Bird

It's the sponsor's problem. They have to either do the chart (disclosures) themselves, find a new provider who provides this service, or not comply. The provider has no obligation to provide anything, although most platform recordkeepers are doing something.

Well, not to drag it out, but I see the fact that some contributions have been deposited (not allocated) as irrelevant, and think that plan termination as of a date during the year is not the same situation. I rarely if ever think you're wrong so am happy to just agree to disagree (but agree that a better solution is recommended!).

But there are no allocation requirements, so participants have already earned the right to the allocation formula (pro-rata, based on annual comp). And this new method isn't that. Maybe I'm being ultra-conservative, but I would find another way to get close to what they really want.

I would look at it as maintaining the SIMPLE IRA for the full calendar year, just that Company A ceases to exist so there are no employees and no contributions after 8/31.

They are so good with their support that you probably got it already, but it's under Documents, then to the lower right. You might want to tidy up some answers in the document, and might also want to make some changes after it is generated, but at least it's a starting point. (I changed the first paragraph from referring to the specific year to "...provisions...that are in effect and will remain in effect until further notice.)

I agree with ETK that it's not a BRF issue and is ok. If it's really only the 58 year-old who is being targeted, I would prefer the NRA-at-age 55-with in service withdrawals solution on general principle, but either is ok.

Our document provider (Fort William) has a notice in their document package. I'm not comfortable sharing their language here, but the point is that you might be surprised to find this available...somewhere, in something that you're paying for already. If you haven't looked already - not trying to be offensive or anything here!

I say no. You either have an integrated formula with the safe harbor integration levels, or you don't, and test using the actual wage base.

I'm surprised no one has said it already, but read the document. Mine says: If a distribution is to be made to an individual who is either a minor or legally incompetent, the Plan Administrator may direct that such distribution be paid to the legal guardian. If a distribution is to be made to such person and there is no legal guardian, payment may be made to: (i) a parent, (ii) a person holding a power of attorney; (iii) a person authorized to act on behalf of such person under state law, or (iv) the custodian for such person under the Uniform Transfer to Minors Act, if such is permitted by the laws of the state in which such minor resides. Such payment shall fully discharge the Trustee, Plan Administrator, Trust Fund, and the Employer from further liability on account thereof. And I'm quite sure the loan is taxed to the participant's estate; the beneficiaries are only taxed on what they get.

So they have been contributing X% per pay period and now want to contribute Y% for the remaining pay periods? But the plan allocation language is annual, and you want to change the language to per pay period? I'd be more worried about whether it can be done at all than with how to do it; I see it as a prohibited cutback. I'd have them contribute at the lower rate, then figure out the highest percentage anyone got and true up at the end of the year.

I think this part got overlooked. I am skeptical of Schwab's ability or willingness to provide anything other than a standard schedule for the prospective (annual notice) listing, but that should actually be good enough. And I think that if actual fees charged show up on their monthly statements, that's good enough for the after-the-fact disclosure.

Logically I think you are correct, there are 18 options. But technically, I believe there is a distinction and the participant truly has 17 "investment alternatives", and another choice of "you invest for me" which is a (legitimate) black box, not subject to the disclosure rules. I'm not quite sure how to put that in the notice, but will have to take a stab at it in the next couple of weeks.

Interesting link in the BenefitsLink newsletter yesterday...apparently Fidelity has a lot of these accounts, and somehow John Kerry got involved with writing a letter to the DOL suggesting they back off. Sort of an "aha" moment in understanding why the sudden change. Phil Chiricotti: The DOL went off the reservation...They backed off and damaged their credibility. Phil Chiricotti: The DOL went off the reservation...They backed off and damaged their credibility. EMAIL // SUBSCRIBE // PRINT // REPRINT What to make of DOL's backtrack after John Kerry, Fidelity Investments and the rest of the riled 401(k) industry cried foul

Hmm, I always thought that notifying participants of missed payments and the opportunity to cure was just a courtesy. I don't see how failure to notify in any way affects the default.

I agree, it should be fixable. But be prepared for the investment co. to want to treat the money going out as distributions, with 1099-Rs being issued; you'll have to talk to them beforehand and get detailed instructions on how to fix it without 1099-Rs - maybe a letter of instruction with signature guarantee, and language about indemnification. Been there...

This definitely caught me by surprise! I almost wish they left it alone; I spent a lot of time on it with some clients and was making some progress in getting them to think about moving to platforms, which would be better for everyone in the long run anyway. And maybe I have some government worker in me (shudder) but I was seeing their point that just letting everyone do whatever they want isn't necessarily enough. Oh well. I'll bet anything that 4th broker is talking about 408b2. I may have ranted about this already, but trying to explain this (former problem w/Q&A 30 relating to the 404a5 regs) was a nightmare. The first couple of times, I explained it carefully and they said "oh yeah, we've got that covered" and spit the 408b2 stuff at me. So I learned to say "oh and I am not talking about 408b2 so don't give me that stuff" and they gave it to me anyway. They can't focus any more than a gnat can and hear "disclosure" and do whatever they can to get rid of the issue, whether it's right or not.

My thoughts exactly. Sounds like the money would have been in the MM account, earning 0% or next to it.

Yes, we're including something like what you suggested...actually lifted the language from the regs: Electronic copies may be sent to participants who use computers as an integral part of their employment duties or to participants who give consent to receive this disclosure electronically. For those participants who do not use computers as an integral part of their employment duties, the disclosure must be distributed via hard copy. I think the two-step process mentioned by Kathy is for those who don't "use computers as an integral part of their employment duties". If not, well, tough nuts. Yes, Aug 30 is the date.

You do have to check the document. As long as it allows ff to pay expenses, I don't have a problem with pre-paying fees...3 or 4 years might be pushing it a bit but when the alternative is creating tiny accounts that are just going to muck things up later, I think it's the best solution.

Well, as I said, I can spit out an annual notice from Ft. Wm. that regurgitates fees that are in the SPD, e.g. for loans. And I can tell them to get a fee schedule from the broker and attach it (chortle), understanding and noting that the other stuff now "required" under the FAB won't be there. I'm not quite sure if I will do that. I am trying to have conversations about it, starting with the brokers (as a courtesy), and am running into a brick wall.

I don't know how you can ignore the FAB, and my post was about 408(b)(2) anyway, but I'll try to go along... yeah, I think you'd need some kind of a brokerage fee schedule and general statement. I originally thought that it would be safe to assume that everyone had received such a schedule at some point, but now I think I will spit out the Ft. Wm. notice and tell the client and/or broker to attach a fee schedule (snickering at the idea of that actually happening). I'm still working it out in my head, to be honest.

New question but closely related...is anyone else getting, and looking at, 408(b)(2) disclosures from brokerage firms? What do you think? For commission schedules, Merrill* just references an SEC website. If the info is there, I sure as heck couldn't find it. Scottrade references their own website for fees. Our discussion here says these are inadequate, yet I'm sure 7 layers of lawyers have reviewed their stuff. I'm not sure yet how much I will get involved but considering that sponsors are supposed to make sure they get this stuff, and if not, rat out the providers to the DOL and consider terminating their services, I am thinking we have to at least say something. *Amusing side note...if you're wondering why I have this at all, it's because the client has self-directed brokerage accounts, and I wrote to the broker about the participant fee disclosure problems arising from FAB 2012-02. And said (from experience) "I know you're going to hear "disclosure" and want to give me your 408(b)(2) fiduciary fee disclosure documentation, but please explain to your compliance people that this is something different." Of course he writes back and proudly says "We're on it; here it is." And of course it is the 408(b)(2) stuff.

I don't see where it cost them $100,000. They were sued for losses in that amount. I still say to use the target date funds.

I generally agree with ETK (with a disclaimer that we don't really know enough to make a recommendation, blah, blah). A rule of thumb, subject again to a lot of caveats about your own situation, is to get 5 to 10 times your annual salary.

I think you have to follow the terms of the plan(s). The fact that they're not consistent is not problematic. The kids will probably ultimately get the 403(b) money, just with greater hassle and without the ability to roll over.