austin3515

OK, lets say RK USA is an open architecture platofrm and the Plan holds funds from 8 different families. RK USA is not responsible for sending prospectuses. Rahter each fund company sends the prospectuses to the trustee. Are we saying each fund family needs to be listed on the schedule C as having provided the required information to the trustee?

I was writing my rant while Derri was responding... I walk away with my tail between my legs

This is completely different than a mutual fund. Investing in a mutual fund is like investing in a stock. It's an Individual Security. The expense ratio is just a disclosure to its investors. IT is not an expense of the Plan, not no way, not no how! If the fund pays money to other service providers, than we've got indirect comp. How could Derrin POSSIBLY agree with this perposterous conclusion (with all due respect to one of the TOP industry experts)??? I'm convinced the DOL has absolutely no shame, no consideration whatsoever for the world around them. Yes. The 2009 Form 5500 instructions provide that persons who provide investment management services to investment funds in which plans invest are treated for Schedule C reporting purposes as indirectly providing investment management services to those investing plans. Thus, fees that are paid out of an investment fund's assets to the fund's investment adviser (or its affiliates) for managing the fund's investment portfolio are reportable indirect compensation for Schedule C purposes. The instructions are clear that "investment funds" for this purpose include registered investment companies (commonly referred to as mutual funds) that do not hold plan assets by reason of ERISA section 401(b).

Has even one provider reached this conclusion?

From ASPPA's ASAP speaking about the requirement to attach a schedule C, and the DOL's recent mailing spree regarding failure to attach a schedule C: "For example, consider Vanguard Wellington Fund Investor Shares, which have no sales charges or 12b‐1 fees. The prospectus, however, shows 28 basis points of management fees. At that rate, an investment of only $2 million will generate a management fee of $5,600, well above the limit for which the plan must file Schedule C." I believe this is flat out incorrect. Am I wrong here? The expense ratio is considered indirect compensation?? Just to be clear, the prosectus refers to a .3% expense ratio as of today, and 2011 was .29%, so it appears abundently clear we're talking aboutt he expense ratio.

We unfortunately did not realize the error of our ways on this decsion until it was too late. But for PPA we wisened up. But then of course they eliminated this requirement for prototypes in PPA )(at least I think they did)...

I'm actually pretty positive that there are sepaate allocation rates. The definition of allocation rates for this specific purpose is just contriubtions divided by comp - no integration. The question is solely can this be considered a reasonable classification. Bird, you are saying it would not be.

I still don;'t think 37bps is a "rip-off" for RECORDKEEPING. Probably could do better, but its not aggregious. I've seen providers charge .8% for RK/TPA work. Somoene alluded to average account balances indirectly, which is a huge consideration with pricing. Based on the info provided, the average balance is about $38,000, which is pretty good actually. You could probably get better pricing for recordkeeping/TPA work.

Got a new comp plan where everyone is in their own group, and the plan is a prototype and therefore bound by reasonable classification for the NHCE's. I find it to be reasonable that everyone who is over the wage base gets their stepped up contribution. And because of the size of the company, I'm below the maximum number of allowed allocation rates. What I'm getting at, is may I run an integrated allocation, as long as the number of allocation rates does not exceed the maximum allowed. Could the application of the integration rules be deemed a reasonable classification?

I'm assuming what is being referred to as a TPA is more likely than not a recordkeeper that also does the TPA work. And 20bps for recordkeeping I don't think is out of line with what I've seen. Does the 20bps include the recordkeeping services, MD Benefits? (i.e., maintaining web-site, sending out quarterly statements, etc)

just to be clear, I'm not advising a client not to restate. Rather the client did NOT restate, and we're trying to figure out if any response is required. We are putting them on our prototype so going forward they're ok. (it's a brand new client for us by the way )

This is verbatim the answer I got from an ERISA Attorney who suffice it to say "knows his stuff." But if someone can show me that "section 401Whatever says thou shall restate every 5 years" I would LOVE to read it. It seems to me that any such requirement would be mandating Form and not Content.

It sounds like the due dates of my inteirm amendments may have been different than what the attorney may have thought originally. Where do I find the due dates for amendments for plans that did NOT submit for a DL on their 5 year cycle?

Can someone please explain to me what is required for an IDP Plan Document which was NOT restated on-cycle for EGTRRA, but DID make all of the amendments required (EGTRRA, final 401k, rmd, ppa, HEART, etc)./ The client obviously never submitted for a DL (which WOULD require restatement), but I didn't think every plan was automatically required to restate as a condition of qualification. This IRS web-page does not indicate anywhere that it's non-amender program is for plans that did not RESTATE their document - only that it is for plans that have not made the required amendments. http://www.irs.gov/retirement/article/0,,id=205524,00.html Thanks in advance...

The whole story is that the client was caught off guard by this "new charge" from their provider, and their employees were notified of the new charge by their provider, so to make amends with the ee's they said they would pay the fee for just the one year. And the new charge is only related to new money this year, so the 415 issue is not a concern here. Truth be told, the provider could have the fee paid by the employer, but to do so for just one year would have been cost prohibitive for the vendor.

I just read it and I don't see any support for this in there either. Not even sure why it was provided as a relevant site... Bird, you;re thinking this is a contribution, right?

We've had the same issue. We just respond and tell them the right number. FWIW.

Yes, but do you reduce earned income starting at 245K, or do you reduce it at the uncapped figure. That appears to be the question. FWIW, I refuse to reduce from the capped figure because I am sure I would be the only one doing so . Well, it wouyld be and mbozek!

That;s a completely unrelated topic. BEfore the AO, if a plan had ANY investment in the TIAA Traditional, they were NOT showing it as an asset of the Plan. This AO says that you are required to report it as an asset. Handling the interests of terminated participants is a separate and unrelated issue.

Just to make sure no one ever calls my bluff, I'll just do the amendment. But thank you very much for the contrasting opinion!!

So Bird, you are saying that the deduction rules do apply the same way to Schedule C's as they do to corporations? Mbozek seems to think otherwise? I don't know who to believe!! Two reliable sources with contradicting answers

I have to say though Relius's admin and documents have been fantastic, and their responses are similarly successful and timely. I'm the first to throw em under the bus on the 5500 nonsense they sent out (we switched to FT for 5500's and 1099s), but their documents and admin products AND support are absolutely top-notch. With respect to documents, I submit a question and a fairly high percentage of the time I get a call from a "pension celebrity" to discuss/answser my question. Maybe the others have similar quality of service, but I doubt I will ever find out!

"So What" just that I need to do an amendment, worry about nondiscrimination, etc. That versus essentially no work at all. That's so what. I didn't give up on the project because it was a contribution .

Are you saying the max deductible applies differently to schedule C businesses as opposed to all other forms of entities?

I think TIAA placed its argument in the document that I posted. I have since learned from TIAA that in order to be eligible for this reporting, the sole investments must be variable annuities, as opposed to CREF Mutual Fund. If you go to TIAA's web-site, the vairable annuities are in the section that includes The Stock Fund, and the Bond Fund. The target retirement date funds, etc., are un the mutual find section. Investmetns in those funds are not eligible for the exclusion. I'm finding tha tmost of my plans are using the CREF Funds anyway. Here is the web-page I was referring to that shows the TIAA-CREF Variable Annuities. http://www.tiaa-cref.org/public/performanc...eId=tcpub-admin