Bird

That's a long discussion and you might want to review other threads; I've opined at some length on this exact topic. Text from the FAB, Q&A 13, is below. I've come to think, somewhat unfortunately, that if participants can truly do whatever they want, then no specific disclosure is needed - you're not forcing them into XYZ brokerage account that charges $100 per year or whatever. They could, in theory, go to ABC bank and buy a CD and pay no direct fees. Nevertheless, I've tried to get the brokers involved to provide a simple fee schedule, even with the most basic info ($x per year) and could've saved myself a lot of trouble by simply poking myself in the eye with a sharp stick. I do think that if everyone is effectively or actually limited to XYZ brokerage firm, then you absolutely have to provide a basic fee schedule on fees that they will pay (account fees and commissions). I have some where everyone seems to wind up in (godawful) managed accounts, but, at least in theory, they could let their money sit in a MM fund or buy a mutual fund or whatever, so the managed account (and fees associated thereon) is just like any other option. Second, a plan administrator also must provide an explanation of any fees and expenses that may be charged against the individual account of a participant or beneficiary on an individual, rather than on a plan-wide, basis in connection with any such window, account, or arrangement. See 29 CFR § 2550.404a-5©(3)(i)(A). This would include: (1) any fee or expense necessary for the participant or beneficiary to start, open, or initially access such a window, account, or arrangement (such as enrollment, initiation, or start up fees), or to stop, close or terminate access; (2) any ongoing fee or expense (annual, monthly, or any other similarly charged fee or expense) necessary for the participant to maintain access to the window, account, or arrangement, including inactivity fees and minimum balance fees; and (3) any commissions or fees (e.g., per trade fee) charged in connection with the purchase or sale of a security, including front or back end sales loads if known; but would not include any fees or expenses of the investment selected by the participant or beneficiary (e.g., Rule 12b-1 or similar fees reflected in the investment's total annual operating expenses)

Still having problems myself. I use Firefox 15.01.1; anyone else?

As noted, I don't think ASPPA has endorsed it. I don't know if putting "ASPPA's" in front of "Brian Graff" was sloppy reporting and editing, or intentionally misleading (and I believe they are the only two choices), but I don't think much of the source of this (NAPA Net). It's like People magazine but not entertaining.

It stopped working for me several days ago; I thought it was after this thread started but it's probably related. I used to never bother logging out, although I would leave the page, and I didn't have to log in when I came back but it would recognize me and recognize the new posts. I'm going to try formally logging out and logging back in and see if that works.

I'm not sure if ASPPA has blessed this, although I did see Brian's name in there somewhere. I'm on the asap committee and this thread is the first I've heard of it. But we wouldn't necessarily know of a topic until a day or two before anyway. FWIW I think it is crap. Someone is trying to siphon off a few pennies from everyone else.

If you're talking about participants who entered the plan a while ago, and you're trying to get historical entry dates right, then I'd take my best shot and move on. I'm not quite sure what you're getting at, but going back to the first response, I agree it is simply the date of participation specified in the document, e.g. if the plan says entry is after 1 year with quarterly entry dates, and an employee was hired 2/1/2011, the entry date is 4/1/2012. Option #3 is a little troubling if it is later than #2.

Sure but that's the environment we're in. I'm not trying to be argumentative or anything, but to me it seems black and white. I guess I could get slapped down on an audit; I'll be the first to let everyone know if I'm wrong.

I'm 100% ok with the "rolling cure" and never heard it questioned - virtually every "late" loan is going to be in this position. And am (still) 100% ok with payments being made after the 5 year period, as long as they are within the cure period. FWIW

I don't suppose they have to tell him, if it's just a testing correction*. But if it's a correction of some other failure*, maybe they do. But if it's a large chain I doubt that whomever you/he would ask would have any more of a clue about it than you do. *You probably don't know what we're talking about, but here's a quick and dirty summary - 401(k) plans have to run a non-discrimination test to prove that highly paid employees aren't benefiting too much more than non highly paid employees. If that test fails, one way to fix it is to have the company throw some money in for the non-highly paid. (To be honest, I doubt that's what's happening.) Another failure might be, as you suggest, failure to follow an auto enrollment or escalation. (I kind of doubt that's it either.) Another possibility suggested is a "safe harbor" QNEC, and I'd guess that's what it is - the company makes a 3% contribution for everyone. The actual deposit might lag quite a bit, so if it just showed up on a statement, it might be for last year...$900 is 3% of $30,000, so if that's what he made in 2011, that's probably what it is.

While *I* prefer the term "Safe Harbor Nonelective Contribution", the IRS uses "qualified nonelective contribution" in the regs. FWIW.

I don't have a cite but I am pretty confident that it is the same. Accumulation value really means nothing whatsoever for valuation purposes - it's simply a number that is used for interest crediting purposes (and to make things look a little better to the buyer). The only time the accumulation value would actually be paid is in the event of death...I suppose you could factor that in to determine "fair market value" and nudge the surrender value up ever so slightly, at least in theory.

Technically I think you should use the interpolated terminal reserve, which is going to generally be close to the surrender value.

I would fix it for the year I was reporting and going forward, as you suggest.

Cool/thanks.

A plan account was apparently mis-coded by the brokerage firm and they withheld taxes on some earnings. (Not my plan; just trying to help out an accountant.) Does anyone know how to get that back? I suggested to the accountant that they file a trust return - Form 1041 - and show $0 tax due and $x withheld and they should get a refund, just like any other overwithheld tax. Any thoughts?

If you're asking whether that was a legit termination, I think it could be. The facts and circumstances as you presented them sound ok, especially if the partnership itself changed and that partner no longer had any interest in the profits. If not then it's a little dicier and I don't know that you can get a definitive answer here. Sounds like it was more of a kind time than a mean time if he was able to get his money out .

I disagree with both of you, I think. Yes, after-the-fact disclosure of fees charged is required and if it shows up on the brokerage account that is good enough. But you don't have to disclose "sales charges" on mutual funds, in part because there are so many choices and options. But fees specific to the brokerage account, including commissions on individual securities (that's my interpretation), must be disclosed in advance, in some kind of a schedule (and that's where the brokers are proving unable or incompetent). So I guess if you meant commissions on regular brokerage account trades maybe I agree with you, but not about the dollar per thousand part. Second, a plan administrator also must provide an explanation of any fees and expenses that may be charged against the individual account of a participant or beneficiary on an individual, rather than on a plan-wide, basis in connection with any such window, account, or arrangement. See 29 CFR § 2550.404a-5©(3)(i)(A). This would include: (1) any fee or expense necessary for the participant or beneficiary to start, open, or initially access such a window, account, or arrangement (such as enrollment, initiation, or start up fees), or to stop, close or terminate access; (2) any ongoing fee or expense (annual, monthly, or any other similarly charged fee or expense) necessary for the participant to maintain access to the window, account, or arrangement, including inactivity fees and minimum balance fees; and (3) any commissions or fees (e.g., per trade fee) charged in connection with the purchase or sale of a security, including front or back end sales loads if known; but would not include any fees or expenses of the investment selected by the participant or beneficiary (e.g., Rule 12b-1 or similar fees reflected in the investment's total annual operating expenses). Wow, re-reading it it seems to call for a disclosure of mutual fund front- or back-end loads as well, but I don't think they meant it. I have been struggling with advisory fees as a percentage of assets (posted in another thread) and am thinking that because they are not required to open or maintain the account, they are not subject to advance disclosure.

[discussion of specific problems] With all due respect, there is a clear pattern of late, missing and incorrect information. Therefore, effective immediately, we are resigning as your pension service provider. You are an idiot and a jerk.* [More discussion of suggestions - in this case, some of the problems were due to distribution and withholding problems b/c they were using a pooled account, and I suggested they go to a turn-key provider who would handle that stuff in their system.] Our sincere best wishes to you and your business. *Just kidding on this! But I thought it...

For the most part, no. I have one client who might make a change, but it's more a result of the hassle and uncertainty of the brokerage account arrangement than the fees themselves, although the lights are very slowly going on that their investment fees are indeed rather high. I'm not really sure what to say about the overall situation - the DOL is not misguided in its intentions, but it's been a real PITA with not much in the way of results.

There's "profit sharing plan contributions" which is a misnomer anyway, since profits aren't required to make them; let's call them "discretionary employer contributions." As noted, the non-employee owners can't get anything because they don't have compensation. And there's "profit sharing" - an agreement between owners as to how profits are to be shared. Whether the investor-only owners should get something because the employee-owner gets a discretionary employer contribution is really something to be answered by their ownership agreement - and it might not be in there so it might need discussion or interpretation. But it's not a plan issue.

It's not uncommon for board resolutions to approve actions taken by an officer after the fact. It's also possible that the board members unanimously agreed to adopt the plan before it was signed, and just didn't sign the resolution or consent agreement until later. It might depend on how the resolution/consent is worded. It wouldn't be on my worry list. (I think) in a hyper-technical sense, it's nobody else's business (e.g. the IRS) if an officer took action without board approval.

I've heard it argued that a premium loan could trigger UBTI taxes. That might be what he's thinking about, but I don't think it's a problem.

I agree. To me, the merger date is the legally transferred date.

I'm starting to think management fees do not have to be disclosed, at least not in the annual notice. That is, at least in theory, an option, just like buying any mutual fund is an option. It's not "necessary" to open or maintain the account, so it hinges on #3: (3) any commissions or fees (e.g., per trade fee) charged in connection with the purchase or sale of a security, including front or back end sales loads if known; but would not include any fees or expenses of the investment selected by the participant or beneficiary (e.g., Rule 12b-1 or similar fees reflected in the investment’s total annual operating expenses). Now I'm back to thinking it does have to be disclosed as being "in connection with the purchase or sale of a security", at least somewhat akin to that. I really don't know. Hope to hear from others on this.

I'm not sure if this is a rant or a question...let's see where it goes. I have a number ("too many") of clients who use managed brokerage accounts in self-directed plans - that is, they hire an investment manager, or otherwise charge an asset-based fee, for managing money. This is a separate charge that shows up as a deduction on the participant statements. I've tried, pretty much unsuccessfully, to bail out on the disclosure - I spit out a basic notice from Ft. William and say "your broker should provide a separate schedule of fees" and ask the broker to provide a fee schedule. (Chuckling now at my own naivete that this could possibly work...) Of course, the brokers proudly send me their 408b2 disclosure. I say "no, no, that's not it, I want you to tell them what they will pay in their account." So they send me something that tells what the fees were last year. I say "no, no, that's not it, I want you to tell them what they will pay in their account - you know, a $100 fee or whatever, and the percentage for management." Then more long and agonizing discussions follow, and (usually), they eventually send me a 111 page mess that might or might not contain what we want, but no way am I wading through it to pull out a fee schedule. We're at an impasse right now on most of these. (I suppose my barely concealed contempt for them is affecting my relationships.) Anyway...now I have a Merrill (why is it always them...) guy telling me that his home office "expert" says they really don't have to provide a schedule of management fees. Mmm. I guess that's the question...could you consider a managed account an "option" that doesn't require advance disclosure of the management fees? They are being deducted at the brokerage level, so it's not like a mutual fund with an expense ratio. I pasted most of Q&A 13 below; it doesn't discuss such fees directly but in my mind that doesn't mean they shouldn't be there. It doesn't make sense to me that they would have to disclose commissions on trades but not an overall management fee. Thoughts? Q-13: What information must be disclosed under paragraph © of the regulation about “brokerage windows,” “self-directed brokerage accounts,” and other similar plan arrangements that enable participants and beneficiaries to select investments beyond those designated by the plan? A-13: First, a plan administrator must provide a general description of any such window, account, or arrangement. See 29 CFR § 2550.404a-5©(1)(i)(F). The regulation does not state how specific and detailed a description must be to satisfy this requirement. Whether a particular description is satisfactory will depend on the facts and circumstances of the specific plan and the specific window, account, or arrangement. At a minimum, however, this description must provide sufficient information to enable participants and beneficiaries to understand how the window, account, or arrangement works (e.g., how and to whom to give investment instructions; account balance requirements, if any; restrictions or limitations on trading, if any; how the window, account, or arrangement differs from the plan’s designated investment alternatives) and whom to contact with questions. Second, a plan administrator also must provide an explanation of any fees and expenses that may be charged against the individual account of a participant or beneficiary on an individual, rather than on a plan-wide, basis in connection with any such window, account, or arrangement. See 29 CFR § 2550.404a-5©(3)(i)(A). This would include: (1) any fee or expense necessary for the participant or beneficiary to start, open, or initially access such a window, account, or arrangement (such as enrollment, initiation, or start up fees), or to stop, close or terminate access; (2) any ongoing fee or expense (annual, monthly, or any other similarly charged fee or expense) necessary for the participant to maintain access to the window, account, or arrangement, including inactivity fees and minimum balance fees; and (3) any commissions or fees (e.g., per trade fee) charged in connection with the purchase or sale of a security, including front or back end sales loads if known; but would not include any fees or expenses of the investment selected by the participant or beneficiary (e.g., Rule 12b-1 or similar fees reflected in the investment’s total annual operating expenses). The Department understands that in some circumstances the specific amount of certain fees associated with the purchase or sale of a security through a window, account, or arrangement, such as front end sales loads for open-end management investment companies registered under the Investment Company Act of 1940, may vary across investments available through the window or may not be known by the plan administrator or provider of the window, account, or arrangement in advance of the purchase or sale of the security by a participant or beneficiary. In recognition of the foregoing, a general statement that such fees exist and that they may be charged against the individual account of a purchasing or selling participant or beneficiary, and directions as to how the participant can obtain information about such fees in connection with any particular investment, ordinarily will satisfy the requirements of paragraph ©(3)(i)(A) of the regulation. Otherwise, plan administrators might inundate participants and beneficiaries with information about the cost of buying or selling all the various securities available through a window, account, or arrangement, despite the fact that participants and beneficiaries may not have the interest or expertise to purchase or sell each or any such security. Further, the statement should advise participants and beneficiaries to ask the provider of the window, account, or arrangement about any fees, including any undisclosed fees, associated with the purchase or sale of a particular security through a window, account, or arrangement, before purchasing or selling such security.