austin3515

I have to say that it sounds a lot like blackmail as described. I suppose only those with deep pockets who are willing to "sic the lawyers" are afforded such protections.

masteff, I have no problem if they want to do away with the windows inside a larger plan. Because they have a viable option available. It's the 5 person plan with $100,000 that I would worry about. I don't even know what I would tell them to do. Honestly, there is no alternative that is priced below say 2%. Does anyone disagree with that? Well I guess American Funds RKD, but then they have to pay for recordkeeping out of pocket.

Great solution. As soon as brokerage account providers spend millions of dollars to revamp their software to provide for such limitations I promise to take it back. But I won't hold my breath. The Fidelity's and Schwabs and TD Ameritrades do not have that type of functionality. And as a general rule participants are given trading authority on the accounts because of course the Trustee would not want to be the one calling Fidelity to request trades.

Will someone please tell me that not even the DOL would be this rash?? There is literally nowhere else for the small plans to go... http://lawtonrpc.com/lrpcs-weekly-insight-brokerage-account-windows-shutting-in-401k-plans/ What is the likely outcome? Most experts think the DoL will: Establish fiduciary guidelines and limitations for offering brokerage account windows;Require more notices for plan participants who have access to brokerage account windows;Bar their use as the only investment option in a retirement plan; and

This is a "Consent to Extend the Time to Assess Tax on a Trust" Basically the IRS is auditing 2010, is afraid they won't finish their audit in time and wants the taxpayer to extend the statute of limitations for another year. It says right on the form: "The taxpayer(s) has the right to refuse to extend the period of limitations or limit this extension to a mutually agreed-upon issue(s) or mutually agreed-upon period of time." Question: Why in the name of all that is logical would a sponsor sign such a form?

http://www.irs.gov/pub/irs-drop/rp-14-28.pdf

I would like to clarify one thing - the most significant variable in determining the benefit is receivables, but for example, the payment is also determined based on number of years of service (the more service the bigger the benefit).

Medical practice has a deferred compensation plan. When a Dr. leaves the practice they are entitled to a deferred compensation payment which is almost entirely derived from the collection of receivables. Is this payment for services rendered (subject of course to 2.5 months/last day of plan year) or ineligible deferred compensation, because it only becomes payable after severance from employment? Or is the answer, you really need to dig into the particulars of the contract? This must come up often, so I'm hoping someone can offer a rule of thumb!

Never sending in 401k money is the one that I have seen in the small market. I have to assume that personal gain cannot be a consequence of the breach in order for insurance to kick-in. And of course that's where the small plan market gets into trouble - putting their own interests ahead of the plans (i.e., investing the plan's assets in real estate that they use in the summer, never sending in 401k, loaning money from the plan to another business they own for cash flow crunch, etc). I just can't see how the insurance policy would cover such breaches, but I would be curious to hear from someone more in the know. Now, if you invest in a non-prohibited transaction investment that becomes worthless, or perhaps you default a 65 year-old's $500,000 rollover into the aggressive growth fund just before the bubble bursts, then I can see where fiduciary insurance would pay-up if it came to it.

OK, you got me. I meant how many fiduciaries were sued. Answer to my question: None. I don't know that for sure of course, but I'm pretty sure

Perhaps you can answer this question: In 2013, how many plans whose assets were invested in mutual funds on a standard platform, with assets of less than $20M, were actually sued for a fiduciary breach? To read all this nonsense on "fiduciary liability!!!" you would think there were hundreds if not thousands. I suspect business owners have uninsured risks that dwarf the likes of their fiduciary liability with respect to the plan without a second thought. I should think by now I would have witnessed something in my career if it really was so prevalent.

Now that is hilarious

Still not following your OP. How could you get 8,000 for a $300 policy?

BG I cannot understand that last sentence which you have said the same twice. Not sure if you want to explain? You've got curiosity piqued.

In what way is your question different than the interaction between 402g and catch-ups? It's precisely the same application, just a different limit. I think it is border line impossible that your document would not permit this. Our Corbel doc defines catch-up as (notice that there is no distinction between 401a30 (which is 402g of course) and 415©: 1.11 "Catch-Up Contribution" means, effective for taxable years beginning after December 31, 2001, an Elective Deferral made to the Plan by a Catch-Up Eligible Participant that, during any taxable year of such Participant, exceeds one of the following: (a) a statutory dollar limit on Elective Deferrals or "annual additions" as provided in Code Sections 401(a)(30), 402(h), 403(b), 408, 415©, or 457(b)(2) (without regard to Code Section 457(b)(3)), as applicable; It then goes on to say: (d) Certain amounts are not "annual additions." For purposes of applying the limitations of Code Section 415, the transfer of funds from one qualified plan to another is not an "annual addition." In addition, the following are not Employee contributions for the purposes of Section 4.4(e)(1)(b): (1) rollover contributions (as defined in Code Sections 402©, 403(a)(4), 403(b)(8), 408(d)(3) and 457(e)(16)); (2) repayments of loans made to a Participant from the Plan; (3) repayments of distributions received by an Employee pursuant to Code Section 411(a)(7)(B) (cash-outs); (4) repayments of distributions received by an Employee pursuant to Code Section 411(a)(3)(D) (mandatory contributions); (5) Catch-Up Contributions; and (6) Employee contributions to a simplified employee pension excludable from gross income under Code Section 408(k)(6). So you never have a 415 excess. The very first penny over the statutory limit is NOT AN ANNUAL ADDITION. 1.11 makes it a catch-up contribution, and the next paragraph tells us that catch-ups do not count towards the limit. The argument of "well how do you know it was the 401k and not the profit sharing that went over the 415c limit" to me is a non-starter because only Elective Deferrals can be catch-ups (I've pondered this question myself). So, did you make a contribution over 415©? Yes? OK, then the profit sharing gets pushed up the 415 tube and the deferrals spill out of the top and into the catch-up tube. If the profit sharing was dropped in at the top of the tube and were left there above the 415 limit, then the reference to 415c has no effect. And it is well accepted that to interpret a law in a way that renders it useless would not be a reasonable interpretation. Your document probably uses similar structure. Check it out.

How is that not an insurance commission? Anyway, no skin off my back, I'm sure you did your homework. Also, I'm sure the insurance company would never pay a fee if it wasn't allowed to. I just hope you had a typo - $8,000 fee for the bond? Maybe I will start selling these bonds

I assume you have an insurance license though, correct? We don't. Seems to me the HArtford should just have a web-site to do this...

Is there a web-site from The Hartford or Travlers, etc. that I can provide clients where they can fill out a short form on line and get a fidelity bond? It seems to me if it was that easy it would be easier on me instead of telling them to call their agent, getting them involved etc. I'm sure the agents would love me for it.

I notice that the last update to this page was in May 2013, so it seems this has been around for a while. We haven't heard anything yet but maybe they were just getting geared up.

By the way, you cannot ignore it of course. But then it is so ridiculously obvious that it does not merit any discussion, in my opinion. I mean, DUH.

I read it on the Kiplinger letter myself...

A client (and RIA) just told me Kiplinger sent out a mailing saying that the IRS will be matching the deduction for ER Contributions on the 1120's with the Er contributions on the 5500. Apparently differences of > $1,000 will receive a letter. Let's ignore for a moment the number of false positives cash basis/accrual will generate. Does anyone have any literature on this? An IRS announcement, or perhaps a link to the Kiplinger letter?

I assume rolling the $500K to an IRA would not help, but I think I would ask that question of someone in the know. There are a lot of alternative investment IRA providers, just not sure if the same PT rules apply.

I agree about firing it up right away. I've never told a client they have to adhere to the 30 day rule in year 1 because if you go before 30 days its facts and circumstances, and the plan having not been existence until now is certainly a relevant fact

It might be moot though if there is a single legal entity employing everyone. Unless the seller's plan was amended coincident with the transaction to exclude the buyer's employees then those employees would be eligible if they had met the eligibility requirements. This has nothing to do with 410b6c. Some plans will exclude employees acquired through a 410b6c transaction, but the employees being excluded would not be covered by this exclusion (i.e, because they are not the "acquired employees."). I am also troubled by the fact that the plan was adopted after the acquisition. Upon the acquisition, the sellers employees all have a distributable event because they had a severance from employment. We therefore always word these things that the transfer of sponsorship is coincident with the acquisition (assuming of course we knew before hand ). I have no idea what this means from a compliance perspective but it sounds problematic.