MoJo

In a word - "YES." Plans have to be in operational compliance - and that means decisions should have already been made. The amendment only records that which has already happened.... And BTW, as a service provider - we've tracked those decisions for them (at least those that responded to our inquiries).

The fallacy in the scenario you posit is that when the dollar becomes worthless, you assume that society still functions - with functioning infrastructure. If the dollar truly becomes worthless, who's going to keep the lights on? How are people going to access their crypto wallets - all of which requires a functioning society. People can indeed live without electricity - and can indeed engage in limited commerce without electricity (using "hard assets and barter) but by definition, crypto requires electricity and an internet - and in the Mad Max scenario, while there may be some with some access, the majority will in fact lose that access - and that is the "bend over and kiss ..." scenario. And yes - the dollar's value is perception based, but the "full faith and credit" scenario create a guaranteed perception of value. The only situation in which that value goes to zero is the complete breakdown of government, which is the complete breakdown of commerce beyond that which is local. Placing faith in BTC to be your savior in that scenario is basically laughable.

And that is what others will use in competing against Fidelity.... ☺️ (and anyone who declares themselves to be "smart", isn't)....

I would agree that this may be their "motivation" but I still have issues with the model. *IF* fiat currencies lose value and hyper inflation results, then what value are your holdings of crypto? WHO can buy them/what goods or service providers will accept them? Crypto is wholly dependent on the purchaser's perception of value. Not in any real value - which means that while the theoretical price of the crypto may go up/exceed inflation, you still have to find someone to accept it, or buy it to render it into a useable currency. I own a few rentals (small time landlord) and recently redrafted my lease to ensure rents are payable *only* in U.S. dollars. Between the time someone pays me in BTC and the time I can spend it, it may lose (or gain) a sizeable percentage, the "wallet company may be breached, and locust may invade my space.... If the US dollar becomes worthless due to hyper inflation, bend over, kiss your a$$ goodbye, and .... Nothing will function - and BTC won't solve that (hell, without the US dollar, utilities will shutter and you won't even be able to get to your BTC). At least with gold, you can barter....

Very interesting topic and comments - but I think the discussion is somewhat off the real issue here. The fundamental problem is "what is Bitcoin and other cryptos?" I really hesitate to call it an asset as it has no, nada, zip, zilch intrinsic value. It is a computer record that is more of a medium for the exchange of wealth between buyers and sellers. Standing alone, it isn't a "productive" investment. One could argue that dollars have no intrinsic value as well - but dollars are backed by the full faith and credit of U.S. government (and we can discuss how much that is worth - but it is worth more than cryptos - which lack any backing whatsoever.) Add to that, it is an unregulated investment, unlike other investments (even scarily volatile/risky and other "V3" types of investments commonly called derivatives, or some options, commodities and the like). EVERYTHING ELSE that is an "investment" is regulated by some entity - in order to ensure minimally sufficient information is available for investors to make informed choices, and to ensure the integrity of the platforms on which the investments are traded. NO SO FOR CRYPTO. The fundamental problem here, is that people are arguing that a "prudent fiduciary" should be able to evaluate an unlimited universe of potential options (and select some of them prudently, of course), and that in order for some to speculate (and there is no other word for an investment in crypto) on something unregulated, without intrinsic value, and not productive (in the sense that it's value is pegged to its ability make money through some business operation) to allow something for which there is no information on how the thing is priced, traded, secured, or even subject to the jurisdiction of U.S. Courts (an ERISA requirement). I see no criteria that would allow a fiduciary to even evaluate this as a plan investment, let alone conclude that it was a "prudent" investment. Past performance is not indicative of future performance" is applicable here. It went up! It must be good. It also went down - and no one knows why it goes up and down.... No way to evaluate trader sentiment which seems to be the only driver of it's price. If people want to participate in the frenzy that is crypto - well, do it outside the plan where prudence considerations are personal, and not plan wide, or invest through an ETF that invests in crypto and crypto related assets (which are regulated and recognized as investments), or invest in companies that develop, promote or provide platforms for the trading of crypto. That said, the underlying technology of blockchain is a technology that has intrinsic value as it's uses are vastly more varied (and important) than just providing a foundation for cryptocurrencies. THAT may be worth investing in - and may be a prudent choice. Keep in mind that Fidelity is fundamentally a marketing company. They jumped on the bandwagon by developing a product to allow for trading in crypto on their DC plan platform. They got press. They are entitled to build their platform as they see fit - without fiduciary ramifications - just as my employer (whom I refer to as a "non-discretionary directed ministerial service provider" (aka not a fiduciary...) can build it's platform as it sees fit (without - for now - crypto - or even allowing for cannabis companies as clients (again, for now). I expect that Fidelity will get only a handful of niche clients who opt for crypto in their plan. Nonetheless, they got press for being an innovative company - forward thinking. And that is probably their ultimate goal/win by doing this. Congress' inquiry here is essential. Not so much as to regulate fiduciaries - but to understand the fiduciary implications, and then possibly legislate a regulatory scheme that protects crypto investors - not so much from the speculative nature of the investment, but from the lack of transparency, and security surrounding the trading of crypto.

I don't see the appeals process taking precedence over the AP's right to benefits under a QDRO. Once the DRO is adjudged a QDRO, the amount payable under the QDRO is no longer a benefit payable to the participant, and that is *not* something that the plan's appeal's process has jurisdiction over. As I said, if s/he has an issue with the DRO, the proper course of action is through the court/agency that issued the order.

Whether the DRO is a QDRO is a question for the administrator - provided it is entered into by a court (or other entity) with jurisdiction. It, IMHO, is totally irrelevant what the participant thinks. If the PA has made the appropriate determination, I see no reason to place a hold on the AP's claim for plan assets. Pay the PA, and deal with what is left for the participant to lay claim to. If the participant is unhappy - they need to go back to the issuer of the DRO....

I'll state a position - based on Peter's excellent analysis. *IF* you are a fiduciary in any capacity, *and* you reasonably believe something is amiss, *unless* you do that which is necessary and reasonable to remedy the situation, *YOU* are liable under the application of co-fiduciary liability. Resigning is not enough. When the DOL comes a calling (and someday some participant will make the call, they will inquire of you for record, probably via a subpoena, and when they discover that you function in any capacity as a fiduciary, you have a problem. What you posted here is probably discoverable by the DOL should they investigate.... Heck, we're a "non-discretionary, directed, ministerial service provider" (say that fast three times!) and the DOL routinely is trying to hold us responsible for missing contributions....

My point is it wasn't just the market being down. That's what caused the pain - but keying RMDs to "regular" market volatility is anathema to the concept of an RMD. When the market is exceptionally volatile due to some other factors (a pandemic, a severe recession, etc.) then Congress has sought to provide relief. For now, we aren't in a recession (yet), the pandemic is mostly behind us (and not the root cause of the market turmoil), and what's the point (from a legislative policy perspective) - and winning reelection is really a "chicksh!t" reason and not really valid policy?

I doubt it. The market being down hasn't ever, to my recollection, a valid reason to suspend RMDs. We had pandemic (where market was down, but we also have massive unemployment which was a double whammy. Previously, severe recession might have been used to justify a suspension. I have an IIRA - and took my RMD in January (as I always do. No pain for me....

Still, it's a fiduciary decision as to how to proceed.

Given a potential dispute, as a non-discretionary ministerial service provider, we would refer the matter back to the plan sponsor - who is generally still a fiduciary. What is on the contract with the recordkeeper is irrelevant, when the parties know that there is a potential issue (not saying there is, but we would *NOT* make the call when the trustees are no longer employed (especially under "acrimonious" circumstances)). Leave the decision to a *fiduciary*. And, if the trustees engaged in malfeasance with respect to the plan, their balances can actually be attached to make the plan whole. Have a situation like that right now - where the former CEO/plan fiduciary of the former company (it did not survive) did not deposit money into the plan from salary deferrals (and otherwise "allegedly" embezzled from the company. Can't help the company, but there may be a recovery for the plan (and the DOL is involved).

I'm not sure anything "authoritative" is out there on negative elections (I've looked) - it's more the sum total of lots of experience and cobbling together a bunch of other rules to surmise the conclusion. Start with for years we struggled with auto enroll plans until codified in PPA. They'd be better off just auto-enrolling all new hires (including those from the asset purchase) at a set amount. We know that works. Fooling around with negative elections is a recipe for one disgruntled new employee to call the IRS/DOL and trigger more unhappiness....

Allowed? I'm not going to opine on that because legal or not, I think it is a bad practice. Start with, rarely, if ever, are plans "identical" - which means participants really aren't making "informed decisions" about their deferrals - let alone investments (even if a QDIA is used, the specific QDIA may be a factor in a participant's decision to participate or not, and to what level. We've had clients who wanted to do that, and even suggested a "negative election" approach (i.e., unless you tell us otherwise, we're going to enroll you in the plan at your deferral rate in your prior employer's plan/ I like that less (as I read the regs, a deferral, other than an ACA, must be an affirmative election). Tell the acquirer that tis is a great opportunity to impress their new employees with the benefits of the new employer's plan, probably other benefits as well, and could be a good introduction to the company.

Bottom line: Were they paid for 12/31? If so, they were employed on that day.

Often, and with extreme pleasure, I've told creditors to pound salt when attempting to claim assets in a retirement plan to satisfy a debt - either pre-death or post. I've even enlightened a creditor on their ability to actually file an estate when no one else would (particularly for my Stepfather, who through astute estate planning died with no assets other than retirement plan assets, but leaving a $4k credit card debt). They insisted that we open an estate, and I told them if I did, I'd get paid long before they would, and since there were no assets, I wasn't going to do it (and they declined). I even once refused to turn money over to the IRS when a deadbeat taxpayer owed money. The rules are clear. even the IRS can't get to the money until distributable. They threatened me personally, then denied it, then hung up and left me alone after I offered to play them the recoding of the threat (being in a "single party consent state" I never talk to an antagonistic regulator without recording the conversation). Beating up on creditors attempting to grab plan assets is one of the small pleasures I get in my job.

There are specific requirements as to what needs to be included in the filing. While it doesn't *need* to be in the DOL's suggested format, they do provide a fillable .pdf form that essentially forces you to include the appropriate information. They also have a "checklist" that needs to be completed and I believe filed as well. See here for an overview: https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/enforcement/oe-manual/voluntary-fiduciary-correction-program and here, for the model application form and checklist: https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/correction-programs/vfcp/model-application-form BTW, the DOL does not consider the breach to be cured without a VFCP filing (though many disagree). It's a no-cost filing and give you an insurance policy in the form of a no-action letter. There also is a Form 5330/excise tax payable that needs to be done - but the DOL provides a class exemption from the PT if you calculate the excise tax, and instead of remitting it to the IRS it's deposited into the plan (with some notice requirements, etc. See here: https://www.federalregister.gov/documents/2006/04/19/06-3675/amendment-to-prohibited-transaction-exemption-2002-51-pte-2002-51-to-permit-certain-transactions Good luck!

Part of the problem is that a trustee (or other fiduciary) remains a trustee (or fiduciary) until a successor takes over. So, if you have one trustee (or other fiduciary), who ceases to be an employee and that severs their responsibilities under the governing documents, they by "operation of law" must continue until someone else takes over. I'm dealing with that issue right now. The Plan Administrator (allegedly) embezzled from the company and the plan, the company shut down (no formal bankruptcy), the DOL is criminally investigated, the DOL is responding to participant inquiries, and we, as a "non-discretionary, directed, ministerial" service provider (recordkeeper) have no authority to act on any participant distribution requests. The "ex" CEO (PA) disclaims any further responsibility, and no one else is willing to step up to the plate. All we can do is give participants the phone number for the DOL regional office. At some point, it may meet the definition of an abandoned plan, but ....

I'd go with dismissed 5% (and stay dismissed), settled 93% (including those that settled post judgement/appeal), and resolved via judgment (that sticks) 2% (and I'm overstating this probably).

I think it's hard to generalize here - because the services of TPAs vary widely. For example, we work with TPAs (in addition to our bundled offering), and in most cases, those TPAs don't "handle" any of the client's data. All data comes directly to us from the plan sponsor, and then the TPA accesses that data via a portal to do what they do. It's on us to secure the data, and the portal is via a secure link. Not sure what would be audited. Other TPAs do handle the data more directly for various services (I used to work for a TPA that had it's own web portal for participants to do various things - like request distributions, change deferrals, etc and then they passed the data off to the recordkeeper). I'm sure there are some that have cybersecurity assurance audits, but perhaps the better question(s) are should they, and under what circumstance would that be appropriate/required (given the current data security environment).

First, it's one of the "recommendations" - not a requirement (although DOL recommendations should be taken seriously by fiduciaries) and yes, we do (as a bundled/unbundled recordkeeper). There is a "NIST" standard, and those who conduct risk audits based on that standard. We also have a SOC-2 audit....

My take on this is that it probably is a PPT. The reason being, that while 6 our of 85 is below the IRS' *rule of thumb* of 20%, it is, in fact, 100% of the employees for the *company sold.* I've seen the IRS apply the total number of employees in the company/division/office sold/transferred/shut down as the denominator for purposes of determining whether the PPT occurred (which, unless some of those ee's are transferred elsewhere within the original employing organization) often exceeds the rule of thumb 20%. And I agree - it's probably the right thing to do anyway. I wouldn't recommend continuing to vest these people based on service with the buyer - requires an ongoing close relationship that most companies don't want to get involved with.

I don't think the issue is one of waiting to amend - but rather having notice in the hands of participants at least 30 days prior to the effective date of the amendment....

Well, it is an operational error - so EPCRS controls - but it isn't specifically authorized as SCP correctable. So, no, I can't disprove the negative here. The question is where is there authority to "retroactively adopt" a plan containing retroactive salary deferrals. Check out some the webinars from Derrin Watson and Ilene Ferenczy (and her website - I think she's commented on this as well).

It is a benefits claim - and based on the OP, the participant is unwilling to accept that the plan controls. Benefits consultants at the DOL specifically address these kinds of issues - all the time, and act as ombudsmen between participants/plan sponsors/service providers. That is their job. - BTW, DOL benefit consultants are *not* investigators (though they can refer a matter to an investigator if warranted). We routinely refer participants to them when a participant (usually a former employee or possibly an alternate payee) when they have issues, where the plan sponsor doesn't do what they want (but does do what they need - which is comply with the law/plan).