MoJo

What part of the Yukon do you live in?

Check the contract. It might say that a discontinuance of contributions might trigger the CDSC anyway....

We routinely get PDF's of DROs. We accept them *if* they have an indication of having been signed by a judge, and bear an indication of having been filed with the Clerk. If the copy/scan/etc. is ineligible, we do what you did and attempt to find it on-line. Unfortunately, not all jurisdictions are yet computerized to that extent, and in some of those that are, they don't publish for public consumption anything that contains financial information - including DRO's. In that case, we demand a hard copy or better scan that shows it was signed/filed.

I understand your logic - but as I indicated above, I think in almost all cases, the employer (through it's employees) is *still* going to be a fiduciary - maybe not THE Plan Administrator, but still a fiduciary, and as such, may still have liability. Plus all of the individuals actors who perform fiduciary functions (whether they know it or not) can claim the title as well... I disagree with the risk transference concept. The concept of co-fiduciary liability comes into play as well, and even if their is a "proper" delegation to a 3(16), many other factors come into play with respect to other fiduciaries, etc. I have yet to see a case where there was such a clear cut case of proper delegation (without interference) such that another fiduciary would be dismissed from a lawsuit. It may be that we haven't seen any "3(16) cases yet - but in my experience ... well let's just say, I wouldn't want to defend the plan sponsor in that situation.

I like your approach - but keep in mind a few things. First, even though the plan document can "name" an individual or entity as a fiduciary, it does NOT stop others from being a fiduciary by virtue of the functions they undertake. I'd be hard pressed to find a situation where employees and/or the employer are not, through such functions, also a fiduciary. As far as the value add that you and other 3(16)'s provide, I will raise the question that I have often raised on these discussions: Apart from the "work" you do, what is the value add to being a 3(16) fiduciary in doing so? We provide "paperless" loans without employer intervention. We provide hardship distributions (checklist based) without being a fiduciary and without employer intervention. We do the same for termination distributions. We handled DRO's form start to finish without being a fiduciary, and without employer intervention. So, where is the value add in doing such things as a fiduciary as opposed to doing them not as a fiduciary - which only in 0.01% of the time might involve talking to the employer when things just don't fit our checklists/process? And as far as "personal liability" is concerned - one of the first things I was taught in law school was to NEVER EVER rely on a judge to make the right decision. Set yourself up so the judge has no alternative but to rule in your favor (on whatever issue) knowing full well the other side is trying to do the same thing. The law says "personal liability." Assume that is the case and the judge will, if you fail to set a clear path, impose personal liability. I've seen it happen - and a couple of times a year, the DOL broadcasts cases where exactly that has happened.

We have seen the IRS be fairly generous i this area as well - BUT only when 1) the intent of hte plan sponsor is clear; 2) the actions of the plan sponsor are consistent with that intent; and 3) communications to employees are clear and consistent with the plan sponsor's intent. It's #3 that is often the problem - with automated document systems churning out SPDs and notices consistent with the plan documents but inconsistent with the intent of the plan sponsor.

I've seen this. The "counter" is to point out that in all likelihood, the person signing the 5500 is a fiduciary anyway, by virtue of function, and then to educate them on being a "good fiduciary." Someone once said "It's not bad to be a fiduciary, it's just bad to be a bad fiduciary." Besides, hiring a fiduciary is itself a fiduciary function and may expose you to co-fiduciary liability - or at least a duty to monitor....

I work for a different company than those you mention - but we have a very LARGE book of SMALL plans. We have no plans to undo that which we implemented to be compliant with the "Rule." There may be some changes, but throughout the process and the litigation, our stance has been it is the "right thing to do." In some cases we changed processes to not be a fiduciary, and in others we decided to become a fiduciary (our distribution/rollover people are licensed and fiduciaries).

The only two solutions we've seen are 1) open up a "limited" loan program in the buyer's plan solely for the purpose of allowing repayment of existing loans; or 2) have one of the entities "loan" money to the participants with loans to pay off those loans, and then pay back the entity outside of the plan (rarely happens - but I've seen it done - especially if it involves "talent" they want to keep happy).

This has nothing to do with "how one's religion works." It has everything to do with what the law might require another to do to accommodate someone else's religion. Quite simply - no one's religiosity can in any way, shape of form, obligate another another to take any specific affirmative action if that affirmative action materially affects the other. Religious freedom in the employment context simply means the employer must accommodate the exercise of religion by the person claiming to have that right - but it does NOT obligate the employer to take any other affirmative steps to make changes outside of the "personal performance" of the individuals religious practice. That is, an employer *might* have to accommodate prayer BY THE INDIVIDUAL, but nothing would compel the employer to shut down machinery so the individual can pray in silence - as may be required by the individual's religious beliefs. Nothing in RFRA type laws would require an employer to change the schedule of a time critical operation to make such an accommodation (e.g. if a smelting operation is pouring molten steel out of a blast furnace/ladle - the employer would NOT have to suspend those operation so that one of the necessary workers can perform a required religious ritual). Religious freedom does not compel such affirmative action when it comes to an employer having to do something that impacts the potential operation, if not qualification of a plan. It isn't "religious freedom" - it's coercion. If the person truly objects to being a passive participant - find another job. RFRA does not give one the ability to dictate "affirmative" actions" on the part of another, or to cause some other problem to the employer (and possibly the other employees).

Luke: Can you explain your apparent preference for an amendment as an accommodation? Truly it solves the problem of one or very few people who have a particular belief system - but the impact to the employer is: 1) they have to make a determination that the belief fits those protected under the appropriate RFRA type legislation (hey, I happen to subscribe to a sincerely held native american holistic religious doctrine that allows the use of peyote at my pleasure - but that doesn't mean my employer has to accommodate (and I am kidding here - but there is a real case on that point); 2) if enough people are excluded, you may have numbers/testing issue; and 3) why is "exclusion" a necessary accommodation (the mere fact that an account in the plan exists does NOT in any way interfere with the free exercise of any religion - only taking advantage of the benefit or the investments *might* - and the employee can refuse a distribution when available to "accommodate" that part of their belief structure). I still think less is more in these cases. Comply with the requirements (if it applies to an employer at all), but only minimally so as to comply - else you go down that slippery slope....

I think the provision you quote presumes that the employee in questions is an active participant AND has the right to direct their assets within the plan. Nothing says you must give them that right, and I would go even further and suggest nothing says accommodating ONE (or a handful) of those with specific religious beliefs that affect a plans investment operations is more important than the fiduciary obligation to select investments appropriate for the totality of participants.

I would agree that there may be "bigger" HR concerns, but I would *always* advise a client to *only* do that which is required by statute - whether it be a RFRA type act, or any other statute. To do *more* is *always* setting a precedent and inviting trouble in deciding that which is appropriate, in vastly variable circumstances. As far as the plan is concerned - one cannot make an employee "actively" participate, but an employee cannot prevent the employer from following the terms of the plan and setting up an account and funding it. I would *not* recommend an amendment to exclude the participant. That is going above and beyond and sets that precedent, with potential downstream consequences. Deal with the termination distribution when it occurs....

I couldn't agree more - and to tell the truth - we are seeing some clients weighing the risks (playing the audit lottery) of self-correcting loan issues vs. the costs of a VCP filing (including labor, hassle, etc.).... We'll see. All I can do is "advise" - they make the decisions.

I can't speak for how much time the IRS spends on small plan/issues vs. large plan/issues, but I can assure you I generally spend a lot more time in dealing with large plan issues and in preparing VCP filings for them, than I do for small plan issues and loan and RMD issues. The difference is in the amount of data that needs to be collected, analyzed, formatted and submitted. A small plan issue that affects 25 people is easier to document than a large plan issue that affects 2500 people - and either way, often the documentation we have to submit - and the IRS is ostensibly reviewing, is more voluminous, generally, for large plans. Just sayin....

I would agree that it most likely uses per stirpes.... It's been a while, but I have seen per-capita language - and boy does it create a brouhaha among the heirs (and the children of those who are still living....)

I respectfully somewhat disagree with Larry. Per stirpes and per-capita refer to what portion people of differeing generations take in the event one (or more) of the bene's of the first generation pre-deceases - in the case of retirement plan - the participant. You have "per stirpes" correct in allocation (each "lower generation" takes a share of what their parent would have taken had they not predeceased) - in that is there are two children, one of whom pre-deceased leaving three children of their own (grandchildren of the participant), then you "split" the account first at the level of the children, and the grandchildren share only their deceased parent's share. This, in my experience, is the most common approach. Per capita simply means you add up the total number of bene's who will take, and split it evenly among them. In my above example, there is one surviving child and three surviving grandchildren (for a total of four bene's), so each would get a one-fourth share of the benefit. In either "per stirpes" or "per capita" the children of predeceased bene's would get a share - the difference being in the amount each would get. To "only" benefit one generation, the language would be something like "to my two children in equal shares, but in the even one of them predeceases me, then the entire balance of my account would go my surviving child" - and for good measure, I'd add in "and I specifically make no provisions for my grandchildren who are issue of any child of mine who predeceases me." That effectively keeps the money at one generational level.

Having a bank gets you part way there. Finding a service provider is the rest of the equation. As I indicated above, we "politely" decline to bid on such business. We aren't sure what the regulatory issues are to us as a financial service provider, and therefore take a pass.

Well, to directly answer your question, then, "No." I haven't seen anyone allow a later cut off.time. I have seen some rk shops use an earlier time (but I believe they may not have been operating as a sub-t/a and hence had to get orders to the t/a or sub-t/a by 4:00), but not recently. I think the answer may lie in how "listed" securities are priced - and the time at which the price is fixed - for purposes of determining the NAV f the RIC. After a very cursory google search it appears the "other" exchanges "close" at 4:00 ET (or the NYSE close time) and only conduct business after that time as an "after-hours" exchange. Where the rules on NAV calculation, and whether there is a rule that the price as of the close of the NYSE is the price to be used, I couldn't tell you.

Any order taken after the close of the NYSE (whenever that is - and it may be earlier than 4:00 p.m. EST) cannot be processed with that day's NAV - and would be considered an order for the next business day. I believe that may be a regulatory (if not legislative) mandate - as it would give the astute investor the ability to sell or buy based on after market close information and still get the fixed price established (though not necessarily calculated) as of the close. My experience is that recordkeepers and other intermediaries operate as "sub-transfer" agents to the fund's transfer agent and are strictly required to adhere to the timing standards by the transfer agent/mutual fund/SEC.

True. I mean we don't even have to talk to people anymore! (just kidding). It has made researching and sharing of ideas so much easier. If we could only solve the problem of (conflicting) information overload......

I bow down in admiration - and hope I am not around as long as you! And where were you when I needed some pre-ERISA expertise for an abandoned plan I was working on?????

No discretion is involved. We adhere strictly to predetermined criteria (the "policies") and function in a ministerial manner. Nothing you listed requires "discretion" to complete. Once in a great while, the employer *may* have to get involved - but generally isn't required. The only case I can recall last year involved a hardship for medical expenses where the supporting documentation (the invoices) were all marked "paid." That, under our system causes a reject - and while we worked with the participant to "trace" funds to determine if the "payments" would make the cut (with an uncooperative participant), the employer stepped in and "ruled" it to be a hardship. The participant also was an exec (and an HCE) at the company - so they did so against our advice. But that's the only instance for the entire year where an employer got involved in any of our outsourced services - and we currently have about 5500 plans. Can't say how many of them use our outsourced services (it's an ala carte menu they can select from) I can assure you ALL of them use loan outsourcing (if they have loans) and most for distribution outsourcing (including in-service of all types). Over 500 engage us for QDRO services. About 5200 of them use our volume submitter document(s). Payroll, census collection, all of that is 360 integrated. I hate to tell you this, but I've worked for a number of service providers in my 30+ year career, and even as far back as the early 2000's most of this suite of services have been available - without anyone every saying "3(16)."

We do the same thing. We do the same thing. We do the same thing. We do the same thing. We do the same thing. We do the same thing. We do the same thing. We do the same thing. And when I say the only thing we need from the employer is the "initial authorization" - that is basically the same as the contract your clients sign for you to provide the services. It's a one time, at the beginning of the relationship document that authorizes us to do these things on their behalf pursuant to the various "policies" that often are part of hte plan documents (that we also provide) - i.e. the "loan policy," the "hardship policy", the QDRO policy." The only difference is we call it the standard offerings of a "bundled service provider" and you call it 3(16) services. My question still stands....

I can think of a few reasons. Generally It still may be subject to the a variety of anti-alienation provisions not required under ERISA. It may be subject to state based exemptions from claims of creditors (as many states do with IRAs) or there may be many other state (or even federal) exemptions against such things. The problem is, each scenario in each state must be evaluated to see if, when, and how a court could order such things - so a blanket "they can" or "they can't" will never be the right answer.