Leaderboard

Are you asking if employer contributions can be considered catch up? The answer is no. Only deferrals can be used as catch up.

Thank you all for the advice and suggestions. I am investigating the interpretation of how to handle gains and losses to the terminated participants' accounts, following RatherBeGolfing's suggestion. Once I get a response, I will be able to see what to do next. This is a fine place to work and I am not going anywhere. One incident is not representative of the normal flow of everyday business and there will be a way to resolve this. You can't blame the powers that be for not listening at first. They were relying on a combination of a departed partner's interpretation who had been widely respected as the absolute go to expert on everything, and the document provider's advice. Weigh that against the opinion/misgivings/gut reactions of a new employee, no matter how smart or experienced that employee might be. I am not an ERISA attorney, just an administrator who has been around the block more than a few times. However, with the citations you have all given, I have more arguing power now, and I will find a solution to this.

Wait til the kid finds out he's due 25 years back earnings! ?

Update: The deceased DID have a son. I found him by sending out a letter to an elderly relative I found on Truthfinder.com. She turned out to live next door to the kid, and he called in with all of his information. We do at least have someone to pay! And yes, I did ask him for a birth certificate so I can prove to myself that he really is the son.

(Leaving to others questions about what makes business sense.) Santo Gold, the facts in your query don’t say whether the employer or the plan pays the fees. If the plan pays, you’d want the disclosures to be enough to meet your and the advisor’s conditions under 29 C.F.R. § 2550.408b-2, including its rules about indirect payments. If the advisor is a registered investment adviser, it must disclose (in at least its Form ADV Part 2 brochure and investment-advisory agreement) anything about a person other than the advisee paying the fee, and any indirect collection of the fee. Even if that’s the other guy’s issue, you might prefer to satisfy yourself that the adviser’s disclosures are sound to help you avoid involvement with a fiduciary’s (the plan administrator’s or the adviser’s, if it is a fiduciary) breach. Also, you might want to design the pay-over arrangement so both portions of an amount paid to you have become no longer plan assets before anything is paid to you. Remember, even non-discretionary control of plan assets can make one a fiduciary.

Wow, just wow. What Mike said. I would not want to have to justify that interpretation to anyone.

Not something I would do. As long as it's disclosed it should be legal from your end. Not sure this would be the case for the advisor, they are much more tightly regulated than TPAs. Is this advisor a registered rep? Or an RIA? Has he looked into this? How would other financial advisors perceive this? Would they want the same, or worse, would they figure you and this advisor are working together such that they would not want to refer business to you? Why should you bill it for him? Why not the other way around? You risk getting "spreadsheeted" and replaced. Clients tend to evaluate fees by running a Quickbooks payee report based on what they paid the TPA in the prior 12 months, without regard to what was paid (a restatement? other amendment? Maybe two years admins based on timing of when the work was done each year)? They don't look at 408(b)(2) disclosures when they have their P&L to tell them. They will see they paid you a lot more than the new guy trying to get their plan admin. My $0.02.

Does the plan really state this, or did the plan administrator make it up? If this administrative policy, is there a good reason for it? Seems onerous, even unwise. It may have been "clearly communicated", but that is in doubt since