MoJo

Give them the number of the regional office of the DOL with jurisdiction over the plan, tell them to contact a DOL benefits advisor if they believe they are being wronged by the plan, and let them deal with the participant. The "weight" of the DOL in finding that they are not being wronged can be persuasive at times....

Our position is you can retroactively amend a plan (under specified conditions) but that you can't retroactively "adopt" a plan = which is what you would be doing with respect to the participating employers. We think this needs a VCP filing to approve.

We don't (normally) - but do offer prep of the 5330. The reason we don't do VFCP filings is it really requires the plan sponsor to compile a lot of information - and write a narrative (as a fiduciary) - and once they do that, what's the point of us charging them to type it in. Our RM's of course, disagree and keep trying to get my team to do them (without charging clients, of course)....

I guess we can forgive you for being a relative newbie - but the DOL's insistence on a VFCP filing - as known by for those with more experience - goes back a good decade or more. If that was meant as a political statement, then you clearly are in the wrong place....

Separate issues. The 5330 "reports" and collects the excise tax for the prohibited transaction involved in not segregating plan assets from the employer's. The VFCP reports, and at least in the DOL's eyes, and is necessary to fully correct the fiduciary breach inherent in not abiding by the exclusive benefit rule. One would think that by making participant's whole, the breach is cured, but the DOL "insists" on confessing your sins to be fully exonerated.

Dave: It's quite simple. Reading what's posted, and selectively responding keeps me grounded with reality in the industry. We tend to get isolated in what we do specifically, exactly how we do it (especially when stuck with legacy processes and solutions that haven't been challenged in a long time), and what our problems of the day entail. Reading here, 1) I see more of what goes on in the industry - and learn from it, and often can focus my attention on how to achieve that - or avoid it, without having to go through trial and error; and 2) I see alternatives that may be available to resolve the issues I have to deal with. This place also allows me to "flex" my academic muscle and explore things that maybe have never occurred in my career, play with hypotheticals, or hypothetical extensions of real issues, and often "debate" with others who have different experiences, perceptions and approaches to the same issues. I learn. I teach. I explore. Makes me a better professional.

You're getting ridiculously nit-picky. They don't need detailed results and I'd tell them that. It's irrelevant that there are tax consequences to them. Life is full of tax consequences. Give them the adp/acp test ratios, and a phone number for Congress. Whiny HCE's should/need to focus on big pictures and the piddly tax consequences of a refund show me they are lacking in common sense. A simple explanation and tell them to get back to work is all I'd give them (and if they push, I would remember the conversation next time they are up for a raise).

I'm saying companies pay people for being smart. Figure it out. Ask specific questions other than "prove it." LEARN SOMETHING. Ask what the test results were. Try to calculate it yourself. Even then, even if its a $10,000 refund - don't spend a heck of a lot of time on iit - being unproductive while I'm paying you six figures. And then, suggest to the plan sponsor alternative plan designs (safe harbor), or putting a cap on HCE deferrals (which a smart person should have thought about as well before deferrals). Just saying - be productive rather than being whiny.....

If I were the employer, I'd tell them that the reason they are getting a refund is because they are getting paid a LOT - and to start behaving like someone worth that much money.

If merged (or even if not merged, but sub's employee's participate in the "parent's" plan) and if it's not a controlled group - can't tell without knowing more about the owners - then it's a MEP, with all of the attendant issues around administering a MEP. It'd be a closed MEP - but still a MEP. Check with the recordkeeper about their capabilities to handle one....

Here's the relevant parts of one a client of our received last November: 32. Plan’s (and/or any entity with access to plan assets and data) cybersecurity breach response plan (or disaster recovery plan if it addresses a potential cybersecurity breach). 33. Schedule of systems critical to the maintenance and protection of Plan participant data and assets. Provide information sufficient to: a. Describe the critical data used by the Plan (i.e., Payroll records; Elections and beneficiary forms; Electronic personnel records; Plan data maintained in house or with custodians, etc.) b. Identify where the data resides. c. Show which systems (and data) are outsourced to service providers (e.g. cloud email). d. Describe any spreadsheets that are used as critical systems (e.g. census data). e. Describe file sharing systems (e.g., shared folders on a network). f. Describe how email is used to administer the Plan. 34. For each system identified in the schedule requested in request #32, provide information sufficient to describe: a. Access controls (e.g., who has administrator privileges to the email server?) b. Physical controls over key systems (e.g., locked server room). c. Third-party vendors providing outsourced systems and oversight (e.g., cloud provider). 35. If applicable, for internally developed systems, copies of system development lifecycle controls required by the organization. 36. Documents showing any communications or reports related to cybersecurity events, cybersecurity breaches, unauthorized access, or suspicious activity (i.e. participant benefit inquiries, participant complaints, internal or external communications with company staff and vendors), including documentation showing potential losses to Plan assets as a result of the cybersecurity events. 37. To the extent not produced in response to the requests above, provide all documents constituting or reflecting the Plan’s processes for the encryption of sensitive data, stored and in transit.

(In the past) some thought this type of arrangement *was* the ultimate 404(c) compliant plan. Wide open investment options, daily (and even intra-day) trading, and all the information in the world provided by the brokerage house. I never bought into that scenario, and the DOL has subsequently indicated that a "core lineup" was necessary as a fiduciary responsibility, as many (most, in my experience) are clueless on how to invest. So, not only is this arrangement *not* 404(c) compliant, it may actually be a breach of the plan administrator's fiduciary obligations.

This is normally when I provide my checking account number and vow to hold the money..... ☺️ I agree with Bill. If the plan provides for a benefit for her, but she is unwilling to accept responsibility for it's management, it's up to a plan fiduciary to do so. BTW, I'm not sure the "everyone is trustee of their own account" would survive if challenged. The plan administrator may not be able to "properly delegate" that responsibility - especially if the participant refuses, and can't make the contribution contingent upon their doing so....

I believe we used to call these "excess benefit plans" and were used when participants hit a plan or regulatory limits. Haven't seen one in years, as the limits have increased to or beyond the ability of non-Top Hat group members capabilities....

Most of our clients use our documents and we use DocuSign for signatures - which provides no opportunity to backdate the time of signature. If a client can't or won't use DocuSign, we accept printed, wet-signed documents, but won't accept anything obviously backdated. We do have clients using individually drafted documents - but in those cases, their attorney is the drafter, and handles amendments - and we operate in the mode of a nondiscretionary, directed, ministerial service provider and accept what is given to us (although we may question certain things. Our biggest problem is for takeover business, where we notice a missing amendment or other documents, and we direct them to their prior service provider to fix - and miraculously, they appear (apparently found behind a filing cabinet somewhere). Again, unless it clearly has a "prepared" date somewhere with a signature date that predates the date it was prepared, it'll be accepted (see no evil, hear no evil...)

While the advice here is good (we'd reject for the reasons stated), my guess is that this wasn't lazy, but rather intentional on the part of the participant's attorney - who is waiting for "Mr. Green" to arrive. In other words, the participant needs to pay their lawyer and the only pool of money may be the plan.....

Understood - that that might be the way to properly do what needs to be done, but the lawyer in me cringes when it is suggested that one "trash" the "evidence" or an already completed "fraud." The problem here is that you never truly can trash completely something - which will exist in numerous systems and electronic vehicles forever - especially if a service provider actually implemented a change based on backdated amendment. Will they get caught? Probably not. But if they do, it becomes a "conspiracy" with heightened potential penalties.

Keep in mind that "backdating" the signature is fraud. Retroactive amendments are allowed under some circumstances as provided in EPCRS (but such a retroactive amendment would have a "current date" signature).

You raise a really good question. Unfortunately, what the client did was fraud - plain and simple. Two schools of though on this. 1) Since it was fraudulent, it was of no effect whatsoever, and should be "ignored." The problem is, how does one ignore a documented issue? 2) Do as you suggest and "rescind" that amendment - but I'm not sure another amendment is necessarily the way to go. It basically codifies for all time the fraud that occurred. Clearly, documenting that the amendment was not a legitimate amendment to the plan would be advisable - but I would lean slightly in favor of documentation outside of the plan, that indicates why the amendment is of no effect, and then, as you say, correct the issue appropriately through EPCRS.

Sorry to hear that. Not sure when you worked there, or in what area, but a lot has changed in the 5+ years I've been there. Been great for me!

David: Thanks for reiterating that. Our experience - as reported by our CEO - is that "claims" for life insurance death benefits for the working population (i.e. "group life benefits, and individual policy claims for working people) are up 40% - and the causes of death for the increase are "largely" COVID related (and that is based on a review of death certificates and other material provided in the claims process.) Keep in mind "COVID related" also does not necessarily mean caused by COVID - but that COVID may have been a contributing factor) In the U.S., about 2.5 million people die each year - but most are the elderly, not working anymore. The number of working age people who die each year from all causes is considerably smaller, and hence a 40% increase in claims for that population is commensurately smaller as an absolute as well.

Scott has AUL numbers at his finger tips, and hence that is reliable - as far as I'm concerned (and OneAmerica is very forthcoming about financials with associates). As far as industry wide information, it isn't something that may yet be publicly reported - but, as I've said, Scott is well connected, and he's commented several times that our experience is shared among others in the industry. Wait till the companies report - they all have to - although it may be hard to find since it's almost all state based reporting. And yes, we do have the best LTC policy in the business (and I bought it myself!)

He's actually CEO of OneAmerica, the holding company of American United Life Insurance Company. He said death "claims" were up 40% for those in the insured working population (under 65). It's based on OneAmerica's group and individual life insurance businesses, and as the current chair of ACLI (American Counsel of Life Insurers), Scott has a handle on what others have experienced as well. Full disclosure - I work for OneAmerica.

Actually it's neither not necessary nor condescending. It is necessary when you see the number of people out there not masked or social distancing in large crowds. It's evidence of concern for another. I always close my discussions with my team thanking them for all they due, and reminding them to be safe. I *care* about them. They are in Indy, and if you peruse the news, you'll see hat IU Health is in crisis mode with hospitalizations in excess of even the prior peak. Pretty good evidence that the message hasn't reached all.

No. It's a good reminder, a charitable one, and an admonition to those who deny science. I'll keep saying it, thank you very much! BE SAFE this New Years Eve, and at all other times!