Peter Gulia

ETA, thank you for the helpful information. It's interesting that your ERPA requirements are double my lawyer requirements. One wonders how ERPA requirements compare to an enrolled actuary's requirements?

I hope BenefitsLink readers will help me crowdsource a little academic task. The goal is to get a general sense, which at this stage may be anecdotal rather than scientific, of how many continuing-professional-education hours are required of each of several kinds of professionals. Are actuaries, accountants, attorneys, enrolled agents, enrolled retirement plan agents, certified financial analysts, certified financial planners, and other professionals similar or different in what each license requires? How many CPE hours? In what measurement period? Is the CPE requirement a condition of a governmental license or privilege? Or is the CPE requirement a condition of using an association's trademark or certification mark? I'll start: I must do 12 CLE hours a year. But this need not be evenly paced because there are three-year cycles, and there are limited carry-forwards of some credits not used in a previous cycle. This CLE requirement is a condition of my license to practice law in Pennsylvania. So how many continuing-professional-education hours are required of you?

Imagine an automatic-contribution arrangement under a governmental (non-ERISA) plan that does not provide a permissible withdrawal and so need not be an eligible automatic contribution arrangement. (The plan allows only salary-reduction contributions; there is no nonelective or matching contribution.) Imagine also that the State statute that enables the plan and its automatic-contribution arrangement does not require an annual notice. Even if no law requires it, should the plan's administrator do annual notices? What arguments might one make for omitting annual notices?

Could this idea be done with a profit-sharing plan?

But what if a retirement plan has 35,000 participants and the incremental mailing would result in incremental expenses of $25,000 charged against the plan's assets? If, as My 2 Cents suggests, a fiduciary might find that few participants read the information, shouldn't such a fiduciary at least consider ways to reduce expenses that lower participants' accounts?

I'm showing my lack of memory that results from not using the information in work experiences. While I've advised trustees of defined-benefit pension plans, I've never designed a plan that needed to worry about the 401(a)(26) rule. Doghouse, thank you for reminding me about that constraint.

What about three pension plans, so each owner makes his or her plan-design decisions, funding decisions, and investment decisions, and so none of the owners subsidizes another?

Perhaps there's also room for a mailing efficiency. A plan's administrator could ask its recordkeeper to enclose the 2016 summary annual report in the same envelope that mails the 2017Q4 account statement.

Does this law change mean that a participant might get her December 31, 2017 account statement (in early January 2018 [see 17 C.F.R. 240.10b-10(b)(2)] before she gets her 2016 summary annual report (by January 15, 2018)?

Flyboyjohn, thank you for your further thoughts. All the players considered the Schedule C reporting about a change in the IQPA. The employer described above is not my client.

David Rigby, thank you for the good critical thinking. It happens that the employer I described isn't worried about accounting to shareholders because the company has only one owner, and the owner agrees with the plan's administrator. The plan's administrator is considering filing the IQPA report because the administrator believes doing so is less expensive (for the plan) than replacing the IQPA. Thanks again for the good thinking, and maybe smart BenefitsLink mavens will spot issues we missed.

Consider this scenario: An employee-benefit plan's administrator (the plan's sponsor) and the independent qualified public accountant disagree about a point of accounting for the plan's financial statements. The administrator considers its knowledge of accounting superior to the IQPA's knowledge. The IQPA threatens to issue an adverse report. The administrator says "bring it on." The administrator does not fear that checking the "adverse" box at Schedule H's part III would trigger an examination because EBSA and IRS both have open examinations, with teams of examiners using office space in the plan's sponsor's headquarters. Also, the administrator does not fear the IQPA's explanation because the administrator confidently believes the IQPA is wrong. Beyond widening and intensifying the open examinations, is there any other unwelcome consequence that results from checking the adverse box and attaching the report that explains the IQPA's reasons for its adverse opinion?

ESOP Guy, thank you for your good observations. My experience too is that those who have practical experience with recordkeeping operations spot issues that others miss. I'm interested in what you think about my idea for an element in an employer's QDRO procedures: Before sending an approval of a "live" order that the administrator believes is a QDRO, give the instruction to the recordkeeper. Next morning, check the system to see whether all the changes transacted. If all processed, put the QDRO-approval letters in that afternoon's mail. If anything didn't process, talk with the recordkeeper. It's likely that the recordkeeper's reason for not processing the administrator's instruction will reveal at least one reason for deciding that the order is not a QDRO. What do you think?

Belgarath, thank you for the further explanations. Count your writing here today as a valuable pro bono contribution, supporting mine, to a charity that's doing great things.

David Rigby, both of your observations are good. In formal terms, a recordkeeper doesn't preclude an administrator from doing something; rather, a recordkeeper chooses which service it offers (or doesn't offer). If an employer doesn't have big-plan buying power, what recordkeepers offer often is a practical restraint on what an administrator chooses. You're right that a service agreement would state the add-on services. My work as counsel to administrators is about employee-benefit plans with tens of thousands of participants and enough buying power to custom-negotiate each service agreement. But my inquiry here is about unusual work for a small plan, and they won't ask for the QDRO add-on unless I advise them that it's worth considering. So that's why I ask BenefitsLink mavens: Is a recordkeeper's QDRO-review service worthwhile? (I'm hoping to see the usual sharpness of different viewpoints.)

Belgarath, thank you for this super helpful information. So the only way an employer can get comfort about whether its document states a plan that (if administered according to its provisions) gets the Federal income tax treatment of Internal Revenue Code section 403(b) is to get its lawyer's or other practitioner's written advice?

So if either expense allocation is possible, does a recordkeeper allow an employer to specify which allocation the employer prefers?

If an employer in 2015 states a new plan by using a document that now is waiting for approval and later becomes IRS-approved, does the user get retroactive reliance on the IRS's letter?

Some 401(k) recordkeepers offer an optional service, for an incremental fee, under which the recordkeeper will review a domestic-relations order to decide (but for the plan administrator's rubber stamp) that an order is a QDRO. For those that offer such a service, does the recordkeeper allow the plan's administrator to specify how the expense is allocated among participants' accounts? Can the allocation be proportionate across all participants' balances? Does a recordkeeper require or permit an allocation of these QDRO-service expenses only to the account that is the subject of a division or proposed division? Does the recordkeeper provide an indemnity to stand behind the accuracy of its decision or recommendation? Is this kind of service worthwhile?

David Rigby, thank you for that reminder. But isn't the problem of an employer stealing participant contributions concentrated mostly in plans with few enough participants that an independent qualified public accountant is not engaged?

Belgarath, thank you for the information. Do you know which providers have submitted a document to the IRS?

We seem to have two votes for a non-fiduciary doing no more than informing the employer that failed to pay the contribution. Any different views?

Of the big 403(b) providers, which of them offers an IRS-preapproved prototype or volume-submitter document (or a document so intended)?

Should a recordkeeper or TPA try to get an employer to pay a past-due participant contribution? A recent BenefitsLink forum topic shows how the duty to collect a contribution often is set with someone who decided not to pay the contribution (or his or her subordinate). http://benefitslink.com/boards/index.php/topic/57803-special-trustee-responsible-for-contribution-deposits/ Imagine that you’re such a plan’s recordkeeper or third-party administrator (and you’ve designed your business to be non-fiduciary at every turn). What do you do if a participant contribution is long past due and has not been paid to any trustee, custodian, or insurer? Is it okay to make no effort to get the employer to pay the past-due contribution? Or should you “do something” to try to get the employer to pay? If so, what is the “something” you do?

AndrewZ, thank you for the helpful information. Is the condition that the plan must specify a natural person as the "special trustee" stated on the Adoption Agreement or in its written instructions? If so, I might seek more information about whether the Internal Revenue Service requires adherence on that point as a condition to reliance on the IRS advisory letter. If the condition is not so stated, a user might consider and evaluate the possibilities.