austin3515

I'm nto talking about the data, but the definition of the DER itself. I have an access program that builds my takeover transaction data file for import. We have to manually create the DER itself one column at a time. I was wondering if there was a way to import the DER definition into DER set-up somehow. I don;t think there is but thought I would ask...

Ironically Gilmore, it seems to me an Employee Leasing arrangement would be the scenario where it could make some sense in terms of econcomies of scale. But as a general rule all of the things that make administering a stand alone plan more expensive are still present in an open MEP: -Onboarding expense / conversion. Anyone who has been through these knows this takes probably 15 to 20 hours of a recordkeepers time, probably more for all I know. -Customer service / call centers. If the average account balance is low, an Open MEP won;t fix that serving such accounts is just not profitable no matter how many you do. -Ongoing customer service. For every ongoing plan, customers are going to have questions, and problems, etc. You have a 1,000 employers on your plan? Good for you! You've got 1,000 sets of problems - not 1. -Last I checked every Employer of course still requires testing. The audit is of course the big variable and whether it helps or hurts depends on whether or not you have more or less than 100 participants. So Pam don;t get me wrong, I see very much so that there is a place for these in the market especially depending on the mindset of the employer. The question for me a TPA is, "does my world evaporate in favor of the open MEP approach?". I consistently conclude there is a place in the market for me too! I'll just add that I feel like the competitive process for these will almost end up being like the bundled versus unbundled arrangement. Bundled has always been cheaper, but cost is not the number one factor for any of my clients.

Thanks Pam!

Good question! I know the auditors want to do internal control walk throughs as well. I assume each employer has their own "systems" that need to be reviewed at some point. Interesting. The Plan as a whole is subject to audit, that much I know.

Can I ask what happens if you have a client that sends in a deposit a month late because perhaps there was a data feed issue, or they did not release the funds in time? I realize that you're in a different positiion as the plan sponsor then "just recordkeeper." I am very intersted in getting a better understanding on how problems are addressed when you (as the "vendor") just a lot more skin in the game on these sorts of things. Thanks in advance if you're willing to share!

Well, I can answer that question! Because the IRS said so in their opinion letter!

Thank you RBG. I hope we're right.

Are any of the national players setting one up? Or will it be more of a niche thing? Why would the big players do this knowing it cuts out their number one referral source, advisors? Or are they setting these up so you can plug and play with your own advisor/TPA? Everyone says the market is moving but I'm skeptical for reasons that I find not to be related to my bias... Employers just seem to be giving up too much control over something that is integral to their operations. That's my take on it anway... You have a few late deposits and they force you to pay $1,200 for a VFCP [edit] application is only the first example that would come to mind...

We;re just listening in on the Corbel/FIS training for documents and they are telling us about these new "Flexible" vs "Rigid" discretionary matches. Basically you have to provide notice within 60 days of funding if there is any discretion related to the ALLOCATION of the match.e.g.., discretion regarding excluding deferrals in excess of x% of compensation, discretion regarding the computation period, etc). Was this new requirement imposed on all document providers? i assume it was, but would be curious to know what else is out there. IT's a pretty onerous requirement...

Is there anything going on out there for these plans? I keep hearing "theyre coming!". Are they? I haven't heard anything. I would expect the Empowers and John Hancocks, etc. to be the ones leading the charge, but I don;t hear anything.

IF a plan document excludes overtime for example from the match calculation, does that present a Benefits rights and features issue? How would that test even work? People with no over time are treated as benefitting the same as HCE's? My brain starts to melt down. I would hav thought that if I passed testing based on a 414s definition of comp I was ok. I have never heard of this before in 20 years...

That solution would not be "administratively feasible" is the point. But I think the DOL thinks more like you which is why if up to me, I do the lost interst and treat as late!

Here's the deal. If they are doing a default enrollment, where everyone is being mapped to QDIA, most can/will accept the deposits before the transfers. The issue comes up where they want to map over a participant's investment elections from the prior recordkeeper. The recordkeepers physically can't do that until those elections are provided, and they are provided as a matter of necessity only with the transfer files (i.e., to ensure that they are the most up to date elections). Part of getting the plan out of blackout is loading those elections. Hence, they can't process contributions until the plan is out of blackout. I hope that clarifies why some can vs cannot process contributions before the blackout. And the question is definitely not whether or not the delay is justifiable enough to avoid treatment as a prohibitted transaction. I personally think that it is. The question is whether the DOL would agree! I think for those of us not in the recordkeeping business it is easy for us to underestimate how complex it would be to process a deposit on a recordkeeping platform when the money is already held by the recordkeeper. I assume it requires quite a bit of manual manipulation - hence they won;t even go there except for a jumbo plan. Especially since the consequence of delay is so insignificant.

I could see the DOL saying, "why wouldn't it be *reasonable* to accept a deposit during blackout? You need to find a better recordkeeper if they can't even take a deposit!" I place asterisks around *reasonable* because I want to make it clear this is not the Webster definition of reasonable, but rather the DOL version of reasonable. Bottom line is, count on the DOL to apply the Webster-definition of reason at your own peril. OK not peril, but don;t count on them to agree... The CPA auditor for MoJo is taking their cues from the DOL.

Not my problem... This was a manager so not concerned. Agreed, but this is very impractical without cooperation of the recordkeeper. Not going to go out and open a checking account for one deposit. So it seems we agree on this point!

For us, and as is the "norm" absent a jumbo plan, the recordkeerper would not take the deposit out of normal systems. I did ask, but we were denied. In my case Alonzo, interestingly enough, it was me who said it should be late, and the auditor who said it would not be. I'm surprised the DOL has never said something publicly along the lines of "a blackout is not the participant's fault" so late is late. Without question the path of no risk is to do the interst calc. But alas that is a pain the @$$... so I did not argue the point!

401k plan is going into blackout and cannot process a deposit until after blackout is over. Therefore one payroll will be a week late. Will that deposit be considered late, or is there a facts and circumstances component to this? My thought is late is late but I have come across differing opinions out there, so curious to see what others thing. I have a feeling the DOL would agree with me FWIW.. Thoughts?

We had to go back and amend a 2015 filing for a Plan. FT automatically: 1) Converted the filing to the 2019 form (per the DOL's requirements). 2) Converted the 2015 Schedule R to a pdf and added it as an attachment (again the per DOL's requirements). Myself and another consultant were absolutely in shock that they did that. We thought we were going to spend an hour rekeying everyhing. I'm telling you, FT William is one of my favorite companies to work with. OK maybe other vendors software would do the same thing, I don't know. If they do, then kudos to them as well.

Sorry, so that means you think this would work then, correct?

I thought that was just a poison pill for the ACP safe Harbor? And for BRF, I would think I was ok because the lower 4% is more generous then the next 6% (in terms of vesting).

Plan currently has a dollar for dollar match on first 10%. I think I can have a dollar for dollar match on the first 4% as safe harbor, and then dollar for dollar on the next 6% as a discretionary match. I would still get to keep my ADP Safe Harbor, but obviously no ACP Safe Harbor. My understanding is that this does not create any problems at all, right? i just have to run my ACP Test.

Sounds like it is probably an Affilliated Service Group. The significance of this is that all "one-participant plans" of a controlled/affilliated service group are considerd in the aggregate to determine if the $250,000 threshhold is exceeded. From the 5500-EZ instructions (2019) "You do not have to file Form 5500-EZ for the 2019 plan year for a one-participant plan if the total of the plan's assets and the assets of all other one-participant plans maintained by the employer at the end of the 2019 plan year does not exceed $250,000, unless 2019 is the final plan year of the plan. For more information on final plan years, see Final Return, later." So interestingly, if the parent's plan is not a one-participant plan because of the kids, then the elder daughters plan does not have to be aggregated with it for purposes of determining the $250,000 threshhold. Although shockingly the above quote from the 5500-EZ instructions does not indicate that the term "employer" includes all employers in the controlled group/affilliated service group (nor anywhere else in the instructions) , it should be read that way in my humble opinion. As Bill said, if non-owner kids are participating in the parents 401k plan, then it is not a one-participant plan. If the elder daughter owns her own S-Corp and has her own plan, then that plan would be a one-participant plan. similarly if she is not considered to be a common law employee of the parent's S-Corp she would not prevent her parents plan from being a one-participant plan. But because the elder daughter has younger siblings who presumably are common law employees of the parents, they would prevent the plan from being one-participant.

yup, thats it!

I was trying to find something in EPCRS that says that in certain situations if impractical you can use the DOL Lost Interest Calculator to adjust a corrective allocation for gains). I routinely see attorney drafted VCP apps take this approach and have never seen it questioned. Can anyone shed some light on this for me? IF we're depositing a $100 into someone's account, we don't want to charge the client $250 in fees.

Interesting. When is the trust terminated? Do they set these things up to run for 5 years or something, and then close them out? And then if none of the employers go bankrupt, essentially everyone in the pool gets their money back plus interest on the investments, less administrative expenses. Is that about right? To your last point I could see where it would be limited to publicly traded companies. I'm sure they set the premiums based on the audited statements.