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Sarbanes-Oxley (the Enron law) provides the limits/requirements concerning other/non-audit services that a company's auditors can perform. Issues arise when the firm is auditing numbers that go on financial statements that it generated, resulting in auditing their own work. Standards may be different for public and private companies, and plan audits versus corporate audits, but this is a professionalism/ethics issue to be explored by the auditors within the respective firm, not the TPAs.

Are you saying that you know of some states where this is already the case? That is surprising; there shouldn't be a connection except for those plans that actually replace income with a monthly check (called a defined benefit plan with participant in pay status!).

Credit for the comic goes to Ryan North of Dinosaur Comics. Hope I can bring a little levity to everyone's Friday

Wow, C.B. Zeller, pure greatness!

It is perfectly permissible for an employer to say that your compensation package includes your benefits. Let's say your "total package" is $200,000. So, if your health insurance is $20,000 a year paid by the employer, the employer is going to set your W-2 compensation at a number that is reduced by that expense. Likewise, other items might be included in the gross calculation but not in your "paycheck", like company car, continuing legal education, country club dues, etc etc etc. We have lots of legal and medical practices where the total compensation package approach is used (I teach my clients to use it!) for their more high paid individuals. And if one of those docs or lawyers is getting a company contribution into their 401(k) of $35,000 to maximize their 415 limit, that is $35,000 that is NOT paid to them in their W-2. If they are not in the plan, then that $35k is in their paycheck. Your 3% might be being treated in exactly that way, and there's nothing wrong with that so long as you don't have an employment contract that says otherwise (our clients' have employment contracts that explains that their total compensation package provided to them INCLUDES these specific items). It appears they are doing a salary REDUCTION (not a salary deduction) and that's the way it would be handled. If that is what they are doing, it is NOT a violation of any of the safe harbor provisions. You are getting 3% of your (let's say) W-2 compensation allocated to the plan. It's just that your W-2 is lower than it otherwise would be, and yes, you are effectively funding your own 3% contribution. We did the same thing many years ago (and still do with the 3% safe harbor) with regard to rank in file employees. When the plan is established and we have to give employees 3%, we may tell employees that BECAUSE we are installing a plan where they will get 3% contributed, THIS YEAR we are forgoing our regular 3% raises to pay for the plan contribution, but only this year. Next year we will be back to regular raises. If you are clever enough to see the math here, you will recognize that the one year lack of salary increases actually pays for the 3% annual contribution FOREVER, not just the first year. As I wrote and said when top heavy came in: "Congress says you have to give the employees 3%; it doesn't say YOU have to pay for it!"

Coronavirus-related distributions are exempt from the requirement to allow direct rollover. Most of the provider forms I have seen so far don't even have a spot to enter rollover info. What is the participant trying to accomplish in this case? Rollovers are already exempt from the excise tax under 72(t), and not includable in income, so why bother with the qualified individual certification?

MoJo, safe to say you misunderstand our discussion. A pooled plan is where the participants have no control over the investments; trustees make the decisions for all the money and all participants have the same rate of return. The whole plan is pooled, not just one pooled account in a participant directed account. And of course, you CANNOT "definitely determine" the benefits of each and every participant from the moment it is contributed to the plan, because the allocation to participant accounts takes place at year end. And, the allocation almost always includes funds not yet contributed, because a pooled, trustee directed plan is almost always reported on an accrued basis, so contributions that are made after the plan year FOR the plan year are shown in the year end balances (even though the money might not even be in the plan yet). The plan as an "accrued contribution" on the books. Hope that helps.