Peter Gulia

BG5150's query leads to a preceding question: Why is the loan provision not explained in the SPD?

Without answering Chaz's question, could a properly behaving practitioner describe to her client the practitioner's view that it is unlikely that the Internal Revenue Service would pursue enforcement against an employer that treated the plan amendment as if it were a section 1.125-4©(2) change in status?

Kevin C, thank you for the follow-up. David Rigby, thank you for the idea about talking with the auditor. Before putting this query on BenefitsLink, I had checked with the audit firm's engagement partner and eb quality-control chief. They said either effective time works for them. Likewise, I've had clients go in different directions on this point - even after considering the difficulty of a plan year that begins and ends in one day.

Bird and Kevin C, thank you for your good help. In this situation, doing two annual reports might be unimportant because Smaller's plan has much fewer than 100 participants and does not need an independent qualified public accountant's report. The recordkeeper (for both plans) does not have a separate fee for Form 5500 preparation. Does that change your analysis about whether December 31 or January 1 is preferable?

A big business will acquire a smaller business (this summer or autumn). Big intends to merge Smaller's safe-harbor 401(k) plan into Big's (non-safe-harbor) 401(k) plan. (Assume both businesses have a calendar year for accounting and tax. Assume both plans have a calendar plan year.) If the merger of plans happens before December 31, 2014, would that defeat the Smaller plan's safe-harbor treatment? If to avoid such a concern (or for other reasons) one suggests that the merger of retirement plans wait for year-turn, does it matter whether the merger is effective as of December 31, 2014 or January 1, 2015? Which of those do you like better? What are your reasons for why you prefer it?

Yes, of course, a responsible plan fiduciary must evaluate the service provider and its compensation; and should consider whether to disengage the provider, or to renegotiate the provider's arrangement. Further, a responsible plan fiduciary should consider whether to demand that the provider restore to the plan the provider's excessive or unapproved compensation. In addition to doing those things, reporting updated information might help might a fiduciary's duty of communication.

While I don't presume to give any advice, one can imagine as a possible reason for filing a revised Schedule C (and perhaps other aspects of a report) a desire to start the knowledge clock on ERISA section 413's statute of limitations for a breach or violation that the plaintiff could have discerned by reading the revised report.

Rather than a particular payment that turns on a particular condition, what if an employer decides individually concerning each employee (if there is no collective-bargaining unit) the salary or wages the employer offers to each?

Some practitioners suggest that a plan's administrator (and the plan's service providers) might prefer not to have any information that might lead one to wonder whether an order's division is inconsistent with an agreement that the order is supposed to be based on. A few have written in the QDRO procedure that, except for the claimant's claim form and a submitter's transmittal letter, the administrator will not read any document other than an order. To emphasize the point, the procedure has the administrator send a letter to all claimants and representatives stating that documents other than the order were not read (and were discarded). I can see advantages and disadvantages to this; what do BenefitsLink mavens think about this procedure?

To the extent that a plan requires investment-related decisions, the plan might also engage a 3(38) investment manager (and might select that manager with court approval). But a plan must have an administrator. So if no one associated with the employer will serve as a plan's administrator, could appointing (with court approval) a 3(16) service provider as the plan's administrator help?

Let's refocus the query. Assume circumstances in which, following the change in service providers, nothing in the Internal Revenue Code (including rules, procedures, and other interpretations under the tax Code) requires a change to a document that was stated using a no-longer service provider's prototype or volume-submitter document. But the employer is willing to restate the plan because the employer wants to make the current service provider's work more efficient by letting it look to a form of document on which the service provider has a developed base of knowledge and experience. In those circumstances, is the expense of restating the plan an expense that is reasonable in the plan's administration because it enables the plan to obtain the current service provider's services (or obtain them more efficiently)? For those who worry about whether an otherwise unnecessary restatement can be a proper plan-administration expense, would it change your analysis if the superior service provider were unwilling to accept an engagement unless the plan is restated using the document that the service provider prefers?

A recent BenefitsLink discussion considers whether a "3(16)" service for an organization unaffiliated with a plan's sponsor to serve as a plan's administrator would or wouldn't result in a meaningful reduction of liability that an employer-associated fiduciary otherwise might bear alone. Assume a situation in which the employer's owner and chief executive is restrained by a court order that bars him or her from serving as a fiduciary of any ERISA-governed employee-benefit plan. Assume further that none of the employer's employees is willing to serve as a plan's administrator. In those circumstances, could appointing (with court approval) a "3(16)" service provider as a plan's administrator help? What do BenefitsLink commenters think about this?

How much discretion should a deferred compensation plan's administrator have in deciding whether a participant's circumstances result in a "termination of employment" (as 26 C.F.R. 1.409A-1(h)(1)(ii) describes it)?

http://www.groom.com/media/publication/1423_FATCA_Compliance_Challenges.pdf

What do BenefitsLink mavens think about the idea of naming as trustee the plan sponsor business organization itself (if State law permits, or does not preclude, the organization from serving as trustee regarding its plan for its employees)?

If one tries to enter more than one name for line 6a, will the computer system accept the entries? If one tries to enter more than one EIN for line 6b, will the computer system accept the entries? Is it possible to add a .pdf attachment related to this line 6? I ask because a filer might choose to list all trusts that the plan uses, doing so to support a later statute of limitations or statute of repose defense.

Some executives or other select-group employees desire a 457(f) plan because one desires even more deferral after exhausting the limits of a 403(b) or 401(k) plan and a 457(b) plan. Some employers like a 457(f) plan because it requires an employment-related condition that is a substantial risk of forfeiture. An employer might see this as improving its ability to keep a desired executive. Both employers and employees use both kinds of deferred compensation as a way not to increase the salary reported on Form 990, hoping that some readers won't put together the pieces to estimate what the real total compensation is.

If one follows Senator Rubio's idea, is there an advantage to an employer? An employer's role would be limited to sending the contributions; an employer would be excused from responsibility for selecting investment alternatives, selecting service providers, and otherwise administering the plan. Would anything about Senator Rubio's idea be a disadvantage for an employer?

What do you think about Senator Rubio's idea of allowing non-governmental employees to contribute to (and invest under) the Federal Thrift Savings Plan?

Thank you, all, for the further perspectives. If an account statement is mailed in a sealed envelope addressed only to the participant, does that resolve a privacy concern about whatever is printed on the statement?

Thanks for the help. One more: If a distributing plan's administrator does not furnish a determination letter and refuses to sign anything at all, how does an IRA custodian satisfy itself that the rollover comes from an eligible retirement plan?

GMK, thank you for your helpful ideas. The situation I'm thinking about is one for which the plan's administrator has contracted with its recordkeeper for the recordkeeper to receive, process, and keep all beneficiary designations. The employer/administrator does not have any beneficiary-designation records beyond those kept at the recordkeeper. The recordkeeper also will print the beneficiary information on participants' quarterly account statements without an incremental fee. Do these facts change your thinking about whether it's a good or bad idea to display the beneficiary information on the statements?

If ERISA governs the plan, a fiduciary might get its lawyer's advice about the extent to which ERISA preempts State law. However, State law, even if not governing, might nonetheless be relevant if the plan refers to State law, or refers to a concept that is not found in Federal law. Likewise, a fiduciary might get its lawyer's advice about the extent to which it is at least permitted, and perhaps required, to follow the plan's documents. And if a plan's administrator has discretion in deciding whether to recognize a beneficiary's conservator, UTMA custodian, or other fiduciary, the administrator might consider its duty to exercise that discretion for the exclusive purpose of providing the plan's benefit to the beneficiary while incurring only reasonable expenses of plan administration.

What do think about the idea of displaying on every quarter's account statement the name that is in plan's records as the participant's most recently named beneficiary? Do you like this? Why or why not?

What do BenefitsLink mavens think about my remaining question: If the paying plan never filed a Form 5500 report, the would-be receiving plan's administrator asks the paying plan's administrator for a written statement that the paying plan is intended to be tax-qualified or eligible, and the paying plan's administrator refuses to sign anything at all, what should the participant do next?