Peter Gulia

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?

What about requesting the plan's whole actuarial valuation report, so you can read all the assumptions for yourself? (Or am I missing the humor in something you already understand?)

The Treasury department produced a nice bit of guidance. The idea of looking to a Form 5500 report to presume that a plan is intended to be tax-qualified is smart. What do BenefitsLink mavens think about these remaining questions: Is the Revenue Ruling's method inapplicable if the distribution to be rolled over was paid from a governmental plan or non-ERISA church plan that has not filed a Form 5500 report? If 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?

Lame Duck, don't rely on the Labor department alone. Even if what you heard might be a correct interpretation of ERISA's Title I, the Labor department lacks authority on the issues of whether a trust is a U.S. or non-U.S. trust, and whether a non-U.S. trust might tax-disqualify its plan. Get your lawyer's advice. And ask your lawyer whether an Internal Revenue Service ruling or determination might help.

Jim Chad, A Shot in the Dark, and QDROphile, thank you for your observations. Does anyone have any experience, good or bad, with PENSCO Trust Company?

If the plan's fiduciary retrieves the prospectus from the investment fund's website, it might be truthful to say that the fund itself furnished the disclosure information. Following this, the Schedule C could report the name and address of the fund.

Leaving aside issues about the wisdom, legality, or tax effect of an IRA that is "self-directed" to invest in real property or other unusual investments, which trust companies would you suggest (or avoid mentioning) to someone who has decided on this form and kind of investment?

Is the 403(b) plan a grandfathered defined-benefit or money-purchase pension plan?

Buckoosier: No, this kind of internal-consistency check is not new. Even before electronic filing, it sometimes happened. In my older experience on this point (I haven't had a client stumble on it in recent years), the Labor department expects to see a change in at least one of the ending and opening values, or to see a financial-statements explanation.

Sometimes, the person that furnished the disclosures that allow an indirect compensation to be treated as eligible indirect compensation is not necessarily a recordkeeper or similar intermediary but might the fund's distributor or transfer agent, or even the fund itself.

If a plan's administrator were to decide that the "nothing" DRO is NOT a QDRO, what unwelcome consequence (if any) would follow from that decision?

To respond to Dennis Povloski's query about what (if anything) the employer must pay concerning interest payments, what do BenefitsLink mavens think? Must the fiduciary that breached (by failing to administer the plan according to its terms), restore the plan's losses that result from the breach? Or is it enough that the employer regularly pays in at least a minimum contribution based on what the actuary reports as necessary to fund the plan's benefits?