth contributions. Roth contribution are made by you on an after-tax basis, but if certain requirements are met, a "qualified distribution" from your Roth contributions will not be taxed when you take them out of the Plan (see the Summary Plan Description for more information). There are no income limitations on who may make a Roth Contribution. Roth Contributions are made in the same manner as pre-tax elective deferrals. You must designate how much you would like to contribute on a pre-tax basis (normal 403(b) contribution) and how much you would like to contribute as an after-tax Roth Contribution. You are not required to make any Roth Contributions. You may designate all of your elective deferrals as pre-tax contributions. The sum of your Roth contributions and pre-tax elective deferrals may not exceed the annual limit on regular 403(b) contributions. Please note that Roth Contributions are not suitable for everyone. Please consult with your tax advisor before making any Roth Contributions to the Plan. What are the limits on elective deferrals? Federal law limits the amount you may elect to defer under this Plan and any other retirement plan permitting elective deferrals (including both other 403(b) and 401(k) plans). You are limited to contributing $19,000 (for 2019) during any calendar year. Your Plan may further limit the amount of your elective deferral. Please see your Summary Plan Description for further information. If you are age 50 or over, you may defer an additional amount, called a "catch-up contribution", of up to $6,000 (for 2019). The total amount that may be contributed to the Plan on your behalf in any year may not exceed the lesser of 100% of your compensation or $56,000 (for 2019). How do I make or change my deferral election? You may make or change your deferral election by returning a deferral election form to the plan administrator. Once I make a deferral election, how often can I change, stop, or re-start the election? You may change or re-start your deferral election once each pay period. You may stop your deferrals at any time. The plan administrator may establish additional rules you will need to follow when making your deferral election. Your deferral election is only effective for compensation you have not received yet. The plan administrator may also reduce or totally suspend your election if they determine that your election may cause the Plan to fail to satisfy any of the requirements of the Internal Revenue Code. Can I direct how my elective deferrals will be invested? Yes, you can direct how your elective deferrals will be invested from among the different investments offered under the Plan. You may make or change your investment elections by returning an investment election form to the plan administrator. Subject to any additional restrictions placed on investment timing by the actual investment, you may change your investment elections daily. If you do not make an investment election your account balances will be placed in investments selected by the plan administrator.