MoJo

Just as an aside - we currently have a client under DOL audit where failure to timely cash out small balances is also an issue - and the agent wants the company to restore the fees taken from those balances - EVEN THOUGHT THE MANDATORY CASH OUT IRA PROVIDER WOULD HAVE CHARGED BOTH INVESTMENT LEVEL FEES AND A PER IRA CHARGE FAR IN EXCESS OF THAT WHICH THE PLAN DOES. In fact, almost half of the subject accounts would have been consumed by the IRA provider's fees by the time the audit is complete.... I file this under the penny wise, pound stupid category - and it applies to someone else's pennies.

Why the switch then? I agree with RBG about the level of their customer service. While not as stellar as it once was, it is still top notch among the vendors I deal with - and have dealt with. I haven't used their admin platform, but have used their docs and Form 5500 platforms - and both are pretty intuitive and easy to use.

Interesting question, but to be honest, a rather far-fetched one. In my experience, in "legal separation" cases, the court is only going to order what the parties have agreed to. In the jurisdictions I'm familiar with, a "separation agreement" needs to be filed at the time the "legal separation" petition is filed, and both parties need to "agree" to it again at the time of the final hearing - just as in the case of an uncontested or "no-fault" divorce. The court ordinarily won't order anything not agreed to. If there is a disagreement, it turns from a "legal separation" into a restraining order and possibly an order for spousal support, plus any child custody/support issues. Now, if after a legal separation is obtained a participant names the estranged spouse as beneficiary, the beneficiary designation is going to trump the separation agreement (which only would be operative to eliminate the need for spousal consent if the participant chose to name someone else - if that issue is even addressed in the order).

I concur. We see them occasionally, and I have one on my desk right now - where the husband and wife have "stipulated" to the issuance of a DRO despite not getting divorced, basically because he's doing 5 to 10 in the big house for embezzlement (which may be why they want the money assigned to her sooner rather than later - but that's another story....).

I have seen situations where in lieu of "put" on the assets (hold back) underlying assets are distributed - BUT in that case, participants have an immediate recognized LOSS, and when a new SVF is established, the "principal" amount would be the value of the assets so distributed, with a crediting rate established by the wrap provider on the basis of that principal amount. I actually had the reverse situation - where the market value was OVER book, for a separately managed (single plan) SVF. In attempting to move it and MAINTAIN the excess to provide for the same (higher) crediting rate, we were unable to find authority to do so, unable to convince the old provider to preserve the "structure" so as to maintain the gain, unable to find counsel who would bless the matter, and therefore unable to actually do what was planned. Assets transferred, a new SVF was created with a basis equal to the principal value of assets transferred, and a new crediting rate more in line with current expectation. In reality, from the participant's perspective it was a wash - x% on $y assets is the same as x%-z%age points on $y+the same increase in percentages - but the plan sponsor wanted to "advertise" the higher than normal crediting rate - which they "preserved."

Not to jump in FGC, but the "put" or hold back is an "insurance issue - and it doesn't matter if is an "insurance company" SVF or other (true) SVF. What makes the SVF "stable" is an insurance wrapper over various types of the underlying fund (usually a managed bond fund) - which can be a general account product, a separate account product, or a "trust" company based product with that wrap. Often the underlying fund is a managed bond portfolio and with the wrap is referred to as a "synthetic" GIC. I helped build one at a mutual fund company I once worked for. The bond portfolio managers ran the money, a trust company held the assets in a collective trust, and a number of insurance companies shared the wrap exposure - and called the shots on liquidity. One of the condition of the wrap is the ability to demand that liquidations from the the fund (usually plan sponsor directed, but I've seen participant level holds as well) be suspended for some period of time (usually 12 months, but on "unnamed" service provider has a SVF with a 10 year hold). Bottom line is "all" true SVF will have the potential for a hold back. If it doesn't, then it just isn't a "true" SVF.

NoT mentIoning Any providers by nAme, right?

Are you still in Ohio, and if so, where? I know of some attorney's doing domestic relations law in the state - but like most places, finding someone "local" to the court in question would be best.

We've taken the position that it is October 15th (to be deductible for the preceding year). Our research indicates that the reference to the destructibility of a contributions is "6 months" after the tax return due date. Nothing we have found hard codes the date to September 15th. The "CPA's" we've talked to agree. The same is true for entities that are taxed as partnership - which now have a September 15th deadline....

"Legally required" is a question that we believe is "irrelevant." The relief given says an amendment is required to "add" loans or hardship features - and presumably to specify that they may be given under the terms of the relief granted, and can be done retroactively under certain conditions. The relief does not say an amendment is not required to expand hardship criteria as provided in the announcement, hence one could argue that absent affirmatively indicating that an amendment is not required, it actually is required. That's an argument we choose not to engage in. We counsel clients that an amendment is the "appropriate" approach (whether for new hardship/loan provisions, or to expand existing criteria accordingly). Hardship criteria is a plan document specific issue (safe harbor, facts and circumstances, etc.) so why would an amendment be "problematic." It just makes sense, and better safe than sorry.

We're going to do amendments regardless - for any affected client who wants to expand the hardship criteria. We take the position that the document is gospel - and needs to reflect actual operation - and that the relief given, if taken, should be part of the permanent plan records. For us, that means doing an amendment.

I agree with Mike P. I would add that the CBA binds the employer. The plan document defines the plan. The two are different and the remedy for not incorporating the right provisions into the plan is to seek enforcement against the employer....

What he said....

It's not a failure to select funds wisely that poorly perform in the future. It wold be a fiduciary breach to not be cognizant and act accordingly to the poor performance (which may or may not include changing the fund). Being prudent means following a well defined and appropriate process. It does not mean being able to actually predict the future.

And that is the big "if...." I often am asked: "Is it worse to not have an IPS and "wing it" or to have an IPS and not follow it." My answer: It's not bad to be a fiduciary, it's just bad to be a bad fiduciary.....

That is a big "if" for many plan sponsors/fiduciaries... The problem is, the bigger the plan sponsor/plan, the more likely they actually have a process and an IPS (if not expert assistance), and the smaller the plan sponsor/plan, the less likely it is a target (not enough recovery to spend years in litigation).

That would be more of an employment agreement issue. It is common for physicians in a group to be charged with all expenses related to their benefits package. I've had the same concern that this may in fact make an otherwise employer contribution into a CODA with the inherent problems that flow from that, but I think if the employment agreement is appropriately written (BY AN ATTORNEY WHO KNOWS WHAT THEY ARE DOING), the employee/physicians "compensation" can be defined to be x minus y, where y is the costs associated with the benefits attributable to them. When too much "choice" is given to the physician is when you run into trouble (i.e. if the physician can "decline" a profit sharing contribution - then to me it looks like a CODA, smells like a CODA, and walks like a CODA ...).

Experience, yes, success no (really TBD). We are currently involved in two audits of our clients, where the DOL has taken a serious interest in our 408(b)(2)'s - but are approaching it from the perspective of why the plan sponsor didn't seek clarification and/or fire us - because they have some issues with the disclosure (and the national office has been involved). What specific issues are you involved in?

We had about 91.48% (NASA's interactive map...) in Indianapolis and it is amazing that we didn't experience any darkening of the sky whatsoever. Apparently 8.52% of the sun is more than sufficient to keep things bright. Some cloud cover - but between the clouds we got a pretty good view (through glasses, of course. I snapped some pics on my phone covering the lens with my "glasses" and since I zoomed in all the way, the pics were a little fuzzy, but it definitely showed the silhouette of the moon mostly over the sun...

It's just all in his head....

That is a crime. Inform the DOL and let them handle it.

Larry, are you "not practicing law" entirely correctly, IMHO....

The same is true for many, many "professions" and there is room for improvement. It is happening in some areas (nurse practitioners are now alternative for certain medical concerns - and they can prescribe, etc.). Lawyers are like other "professionals" in that they charge based on not only the hours they spend, but the risks they undertake in doing so. The paralegal at your closing may have not made that much, but the lawyer they worked for undertook risk in performing that service - and the fee is market driven. By the way, in many states a lawyer is not required for a real estate closing - and licensed" real estate agents can perform some of the "contract writing" etc. - with the title company doing the deed/title work. You do pay for our education - as I pay for doctor's education (which is why I get ticked off thinking about not having access to medical care when I was unemployed having spend decades supporting medical schools, doctors and other medical practitioners, universities, hospitals and drug companies - but I digress). The real reason is protection of society. Has it gotten "monopolistic"? Perhaps. But are you going to trust legalzoom to draft appropriate documents for *your* divorce/estate pan/multi-million dollar corporate merger/acquisition or other significant transaction? Probably not anymore than I would trust a bookeeper over CPA to hand a complex tax transaction....

Generally I would agree, but when it comes to "professional services" it just isn't the "litigant" or patient or client or whatever - it is also a burden on others when such things are done wrong. Unrepresented litigants consume an inordinate amount of taxpayer funded court time. I can't imagine the societal costs of having quacks practice medicine, or bookeepers practicing tax accounting, or as David points out above, the societal costs of an entire plan's worth of participants not having money for retirement because someone stayed at a Holiday Inn last night and engaged in actuarial science. It isn't just a matter of the "litigant, et.al." but of the problems and chaos that results from incompetence in professional services (or for that matter, untrained people in any service or trade).

The difference is, nobody in their right mind wants to engage in the unauthorized practice of actuarial science! It's all voodoo... Just kidding, of course - and you make a great point. The "unauthorized practice" principles extend to virtually all professions....