Leaderboard

Way back in the day, I shared office space with a wonderful CPA. One day he asked me what my collection rate was. I told him I collected 100% of what I billed. He said "then your rates aren't high enough." I increased my rates 100% and only lost one client. He also told me to never fire a client, but raise your rates to where they leave. He said having someone say "they are too expensive" isn't really a negative. Now, I haven't kept that faithfully and we do let clients go on occasion. But the lesson stuck and I don't think I (or any firm I've owned or worked with) have ever been much below market except for the rare exception.

Differing benefits, rights, and features are also subject to nondiscrimination testing. See 1.401(a)(4)-4. You have “current availability” that you can test, and “effective availability” that you can smell.

Absolutely. A lot of practitioners (not just TPAs) get stuck in mindset where they don't want to lose clients or do not want to replace clients with high annual invoices. I have seen people struggle to keep a client that represents 10% of revenue but 30%+ of work. Most TPAs don't track time or billable hours like CPAs and attorneys do, and it is no doubt a PITA! What diligent time tracking does do is show how valuable a client is, or if they are a vampire. For example, lets assume your hourly rate is $300. You don't bill your clients $300/hour, but $300 per hour is what you are worth to you firm. The $300 "rate" covers your salary and benefits, overhead, and estimated profit over the year. If you work 20 hours on a client and bill $3,000, you are only realizing 50% of your calculated rate. If this rate is calculated to allow you to continue your practice, this client is a vampire, especially if your combined realization rate is less than 100%. This is something I see TPAs struggle with all the time.

R. Scott, here are some things to consider when addressing this challenging topic: First there is a fundamental reality that you have a business to run and you need to align your revenue stream with your expenses no matter what anyone else is doing. To the extent that your fees are paid from a plan, you must disclose the fees to a Responsible Plan Fiduciary in accordance with DOL's 408(b)(2). It is a good time to review the rules to make sure you consider what must be disclosed, and here are some resources: https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/fact-sheets/final-regulation-service-provider-disclosures-under-408b2.pdf https://www.davis-harman.com/pub.aspx?ID=VFdwak5BPT0= When you discuss fees with a client, you will raise their consciousness that you are a service provider and they pay you fees. Much like you have not addressed fees for almost 10 years, the client may not have evaluated the fees they are paying you over that same time period. Essentially, if a plan pays your fees and a client has not periodically re-evaluated your fees, they have not performed their fiduciary responsibility to monitor fees. You can expect varied reactions. A longstanding client that values their relationship with you as a trusted resource likely will not blink at the increase. A client that see you as a vendor providing perfunctory services will likely shop around. A client that has had a recent less than pleasant experience with you likely will use the fee as an excuse to terminate the relationship. A client may be experiencing its own need to reassess their revenue stream versus their expenses and you will be shining a light on the expense of your services. Hopefully, the client perceives that the value of your services match or exceed your fees. As part of this process, you also should address any clients that are vampires. They consume extraordinary amounts of your time and do not pay you for that time. You should be ready to have a frank discussion about services you have performed that were outside the scope of your existing agreement. Be prepared to walk away from any such bloodsuckers. A few others commenters have suggested what I consider best practices for keeping fee agreements up to date year over year. You should adopt a best practice and include it in your discussions and updated fee agreements. Good luck!

Right. That's the only reason to do the certification. And it's very significant. Sure this is complicated and has some delicate (or indelicate) aspects, but think of the alternative? Someone with, say, a $200,000 balance facing a long illness that will likely end in death, and in financial straits (e.g., no LTD) gets their account (which they won't need for retirement) without the $20,000 penalty that would otherwise apply. Seems like a worthwhile provision to me. If it was set up for the employee to administer (i.e., by checking a box on return) (a) there would be a higher rate of false claims, (b) they would have to wait for a refund from IRS, and (c) there would be a lot more work for IRS. Regarding repayment within 3 years, in my experience IRA custodians will let the account holder self-certify that the money qualifies, e.g. as a Covid distribution rollover. The taxpayer of course must claim the refund available in connection with the rollover on their 1040.

"The DRO was drafted ... and was submitted to the PA. ... It was approved and sent to both parties and his ex's attorney along with the procedures." "she ...send it to the Judge exactly how it had been (originally) approved. The Judge's signature was stamped on it and it was filed" So, the original DRO you mentioned in your 3rd sentence was ultimately submitted to the judge for approval, ignoring the changes the participant wanted, and the court approved it. However, the court approved QDRO has never been sent back to the PA because the AP won't sign it. Is that correct? "We just don't know why her and her attorney hold all the power over his pension and if there are any clauses in ERISA or any other laws that might disqualify her from getting her share because of her not doing what she was supposed to do." Others may chime in with more legalistic responses, but as I have said before, the answer s/b in the QDRO procedures. The PA is not required wait indefinitely for the final QDRO to appear and they have no right to hold back the participant's portion. In other words, her failure to sign should not be impacting his ability to receive his portion of the benefit. You may find this DOL material helpful https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/publications/qdros.pdf especially Section 2 which discusses the PA's responsibilities. Section 2-11 states, "during any period in which the issue of whether a domestic relations order is a QDRO is being determined (by a plan administrator, by a court 19 of competent jurisdiction, or otherwise), ERISA requires that the plan administrator separately account for the amounts that would be payable to an alternate payee under the terms of the order during such period if the order had been determined to be qualified. These amounts are referred to as “segregated amounts.” During the period in which the status of a domestic relations order is being determined, the plan administrator must take steps to ensure that amounts that would have been payable to the alternate payee, if the order were a QDRO, are not distributed to the participant or any other person. The plan administrator’s duty to separately account for and to preserve the segregated amounts is limited in time. ERISA provides that the plan administrator must preserve the segregated amounts for not longer than the end of an “18-month period.” This “18-month period” does not begin until the first date (after the plan receives the order) that the order would require payment to the alternate payee. It is the view of the Department that, in order to ensure the availability of a full 18-month protection period, the 18 months cannot begin before the plan receives a domestic relations order. Rather, the “18-month period” will begin on the first date on which a payment would be required to be made under an order following receipt by the plan. See Questions 2-12 and 2-13, which discuss how benefits should be treated when determinations on qualified status are made either before or after the beginning of the “18-month period.” [ERISA §§ 206(d)(3)(H), 404(a); IRC § 414(p)(7)] Seems to me that the PA has a DRO, but they have not "qualified" it because it isn't properly signed. Therefore, they should segregate payments for 18 months - paying the participant his share and holding the APs portion. I would expect they would notify both parties this was happening, (but you said they already provided their QDRO procedures so if it is in there, maybe they wouldn't need to notify again). If no final DRO appears within the 18 months, they should release the AP's portion to the participant. Has the participant made a formal request to commence his payments? If the AP is holding them up, ask them what authority they have to withhold his entire retirement benefit?