austin3515

I think I have a best possible solution. Not perfect, but ok and certainly better than what I'm getting today. In paragraph e. (which is ____months of elapsed time) we enter the following exactly: “90 days of service –approximately 2 (two)” Then the SPD and the AA both say “60 days of service – approximately 2 (two) months of service” and the failsafe eligibility language won’t display. I think that will work... Like I said not perfect, but good enough.

They said too bad so sad edit the spd in Word(non starter because we will never be able to edit every time we do a new amendment). Very disappointing. Tons of clients use days instead of months. No, the fail safe would never apply but the client is annoyed because the sentence makes no sense in the context. It’s literally the next sentence after “you’re eligible after 60 days.” Super disappointing.

We're asking them too 👍

We use FT Williams for plan documents (new to us) and we have a client who uses 60 days of service and not two months. We cannot find a good way to fit that in the document. IF we use the "Other" field, FT automatically includes the failsafe eligibiility language. It also does not give us the opportunity to elect Elapsed Time for eligibility. It seems as though the only way of electing elapsed time is to use something already hardcoded for months. And this employer has had the 60 days eligibility for 1,000+ employees for years so, no, they will not change to 2 months 🤣 Any suggestions appreciated!

The FT William pre-approved document allows us to select whether the Investment Fiduciary will be if not the Trustee. Has anyone ever seen this used to name someone other than the Trustee (my plan does not have a directed trustee). It looks like the default investment fiduciary is the plan sponsor. That doesn;t seem normal though because the norm is for the trustee to sign off on investment changes for example.

Oh well sure if there is someone who doesn't know what they are doing you can get into trouble. What I find shocking is that lawyers who do mergers and acquisitions for a living will frequently just ignore this topic altogether. I get it, there are a lot of moving pieces but bring in an ERISA attorney to focus on this (I mean if there isn't a solid TPA of course!).

For what? This is a stock sale, the have the 410b6C transition, and the entity has not yet adopted the Plan?

I guess our experiences are quite different. In my world, the acquired entity is rarely able to participate immediately in buyers plan. Often times the employees are told of the acquisition immediately prior to the acquisition (doesn't leave much time to enroll and make investment elections, even if the RK was able to get that new entity set up in time). And the administrative hurdles of adding new entities as participating employers means generally a month is lighting speed to get them onboarded (Census data, notices, banking info). These things take time in my world and only rarely take place immediately after the acquisition (Even if the sellers plan is terminated). And I am familiar with puts and 5 annual installments and the like, and I understand all of that. But this is an eye opener that literally no one sees what I am doing as the least bit productive or helpful. I'll do some more research.

I can't figure out where we are all getting out of line here. We all agree that the merger agreement controls. I am writing the merger agreement. For our documents, you just enter the merger effective date in the participating employer agreement (Corbel Prototype). What I am asking about is language in the effective date for the merger agreement and whether I can just say "coincident with receipt of the wire transfer." Everything you guys are saying I agree with. I definitely think it is me who is missing something here...

Is the bottom line here, what I want to do makes no sense? That's the message I am getting. If this makes no sense I'd be curious to here why this approach makes no sense. It doesn;t sound unreasonable to me.

Well if the main transfer of assets hits on 9/15/2025, then my merger effective date based on the language I proposed above would be 9/15/2025, and the residual "income" would belong to the surviving plan.

More typically in my experience, Parent buys Child. Child begins participating Parent's plan on 1/1/2026 (for example). Child's plan merges over a few months later (after a short cooling off period and blackout notices etc). Obviously the possibilities are endless but this seems to be the fact pattern I keep running into. For the reasons I explained above I tend not to have a merger effective date of 1/1/2026. But perhaps that is where we are differing. Probably you guys are merging the plans in on the same date Child begins participating in parent's plan (1/1/2026 in my example). I am treating the merger as a different event on a different date.

Just to clarify what does AA/PA stand for?

But I also agree with David Rigby? I am trying to have the merger agreements coincide with the asset transfer? I see a lot of merit to that approach. Perhaps I am on an island alone in that belief, but I am just trying to have the merger effective date coincide with the movement assets. So my question is does my proposed language meet that objective? Maybe there is something I am missing here, but what you guys are saying I agree with 100%.

It is relevant from an administrative perspective. I want Merging Plan;s 5500 to be based on Merging Plan's trust/custodian reporting. I want Surviving Plan's 5500 to be based on Surviving Plan's trust/custodian reporting. The merits of that approach can be debated but what is beyond dispute is that I prefer it this way, LOL. For starters, iff Surviving Plan is audited, the auditors probbly do not have to worry as much about that stub period since it will not be included in their financial statements (Reviewing SOC1s as an example, testing distributions for another).

A lot of participation agreements include a space for you to enter the merger effective date of a participating employer's plan (e.g. in the event of the acquisition of another entity's stock and the merger of their plan into the main plan). The challenge that is always there is we don't necessarily know exactly when the assets are moving (at least not in time to execute relevant documents). My preference has always been to have the merger effective date be coincident with the transfer of assets to simplify reporting and to not commingle the plans with 2 recordkeepers. Would an effective date of "Coincident with the transfer of assets from the trustee or custodian of the ABC 401(k) Plan, which is expected to take place on or about September 15, 2025." be sufficient?

For sure if that happened to me I would also let it lapse. Perhaps now that the IRS has been DOGE'ed that won;t happen...

I absolutely track my CPE but it is self-reporting the total number of credits in the cycle. Are they really expending a lot of entry reviewing the 300 of us who still have it? Seems like it would be a ridiculous waste of resources. [I am sure it is more than 300 but I assume not by much since they closed it off to new applicants.]

Great tip! I'll definitely sign up for these!

No, I used to work for a TPA but not anymore...

This one seems like a nice option. $199 a year. Not a ton of courses but I assume it gets refreshed. https://my-cpe.com/continuing-education/erpa

I of course know about the ERISApedia and JH free webinars. I need more than I've been able to get through that. I do try and do the ASPPA spring/winter virtuals as well. Any other suggestions out there? I need this for ERPA designation.

NoT to change topics but for a time I was asking clients for 125 premiums to reduce comp when calculating contributions. But I knew no one else was doing it. And someone pointed out the irs doesn’t even mention this in publication 560. This feels so much like that, where being a literalist leads to ridiculous outcomes (that is people who sign up for medical benefits get penalized, more so if they cover their family).

But that’s ridiculous to say that the plan is the provider. I know there is a thing about this but this cannot be something that gets enforced even if true. The outcomes are preposterous. Someone is in some junky 2.5% variable annuity and the sponsor is stuck. It defies all logic…

Provider is telling us that we cannot change the investment provider mid-year. So for example, let’s assume it is February and the pan sponsor wants to move from Fidelity to Charles Schwab (neither Fidelity nor Schwab are involved here they are just an example). We are being told nope not an option you can’t leave us until January 1 next year. I believe it has something to do maybe with form 5305. Even if there is something that is technically true about this it just seems bizarre that a sponsor would be hamstrung from making a change for better pricing / service because of a technicality. Have others heard of this? Are they being too literal or risk averse? This would basically mean the sales process for SIMPLEs is shut down for the first 7 or 8 months of the year…