austin3515

When calculating an RIA's fees, can/should the value of accrued interest on bonds be included in the portfolio value? Is there guidance written anywhere on how to value an account for charging fees?

From 1.401(m)-2. This is the big issue! (iii) Matching contributions. A matching contribution is taken into account in determining the ACR for an eligible employee for a plan year or applicable year only if each of the following requirements is satisfied— (A) The matching contribution is allocated to the employee's account under the terms of the plan as of a date within that year; (B) The matching contribution is made on account of (or the matching contribution is allocated on the basis of) the employee's elective deferrals or employee contributions for that year; and (C) The matching contribution is actually paid to the trust no later than the end of the 12-month period immediately following the year that contains that date.

Ding ding ding. ACP test match contributions are due by the 12/31 following plan year-end. I can't remember if they are included in the following years test or if they are nonelective contributions.

Yes, it is a global setting so it can be enforced on an organization basis. The checkbox on the local software is disabled so the "require recipients to login" is checked and cannot be unchecked.

To be more precise: Sharefile has an option where you can "encrypt" a file and it is replaced with a link to their servers. When the user receives the email with the link, they click the link and are brought to a page that says "Please enter your email address to decrypt this file." . The message itself is NOT encrypted. It is traveling over normal email pathways. Anyone who can access the email itself can unencrypt the file because the credentials are contained within the body of the email, and again, if anyone clicked the link it would say "enter your email to decrypt." No "hacking" required. This is literally no different then sending an email with a password protected spreadsheet, and then in the body of the email tell the recipient what the password is. So are we on the same page that this is not adequate for SS#'s? This is what EMoney is doing (I know this because I use Sharefile with lots of other firms too and have accessed files using this "email validation" method).

Why would it be of no value? The link is in hand, and the credentisals are in hand? This is akin to locking a deadbolt but leaving the key in the keyhole? You agree that if it was snagged in transit, then anyone (including a hacker in North Africa) can access whatever is "encrypted"? All they need is the name or email address, and that is already in the email. Whatsmore, when you click the link it will say "Please enter your email address" so it's not even like they have to be clever about trying to solve a puzzle.

I dont undertand though. Between point A and point b the email istelf is on a dozen different servers and travelling over "public" lines. Anyone can snag the email in transit. In other words, if what you were saying was true, and email could not be snagged in transit, why would we need encryption at all? You would never send an Excel file unencrypted in any way right? Isn;t that because it might be captured in transit? If it can be captured in transit so to can the email (which includes the combination to the lock?).

Are you suggesting that the "enter your name or email address to decrypt" method is acceptable to protect SS#'s? I can't tell from your response...

I can;t figure out why that's even an option. Anyone with the email can access the files. I strongly recommend you require the passwords to open. The email (and thus the key to vault since the email itself includes the credentials (aka their name)) is traveling unencrypted all over the place and can easily be snagged in transit. Maybe its ok for internal financil documents or soemthing, but definitely not for SS#'s and DOB's. I'll bet if you asked Sharefile they would say the same thing I am.

Thats the Office 365 one. It is brilliant. You can either sign in or get a one time code sent that is valid for I believe 10 minutes or something. The problem as you suggested is they have to find an early secure email from you be able to get back in and send something encrypted. Sharefile allows you to upload files through the use of a simple link that we can include in our email signatures (so our clients need only find the last email we sent them).

We use Sharefile and I suppose it is OK, but it is too complicated for a lot of our clients and I presume there must be a better option out there. I'm curious if anyone uses a different system. Sharefile is integrated with Outlook so we can easily encrypt our attachments, AND our clients can upload files directly to our own personal in box. But the password thing is clunky, clients always forget their passwords, etc. Anythng better out there?

Enjoy!

OK, we'll all be waiting with baited breath to see what the response is! I won't be able to make it myself.

The winter virtual one?

Well there is one practical disadvantage. If you're the one calculating it, your client needs to provide you additional information. So I suppose it is more work for you and more work for your client. But if you're goal is to do what's best for your client then that wouldn't be a disadvantage at all! It will save them enough to make it worth the extra 5 minutes of work.

This is what I came up with to really isolate the crux of the question. I dispensed with all the deemed loan stuff, and just stuck to a straightforward fact pattern that comes up all the time. Question: Participant's 401(k) Elective Deferral account consists of $9,000 of a participant loan and $1,000 of Mutual Fund A. Participant's Profit Sharing Account consists of $50,000 of Mutual Fund A (the Participant is already 100% vested in this account). The Plan exclusively allows for hardship distributions from 401(k) Elective Deferrals. The Participant would be eligible for a $5,000 hardship distribution, except that the liquid balance in his 401(k) Elective Deferral account is just $1,000. If the Employer/Plan's administrative policies surrounding participant investment direction allowed for it, would the Participant be permitted to elect the following transfer? Transfer $9,000 of "Loan" TO Profit Sharing (FROM 401(k) Elective Deferrals). Transfer $9,000 of Mutual Fund A TO 401(k) Elective Deferrals (FROM Profit Sharing) Proposed Answer: Yes. The balance in each respective plan source is identical before and after the transfer. The only difference before and after the transfer is the investment breakdown of the investments allocated to each source (as happens normally in a participant-directed 401(k) plan). The laws governing participant loans are designed to make it clear that participant loans are investments.For example, see page 12 of the following document prepared by the US DOL which states in part regarding participant loans: "The loans, which are considered investments of the plan, must be available to all participants on a reasonably equivalent basis, must be made according to the provisions in the plan, and must charge a reasonable rate of interest and be adequately secured." https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/publications/meeting-your-fiduciary-responsibilities.pdf

Great idea!

Plan covers only the 100% owner and his wife. The Plan has to be aggregated with another plan to pass coverage (i.e., the other plan covers nonexcludable employees). What's really happening is that there are leased employees who are benefitting in a plan that has an identical design (which is why we can aggregate). But is my plan a one-participant-plan eligible for the 5500-EZ? i.e., is it exempt from ERISA?

Exactly. To tell you the truth I think that if we could ever find a PEO that would let us do everything related to the admin for our plans, that would be the home run scenario for this stuff. Because if you're the PEO, you're already running the payroll, the data is yours, etc. And of course you're not a 316 you're the actual administrator. Anyway, obviously finding a PEO who would let me do that might be harder then finding the Lost Ark. And yes PEO's are expensive but there is a clear value proposition there, where I think this 3(16) stuff just does not add enough value to justify the extra fees that they charge. But that's just me.

Nothing. And I recently spoke to a wholesaler for a large recordkeeper and he told me his region added something like 80 new plans and one took 3(16) services from a TPA. And I'd venture a guess that that one client is getting "ripped off."

Pretty much the thought process we are going through! Major major committment, entirely new operation. And getting plenty of new business without having to mention it... But I do like the idea of saying "hey, I can send notices for you and sign off on distributions." This processing payrolls and getting full census data each pay-period seems like an overreactive fix to a problem that I don't see is out there.

In general, I am pessimistic about the 3(16) business model, but I get that there are aspects of it that appeal to clients. My question is, do I have the latitude to pick and choose which things I will offer as a 3(16)? So for example, I think it rather unappealing to clients to take over the deposit process because most clients want to be involved in ACHing funds out of their own operating account. But I think in general clients LOVE the idea of a TPA signing off on distributions. Signing a form 5500 - not a big deal since I already prepare a signature ready form. But responsibility for sending out notices? Quite appealing. So the question is, can I have a "3(16)-lite" offering, charge a little bit more for it, and take over those things that are the most value added (emphasis on the word value). I already understand the concept behind the full suite of services, so no need to sell me on that!

In this example, the funds are money, and money is fungible. You're question is framed in the context of somehow getting a boon for the participant by somehow circumventing the vesting rules. This ignores the fact that you are transferring an equal sum of money into the profit sharing account. A you know, people rebalance their accounts in participant directed 401ks all the time, and can indeed switch their accounts between Fund A and Fund B in different sources as I described. So this actually happens, so it is unclear to me why you would suggest it cannot and therefore presumably does not happen. And how can you account for the existence of pooled accounts where all investments are commingled and there is NO attachment of source to any underlying investment?

What's the difference between your question and this question: "can I change how my 401k is invested from Fund A to Fund B? And can I also change how my match is invested from Fund B to Fund A?"

For treating a loan like an investment? And in the face of no plan provision, no regulation, no IRS Q&A, no promissory note provision, no absolutely anything beyond conjecture to suggest that source is as intrinsic to that investment as its interest rate (which is plainly stated in the legally binding promissory note)? That's really the position here, that somehow source is intrinsic to the loan. You can;t just say that it is without something written into something legal that makes it so (or a regulation that makes it so, or an IRS position). Yeah I don't think this is in the same category as botching the top-heavy issue on a 401(k) only plan. Not even close. And I would still like others to clarify that you can most definitely trade Fund A in 401k for an equal sum of Fund B in match. There has been ample suggestion in this thread that that is not possible, but again it implies that somehow source is intrinsic to an investment--it is not. I'd appreciate it if others would say so if you agree. This is just totally uncontreversial, but it is the foundation of my argument. I saw more than one suggestion that what I have suggested is impossible because the funds are somehow "stained" by their source.