Santo Gold

We've already done that, and the clients response was: 1. They are happy with us 2. They are suprised we knew about this 3. They are not real "serious" about doing anything right now, but if they like what they hear, they will give the current financial guy an opportunity before making any final decisions. I informed her that we will make a proposal with the new person. I was just looking for thoughts on how to handle the situation with the current advisor. He brought us in on this case, as well as several others. I feel like a cheating spouse if I bid on this with someone we do not even really know, which would take the business away from the current advisor. The client did request that we not say anything to the current advisor just yet. I understand that business is business, and maybe we should quote and leave it at that. It just seems that if this progresses to the point where they do look to make the switch, current advisor will eventually learn about our involvement and sour future business with him.

Our firm works with many different financial advisors and performs only tpa services (no investment/insurance product sales). We are also approved/recommended tpa's for several larger fund families. Recently, we received an email from one of the mutual fund families requesting that we provide a fee quote on a plan that we already handle the admin for. An outside financial rep got in touch with the client and will be proposing new funds, options, etc, and the fund house contacted us requesting that we provide this rep with a quote. Can anyone offer their advice on how to proceed? To do nothing would jeopardize our tpa role in the plan, and yet to offer a quote would seem to be going behind the back of the current financial guy who brought us in. Our fee quote would likely be less than what they are currently paying since the new investment structure and platform would reduce the services that we provide. Any thoughts are greatly appreciated.

I'm sure someone has a ready answer for this. I purchased a laptop about 3 years ago when in hindsight, I was better suited for a desk top (and could have saved about 50% on the cost). In fact I am essentially using it as a desktop at this point, and that is where my question comes up. Since I rarely have to move it around, it is plugged in (ac/dc power) almost always. Rarely do I need it to run on battery. Therefore, it is always fully charged. Is this a problem now or will it be one in the future? I've had 2 different friends in high IT places who have provided opposite answers. FWIW, it is a Dell Inspiron 8200.

Company owner has a 401(k) plan and wants to rollover about $16,000 in after-tax money into the plan. Assuming that the plan allows for after-tax money and assuming the TPA accounts for this money separately (tracks pre and post money separately), is this a problem? Also, is there any special paperwork that needs to be completed to accomplish? Thanks

Grin and bear it may work best in this situation. Thanks.

I already know the answer to this question, but wanted to see how others felt. A two life 401k plan was adopted in 2004. Plan covers owner and the only other employee. We did the 5500 and SAR for the plan. The owner calls back and says that the asset section of the SAR is a little too specific, since with only her and 1 other employee, it is too easy for that other participant to figure out the owners account balance, contributions, etc. Could we revise the SAR to eliminate the specific asset data? I can sympathize with the owner, but of course the answer is no for obvious reasons. But others in the office have suggested sending a revised SAR as requested, but stating plainly in the accompanying letter to the employer that the original SAR is required to be distributed as is and that is what we recommend doing. Still doesn't make it right, but does it help us (TPA) at all?

I did some checking and I believe you are correct Belgarath. Thanks for showing the way.

2 separate questions here for the price of 1, but both are pretty straightforward. If an employer wants to terminate a target benefit plan and they are not planning on filing with the IRS for a determination letter, what is the timing on the notices to terminate (must distribute notice within 15, 30, 45 days)? Question #2 same as above, except it is a money purchase plan. Thanks

Is there a website or other place that compiles information on retirement plan trends? Specifically, I am looking for information on company's that may have switched from a traditional 401k to a safe harbor, possibly detailed by company size. Thanks

Company adopts a standardized prototype plan in 1995 (calendar year plan). I don't have the opinion letter but I would assume it is a TRA 86 document. Nothing seems to have been done (document-wise) since then, although the admin, 5500s, distributions, seem to have been handled timely and properly. The link below answers many questions in this situation: http://benefitslink.com/boards/index.php?showtopic=26811 I wanted to quantify for the plan sponsor what has been missed with their document. Is saying that GUST amendments, RMD amendment, and involuntary distribution amendment (although still not really late) are needed, catch everything? Secondly, if going through VCP to correct, the user fee is $750 (10 employees). Is there usually other government fees or negotiated settlements that take place in this situation? Thanks for comments

Thank you JanetM. After researching this some more and looking at some old posts, I was arriviving at the same conclusion.

An employer wants to start a safe harbor 401k plan, but also wants to include union (collectively bargained) employees in the plan. For these union people, the employer wants to give them a fixed contribution, but they want it to be something less than the 3% non-elective for all non-union people. Is this allowed in a safe harbor plan and if so, does it affect the 401k test in anyway? Thank you

I believe the thread below relates to and answers my question, but was hoping for confirmation since my situation is a little different. http://benefitslink.com/boards/index.php?showtopic=25657&hl= Briefly, in April, 2005, company X is bought by company Y. X has a 401k and Y has a SIMPLE 401k. Normally, there can be no other retirement plan in place when a SIMPLE exists. But I believe the transition rule that applies to acquisitions allows both X and Y to maintain their separate plans for 2005 and 2006. Is this correct? Also, I think the intention is for X's 401k to be terminated and for the SIMPLE 401k to remain as the only plan. As long as the 401k is term'd before 12/31/06 (calendar year plans), there will not be a problem? Finally, would anything change if this involved a SIMPLE-IRA rather than a SIMPLE-401k? Thank you

Thank you Janet M. 2 more questions come to mind if we merge: Other than making elections on what new investments (if any.....I think the plans are identical in all BRF as well as investment options) they want, is there anything the participants of the "old" plan need to sign off on? If they have no options on what to do with their money, I can't see where they would need to sign off on anything. Also, it's been a long time since I handled a 5310-A; is that the only form needed to report the merger (other than the final 5550 and pertinent questions on that form) and is there a user fee associated with that form?

Thanks for the response. Does that mean that those under 21&1 folks who do not get a s/h contribution might still have to get a 3% top heavy contribution, even though they are not otherwise eligible for any other type of employer contribution?

If a company adopts a 401k safe harbor with no elibility requirements to make 401k contributions, can they still put a 1 YOS requirement on the ability to receive the safe harbor contribution? Will that jeopardize the automatic passage of the ADP test? Thanks

An employer has 2 401k plans covering 2 different groups of employees. They are considering eliminating one of the plans and have everyone covered in 1 plan. Would a plan merger make more sense than a plan termination? Are there any obvious pros/cons to doing a merger vs a termination, or vice-versa? Am I correct in that in a merger, there is no option for a participant to receive a distribution whereas with a plan termination the participants could take distribution? Finally, in a merger, accounts do not automatically fully vest, correct? Thanks for any insight!

A 40 year old participant in a PS plan (with rollover money) is looking to take a hardship withdrawal for almost all of his account balance for the purchase of a home (1st time home buyer). Am I correct that this is not an eligible rollover distribution and therefore taxes do not need to be withheld? Also, the 10% early distribution tax does apply so he could gross up the hardship amount to cover the 10% penalty. Finally, can the TPA fee be paid directly from the participants account? Thanks

So even if the participant rolls the RMD to an IRA, and then (before 12/31/05) takes a larger RMD determined on the basis of all assets in the IRA (including these newly rolled over plan assets), that still is no good, correct? Thanks

Terminated participant is age 75 and has been taking RMDs for several years out of his plan account balance. He now wants to "consolidate" his monies and move his plan money into 1 big IRA with all of his other IRAs. Question: If he currently has $60,000 in plan money, and lets say his RMD for 2005 for this balance is $3,000. Can he roll the entire $60,000 now (May, 2005) into this IRA, and take an RMD by 12/31/05 from this IRA, which will have to factor in all of the other IRA monies?

The EGTRRA tax credit of up to $500 for the first 3 years of plan operation......Does anyone know exactly where (eg what line) this is reported at on the company's tax return? In this specific case, its a sole prop. Thanks

If the employer decides to go with offering another investment option/firm and assuming all other things are equal between this investment firm and the current one, and if the only one who takes advantage of the new investment firm is this 1 HCE (there are 3 hce's total), would that be considered discriminatory?

Kirk Maldonado: The employer does not want to retroactively reduce the match back to 1/1/05. Rather, they would like to amend the formula, effective 7/1/05 (the match is deposited each month). Would these actions be sustainable?

Janet M - Thanks for the reponse; I'm a little suprised it would be that easy. I was worried that since we have a set match formula in place at the beginning of the year and to change it in mid year would mean some participants could get a smaller match as a result of the change, that this would result in a cutback of benefits. Nothing to worry about?

In a non safe harbor calendar year 401k plan, there is a non-discretionary tiered match formula. The employer would like to modify this formula in mid year (as of 7/1). I have not yet seen his proposed change, but it sounds like the match will be greater on the first 3 percent deferred, and smaller on > 3% deferred. Since the current match formula is written into the document, can it be changed in mid year if a portion of the match will be subsequently be smaller?