Bird

Probably shouldn't be on a K-1, but accountants do lots of things they shouldn't. I'd probably consider him a former key.

OK, I see it now and our distribution fee is in there, great! I called last week and was told that they wouldn't be available until later this month, and that they couldn't get our fees in there. Strangely confident and specific answer that was flat wrong. I forgive them .

RecordkeeperDirect? I thought the notices weren't available yet...

Not 100% sure, but I think it is - no 404© protection. Kind of like walking through a red light in NYC. Most of the time, no consequences, but you run some risk of a cab hitting you. (A participant who lost $50,000 can sue you for not giving enough info.) I dunno, if someone has a better analogy, let me know, it might help to explain it. It's hard because we're all jumping up and down but if someone asks "what's the big deal" then you hem and haw about what happens if you don't comply.

Relying on the platform disclosures as much as possible; pretty much what Austin said. But note/remember that they won't mention certain fees, such as distribution fees that are deducted, so you may (probably) have to do a separate notice for them.

"They" clearly want us to use target date (or balanced) funds, so that's what we do. I'd prefer to worry about the lack of notice distribution than using the "wrong" default, for the reasons MoJo mentions. FWIW.

I guess we are supposed to assume that the plan really says that the match is calc'd separately for each pay period, and not that it is being done that way just because that's how the payroll company does things. If so, I agree with the prior answers. But I suspect that this is widely mis-applied. (ii) Periodic matching contributions. The safe harbor matching contribution requirement of this paragraph © will not fail to be satisfied merely because the plan provides that safe harbor matching contributions will be made separately with respect to each payroll period (or with respect to all payroll periods ending with or within each month or quarter of a plan year) taken into account under the plan for the plan year, provided that safe harbor matching contributions with respect to any elective contributions made during a plan year quarter are contributed to the plan by the last day of the immediately following plan year quarter.

Doing both a platform and letting participants do whatever they want can be problematic, but assuming you've worked out those issues... if the brokerage people can be on the platform and are getting the platform information, then that should cover the need to give them fee and performance info on at least 3 funds. If there are 5 brokerage people with the same funds and those funds are not on the platform, you are supposed to be giving fee and performance info on those funds as well. I'd be worried about the fee disclosures for the actual brokerage account expenses - not so much the after the fact ones, which will show up on the account statements, but the "annual notice" is supposed to disclose those fees. It doesn't have to be on one document, but let's be serious, the brokerage firms aren't doing this - are you?

Austin, you're not going to get a definitive answer on that. Some doubt, yes, but overwhelming shadow, I think not.

Insult taken - I've been paying attention too. If you do have clients, then my comment was meant as a compliment. Your insightful comments, in the aggregate, made me wonder if you worked in the private sector Ed Snyder

OK, I get that, but I'm not so sure the way I stated it is wrong either. And I must say that your insight on this is more than a little scary.

I'm hijacking the thread a little, but has anyone paid attention to this from the DOL: If a service provider fails to provide the required information, the contract or arrangement between the plan and the service provider is prohibited by ERISA, and the plan fiduciary will have engaged in a prohibited transaction. However, the final rule exempts from this prohibition plan fiduciaries who did not know that the service provider had failed to disclose some of the required information. To qualify for the exemption, the plan fiduciary must, among other things, request the missing information from the service provider in writing and, if that fails, the fiduciary must notify EBSA within a certain timeframe. Plan fiduciaries will be able to submit the notice to EBSA online through this web page. So, if you don’t know you didn’t get the info, it’s ok, but you have to ask for what you didn’t know about and then report to the DOL that you didn’t get something that you didn’t know about. Did I get that right?

CIMA 800/468-4200 X7302 Debbie Custis Colonial Surety also does this too, and in fact is probably cheaper. I remember getting a quote last year that was less than what I was paying but CIMA cut their premium to match or come close. Both companies know our biz.

In my opinion they have an employee relations problem but not a plan problem.

You don't have to give any kind of notice. The only issue you have is if the plan actually says matches are determined on a payroll basis, in which case, assuming prior calcs were done properly, you just stop; or if the plan says they are determined on an annual basis, in which case you'll have to calculate the actual matches done for each participant at the end of the year and (presumably) add some money to those who didn't get as much as others. It would be nice, though, to communicate the change informally.

Yes.

Say "oops" and move on to the next item of pressing business? Is someone complaining?

That's how I would do it, but I wouldn't call it a correction, just an acceptable way of filing (or not filing as the case may be). Yes, I would prefer to include accrued contributions so everything ties out better but considering the number of plans handled by large payroll companies these days, I'd hazard a guess that most plans are filed on a cash basis now. (And I would call the contributions for both years contributions, not "other.")

...unless it happens to be term insurance; then I'd put it under other.

I agree. Whether there is some cite for it (I'm not sure), on a practical level it is so much more sensible to say "sorry, you elected a rollover the first time, we already issued a 1099-R on that option, and the plan does not exist anymore so your election cannot be changed. We can change the custodian if you want." I mean, this person can just roll it to an IRA and then immediately take it out, so it's not like it's any kind of a hardship. Otherwise, you open up questions about whether the plan is brought back into existence and must file a return; this way, it's really between the participant and the investment company and there is tax consistency on the reporting.

This one? “If, in this monitoring of what people are doing in the brokerage account, you see patterns begin to emerge, then you need to consider--consider being the operative word--whether or not it makes sense to designate some or all of the choices that people make, if a lot of them are choosing the same things, as a DIA. That is all we said,” Borzi told the audience. I'm not really sure why she would emphasize the word "consider" after being so emphatic about the need to monitor. In my vocabulary it means "think about it but don't necessarily do anything if nothing needs to be done" and the dictionary says: Think carefully about (something), typically before making a decision: "each application is considered". Think about and be drawn toward (a course of action). I suspect she is aiming at the "think about it" part because of the prior passage: "'Additionally, the answer reminded people of their fiduciary duty to 'prudently select and monitor service providers.' So once you choose a service provider, you can't just walk away,' she said." So no, I don't think it is a ray of hope. And even though I hate that they are doing this at the last minute, I think they have a point. I have 10 or so clients who felt that if they just let everyone do almost anything they wanted, they had the least liability. And I gently said "no not really" but wasn't so worried about it. Now I have a virtual mandate to get them to make different arrangements that will be better for everyone involved anyway.

But if you continue on, you see that a distribution is deemed necessary to satisfy an immediate and heavy financial need if two objective conditions are satisfied: § 1.401(k)-1(d)(3)(iv)(E) (E) Distribution deemed necessary to satisfy immediate and heavy financial need. A distribution is deemed necessary to satisfy an immediate and heavy financial need of an employee if each of the following requirements are satisfied— § 1.401(k)-1(d)(3)(iv)(E)(1) (1) The employee has obtained all other currently available distributions (including distribution of ESOP dividends under section 404(k), but not hardship distributions) and nontaxable (at the time of the loan) loans, under the plan and all other plans maintained by the employer; and § 1.401(k)-1(d)(3)(iv)(E)(2) (2) The employee is prohibited, under the terms of the plan or an otherwise legally enforceable agreement, from making elective contributions and employee contributions to the plan and all other plans maintained by the employer for at least 6 months after receipt of the hardship distribution.

I don't think so; I agree with BG. When I first brought up this issue early in the discussion, I read and re-read the rules in our plan document (from the regs) and am quite confident that the point of the safe harbors is to qualify certain expenses without further conditions.

Considering that the DOL effectively re-wrote the rules on May 7, and considering the layers of lawyers that Fidelity and Schwab et al have, I doubt there is anything much coming from them soon. I just left a message for a Schwab rep this morning about a plan using their brokerage accounts (no response yet and none of any value really expected). You might want to check out an ongoing thread on this same topic: http://benefitslink.com/boards/index.php?s...c=51488&hl=.

There's a sentence in there - Unless participants and beneficiaries are financially sophisticated, many of them may need guidance when choosing their own investments from among a large number of alternatives. - but I consider it a throw-away line in terms of guidance. I believe their focus is on the "many of them...".