austin3515

So which line would you include it on? Appreciation/depreciation?

Where on Schedule H would these expenses be included? They include an appraisal and maintenance/landscaping. Nothing in the Plan seems spot-on. It doesn't seem to fit into the description "appreciation/depreciation" but doesn't really feel like an expense either. As a pre-emptive disclosure, this is in the context of a large pooled plan, and real estate makes up less than 5% of plan assets. And its being leased to an unrelated tenant.

The UBTI applies to any leveraged investment, doesn't it? Otherwise, you could invest in real estate with after-tax dollars (the lenders after-tax dollars) and have all of the income tax sheltered (net of the interest expense anyway). Isn't the point of the UBTI rules to prevent this?

I didn't see any reference at all to the PT rules in 408b2 (aside from not providing the disclosure)? J Simmons, can you please explain?

That doesn't make a lot of sense to me - I thought that was a huge no-no. The presumption is ALWAYS that it is not appropriate. The whole point of doing that is that so that the DOL wouldn;'t have to sit there and decide if it was reasonable.

I agree, I got off my you know what and looked it up and found that sibling is not on the list. But I also agree (and what I said to the client) is that upon audit there would be some pretty serious scrutiny of this appointment.

Can the brother of an owner be the paid investment advisor for the plan? (i.e., paid from plan assets).

http://www.irs.gov/pub/irs-tege/epn_2014_18.pdf IRS newsletter clarified that the SUP is only for people not already required to file electronically. The compliance questions will be added to the 5500-SF. So at least we are not going to be required to file two separate forms. PS, the 250 threshold counts each w-2/1099 as a separate return.

There are new opportunities for rolling after-tax balances to Roth IRAs that did not exist last year (as discussed above) in some of the links.

Definitely a blunder...

The allocation should be based on account balances? Disclosing this could never be a problem. It might not be mandatory depending on what your fee disclosure says. In essence, these are fees that are not being assessed though so the disclosures should be optional.

Go with in-plan roth conversions in that scenario. I see no purpose for it in a qualified plan at all. No one in their right mind should be doing after-tax unless they max out on Roth. And why add after-tax if you're not already allowing Roth. So maybe it's a good idea if you have an NHCE base that is maxing out their roth who want some additional opportunities, But exclude the HCE's from the opportunity. Never say never, but I guess that's the only scenario I can think of. And to Tom's interesting point, only then if the plan is not top-heavy,.

"If it's a 2/28 plan year end, you can amend now to be effective 3/1/2015." But not if it is a 12/31 year-end, correct? That was my conclusion as well, but wanted to see what others thought as well.

Is it possible to add mid-year? What if we amend today have it effective 3/1/2015?

I hate good points with a passion sometimes.

Follow up question. At what point do we need to inform participants about this other opportunity to have the self directed brokerage account? Assume RIA's minimum account threshold is $500,000. Can I limit disclosure of the arrangement to participants who have $500,000?

http://www.dol.gov/ebsa/regs/fedreg/notices/2002031366.htm Section I: Covered Transactions (PTE 97-11) ...the sanctions resulting from the application of section 4975 of the Code... shall not apply to the receipt of services at reduced or no cost by an individual for whose benefit an IRA or...a Keogh Plan is established or maintained... from a broker-dealer registered under the Securities Exchange Act of 1934 pursuant to an arrangement in which the account value of, or the fees incurred for services provided to, the IRA or Keogh Plan is taken into account for purposes of determining eligibility to receive such services, provided that each condition of Section II of this exemption is satisfied. Part of me says a big part of this exemption is the receipt of services at reduced or no cost, but I guess the point is the assumption is reduced. And then it goes on to say that the PTE does not apply to plans covered by ERISA by extrapolation means no such arrangement taking into account outside assets would pass muster in an ERISA Plan. So QDROPhile, you have convinced me (and impressed me).

"How" is an operational question and "why" is a philosophical question. I think we should focus on the compliance aspect of the question.

Do you have PTE numbers so I could try and find them? Also, does your analysis change if the fee structure does not take into account outside assets? i.e., they are just being used to satisfy the minimums?

We're keeping the list down to just a few "approved" advisors.

Well that's basically my point?

Thanks Bird! ETA, I recognized by your Good Luck! - I assume you are indeed ERISA Toolkit?

How is it a prohibited transaction? Who is the party who has committed the prohibited offense? This seems to be at least shrouded in murkiness... Is it really self dealing? It seems to me you could argue that it is not because it is the advisor's policy alone.

I think this is quite a bit more grounded in real-world circumstances actually. If an advisor has a million bucks with someone he would be happy to add the $50,000 401k account as part of a major relationship.

Advisor says I will open an individual brokerage account for those participants who have at least $500,000 if they choose to do so. What are the implications of including accounts outside of the plan in that determination? So let's say the Participant has $100,000 in the plan and $450,000 in an IRA? the total relationship exceeds $500,000. The criteria was established by a party independent of the Plan so it shouldn't be discriminatory. It doesn't seem at all like the self dealing issues where the financial institution throws in free banking services for the sponsor. The brokerage account would hold only stocks, bonds and mutual funds, so I think it is ok to assume that the participants (who can invest in all of these things through mutual funds) have substantially the same opportunities.