austin3515

There is no need to stay local anymore. Check with local investment advisors, they must work with someone.

Only that the deferral opportunity must be provided to ALL employees, no age or service requirement (some excpetions of course). It's called Universal Availability and is how the 403b meets nondiscrimination on elective deferrals. This should have been posted in the 403b forum, but I'll let it slide because I want to make sure you can see my response...

Are people finding that the brokerage houses of the world are sending out their 408b2 disclosures to the plan sponsors of plans whose participants invest in individual brokerage accounts? Or perhaps the answer is that they had already been disclosing everything that required disclosures due to existing SEC regulations?

My policy has always been that if the area is sufficiently gray, and saves the client $1,000, then I'm all for it. I like to restate just to keep my life simple. And if my life is simple I'm less likely to make mistakes. I would also say that since we use Corbel, I would not be able to ask Robert Richter how to interpret a McKay Hochman document and for me that is a problem. So in that regard using a document that cannot be fully supported sounds problematic to me. And what of ongoing regulatory amendments? The more I think about it the more I come to the conclusion that this is an expense that what could at least make a very colorable argument for payment by the Plan.

To be honest, I don't mind this so much on the investment side because the advisor has so much more control over the critical aspects of that piece. So the universe of complications is almost entirely covered by a good advisor (are the funds any good? Are the expenses reasonable? It's hard to miss the important points...).

What a fabulous point. I think someone above had already suggested their could be MORE liability, and I think this must be what they are referring to. We run into this even as TPA - our clients sometimes assume we have more responsibility than we do. I've been yelled at because the owner didn't defer the max, as if I set his deductions and process his payroll! Imagine what could happen for clients drinking the 316 Kool-Aid to excess and imagining they have not a care in the world. Everything is taken care of (that is, except for everything that is NOT).

Oh, I'm sure they are concerned with it. But let's say the client left out the manufacturing employees because "they are not eligible for the Plan." There is no way that the 316's engagement letter is going to accept any responsibility for that. Nor for the fact that the plan was, unbeknownst to the 316, top-heavy because the owner's daughter had a different last name and was not coded as an owner. Of course I'm not suggesting that they should be held responsible. Only that this is an appropriate analogy: The 316 has locked all of the windows in the house, but they left the front door open. In other words the most obvious problems are unaddressed.

TPA Firm ABC (NOT a 3(16)) has an affiliate RIA that works with the various insurance platforms and receives revenue sharing payments from them. RIA is a co-fiduciary because they receive money for giving investment advice. Would the revenue sharing payments constitute PT's? IT sounds like the relevant section of ERISA is 406(b). I was reading an article related to 3(16) Fiduciary Administrators where Fred Reish is indicating that such providers would NOT have PT's, so long as they are not involved in the investment decisions. So what of the situation I described?

Amen MoJo. Do you generally agree with my supposition that the list of things they accept no responsibility for is exceptionally long (and of course is never mentioned in the sales pitch, but rather buried in 12 page engagement letter)?

Your last paragraph was exactly my point. I do that now as TPA. Why pay more for the same exact service? The only answer is because there is less liability. Note that liability is not eliminated, only reduced. Does the certainty of higher fees today justify the elimination of a remote liability, pertaining to something like a QDRO or loan paperwork?

Because they won't sue the plan sponsor? They sue everybody something goes wrong, certainly the plan sponsor. You seem to have experience in this - are the things I mentioned the 316's responsibility if they go wrong? I'm not suggesting the 316 status brings nothing to the table, only that the issues it addresses are low-probability issues.

Can someone please clarify something about this new trend? If any of you all have had the same experiences as me, most of my clients problems do not originate from the services covered by 316. So for example, clients are not experiencing "liability" issues because of mailing out disclosures, failing to adopt timely amendments, signing 5500's, etc. I'm not saying that there are no problems with those things (nor potential liability) but certainly no "significant" liability that I have ever seen (in fact nothing beyond the DFVC user fees in my experience). The problems come from things like this: -Client provides bad census data (perhaps excluding anyone not contributing) -Client does not implement automatic deferrals or does not implement a participant election -Client inadvertently deposits Susan's 401k into Suzanne's account. -Client does not send in 401k for a pay-period because someone was on vacation -Loan payments do not get set up on the system. -401k is not suspended for 6 months after a hardship -A rehired employee is not permitted back into the plan after rehire -Safe Harbor Match got deposited to the Regular Match account, and then people forfeited money when they closed their accounts. -Even though requested on the census, family relationships are not disclosed -Even though requested on the census, other affiliated entities are not disclosed I just have a very hard time believing that these are the types of things for which the 316 will accept any responsibility whatsoever. In other words, while the 316's are out there saying "reduce/eliminate" your fiduciary liability, it seems to me they have only closed the door on the most benign of exposures. Please let me know, maybe I am missing something. Maybe they are reviewing every transaction during the whole year and I just don't know what I'm talking about. Has anyone ever seen the contracts? My suspicion is that there are dozens of scenarios for which the 316 says "well, that's not my problem."

a) I am billing for a restatement that was done last year. b) I was under the distinct impression that if a client remains on the pre-approved document of another vendor that they can no longer rely on the opinion letter? Is that not the case?

Why does the IRS say that? I suppose it's because of the integral role the plan document sponsor plays with respect to the prototype/volume submitter plan.

We're merging them soon. It was a TIAA plan (and a small one by their standards) so there was essentially no logic. Just set up that way a million years ago, of course to be treated as exempt from ERISA (though they have been filing 5500's for the past many years).

If I do not restate onto our prototype, the "old" document is now an individually designed plan.

Plan provides for a 100% of the 1st 5% contributed match into the "Matching Retirement Plan". Deferrals up to 5% and the 5% match go to the Matching Retirement Plan. Deferrals above and beyond 5% go to the TDA Plan (i.e., the "supplemental plan"). Eligibility for everything is immediate. We're trying to determine whether or not those contributing less than 5% are eligible for the TDA Plan. My opinion is that (and piggy backing off of the DOL's definition of a participant) that anyone eligible to defer more than 5% is a participant. But perhaps there is room to argue that only those actually contributing more than 5% are eligible for the TDA because that plan is only for those contributing more than 5%. We're trying to determine whether or not the TDA plan has an audit requirement (for the past several years ).

Plan moves from RK A to Best TPA. In connection therewith the plan documents are "required" (if the word is used loosely) to be restated in order to maintain reliance on a favorable opinion letter. Can this expense be paid by the Plan? I say "yes". Just wanted to see if others agree.

http://www.asppa.org/Portals/2/PDFs/GAC/ASAPs/14-13.pdf Am I reading this right that if I want to go back to 1997 for my 5500EZ's that I need to scrounge up each form for each year? I would have assumed that I could just enter the respective plan years on a more recent version! If the answer is "yes" where would I get them? Are they still on the IRS's site?

Under 408b2, changes to investment related disclosures must be made at least annually. Does the participant fee disclosure prepared cover those disclosures? I got the impression that legally, it is the other way around - that is, the annual disclosure obligation was required to facilitate the plan sponsor fulfilling it's 404a5 requirements. But as a practical matter, does the covered-service-providers preparation of the 404a5 disclosure cover this?

Can someone please remind me one more time why I tell clients to avoid auto enrollment at all costs? Every client I have that has gone down that road has gotten rid of it. It's OK for the big nationals with crazy robust HR Systems but for everyone else, it's not a good idea.

Well, if the source was rollover it would not make a difference either way. But otherwise I agree.

I assume that would be the sponsor ein even if they are with Great West or John Hancock...

Line 6a

From the DOL's Schedule C Q&A Q25: If a service provider discloses a formula used to determine its indirect compensation, is the plan administrator required to calculate or estimate dollar amounts from the formula for purposes of Schedule C reporting (to the extent that compensation described by a formula is not eligible indirect compensation)?No. Element (g) on Line 2 of Part I of Schedule C requires the plan administrator to enter the “total of all indirect compensation that is not eligible indirect compensation” and Element © on Line 3 of Part I of Schedule C states that the plan administrator should “Enter amount of indirect compensation.” Where a plan administrator receives a formula from a service provider for amounts reportable on Line 2, the plan administrator may enter “0” if that is the only indirect compensation reportable in element (g) on Line 2. The plan administrator must check “yes” in element (h) of Line 2, and attach a statement describing the formula(s) that is labeled “Schedule C, Line 2(h) formula description.” Where a plan administrator receives a formula from a service provider for amounts reportable on Line 3, the plan administrator may enter “0” if that is the only indirect compensation reportable in element © on Line 3. The plan administrator must include in element (e) on Line 3, a description of the formula(s). My Question With respect to the bolded paragraph, has anyone seen such an attachment? Great West is indicating that their comp is NOT eligible indirect on their schedule C report AND that they provided a formula. Has anyone included the attachment described above? Also, why is GW saying that it is not eligible indirect? I had heard that the 408b2 should have made everything eligible indirect? Perhaps it is, and they just did not reprogram their systems?