Gadgetfreak

Forgive me for placing this post in this forum but the Relius forum doesn't seem to get as much activity. I can make a reasonable argument that it belongs here anyway so here goes: We use Relius for daily val. Now that there are such stringent requirements for electronic delivery of 404a5 notices, to fully comply with the letter of the law, it would be easiest to mail statements. Dealing with electronic delivery to terminated participants is very difficult. So I am looking for a printing company where I can batch send my Relius statements and they can print, fold, stuff, stamp and mail out. There must be other recordkeepers that do this. Potentially, I can use this for my annual 404a5, QDIAs, SH notices, etc. as well. Does anyone have any ideas? Thanks.

So it has been 7 months since my last post. I think I am one of FTW's biggest fans. As I stated before, I started using them for 5500s when I left Relius in 2009. I liked them so much I started using them for 1099s. Then documents (I used to use Accudraft). And now, just 2 months ago, compliance testing and annual vals (I used to use Blaze) as they updated what I needed for it to work for my needs. Their support is TOP NOTCH. Although I remain concerned that it might get worse now that they were taken over by WK, I have not seen any indication of that to date. They are so helpful and go above and beyond to answer technical questions that are not necessarily software related. Janice is amazing in her patience and fast response in training and helping teach Admin. They have a few JDs on staff too who are so nice and helpful. Their web interface is not that "prettty" and could be a bit more functional (i.e. switching Plans in admin requires going to the home screen and then selecting client, plan, admin - so 4 clicks) but it is extremely user friendly. They know they can improve and I am sure they will at some point. Having all the software integrated is really nice too so you don't need to duplicate (though you may have that already with Relius). Their pricing is very competitive and I hope they don't get too greedy after their acquisition. All I can say is that it is really a pleasure to work with them. I feel that they are my partners, not just a vendor, and they treat me really well. Almost like we are one big happy family. The fact that their "giveaways" at the ASPPA conference weren't that great shouldn't deter you . They did offer massages though. If you need any specifics, PM me. So far, as you can tell, we are extremely happy.

As an independent recordkeeper (on Relius) who just sent out the quarterly participant statements including the one-page attachment at the end with the actual fees charged to the participant accounts, I realize we are at a complete disadvantage compared to the major recordkeepers with revenue sharing arrangements. They only have to disclose those once a year and buried in an extremely complicated notice which I am sure no one will read. But then their quarterly notices (which are easy to read) show a much lower fee than ours which are generally a pure asset-based fee. For those fellow TPAs who are also recordkeepers, how are we going to compete and explain everything when thousands of participants come banging on their employers' doors?

I don't mean to hijack this thread but I was just thinking of something today that is (loosely) related to this topic. I believe IRS Notice 98-52 says that matching contributions to a safe harbor 401(k) plan must be deposited no later than 12 months after the close of the plan year. Putting aside deductiblity issues, what happens if the Company doesn't make the contribution by 12/31 of the following year? Is there specific guidance from the DOL or IRS? I assume they need to make up for lost earnings. Is there also an excise tax with a 5330? Can they still rely on the safe-harbor to pass ADP? Thanks.

ESOP: I put in an information request to PBI. While I wait, can you please tell me how they get paid their fees (and what are the fees)? Thanks.

I agree that the DOL says to use IRS or SSA Letter Forwarding Services. We can also assume that they won't be that quick to update their guidance now that the IRS service shut down. In the IRS announcement, they said they were shutting it down because "...numerous alternative missing person locator resources, including the Internet, have become available to assist a plan sponsor or plan administrator in locating a missing participant or beneficiary owed a retirement benefit...". So this begs the question: Can a Fiduciary rely on OTHER methods for best case efforts to reasonably locate participants (seeing that the IRS is no longer an option and the SSA is prohibitively expensive)? After all, it is just going to an IRA anyway. It is not like they are taking away money from these participants. Also, I just spoke to a rep at one of the rollover companies who said that they believe the Letter Forwarding services were only to be used for terminating Plans and you could do an IRA rollover for a terminated participant in an ongoing Plan by just sending out a regular (non-certified) letter and waiting 30 days - assuming it wasn't returned. That is a bold approach.

I am sure you can but that gets complicated and cumbersome. Also, $35 for a $1000 balance (for example) is a bit excessive when adding our $100 fee already.

Thank you for all the responses. I just want to clarify. We have never allowed for a terminated participant to roll OUT a loan. The receiving Plan is asking if we can amend our Plan to allow it. We have a "relationship" with both Plans so I don't just want to tell the new Plan a straight out "no". On the other hand, I don't want to amend my Plan just to accommodate on person. So I am trying to figure out if there is any provision that is set in a Plan Doc to allow or disallow this. I would prefer to just tell the new Plan that our Document doesn't allow for that type of amendment but I would prefer to know the truth. I haven't found anything yet. Thanks again.

I agree about the receiving Plan. But are you aware of any provisions that can be made on the original Plan's side? I don't see any options in the Plan Document to allow for this. Then again, I don't see any options that allow for the Plan to RECEIVE either (though I thought I saw those in the past but I can't be sure). Thanks.

A terminating participant has an outstanding loan. He doesn't want it to default, doesn't want to pay it off fully and there is no provision to continue paying after termination. He is rolling over the funds to a different 401k Plan. Is there any provisions available in the original Plan that would allow this to occur? I haven't been able to find anything. Thanks.

We used to give sponsors who wanted to force out terminees with balances (and breaks in service) the following: 1) We can force out anyone under $1,000 without consent as a direct distribution. 2) For those between $1,000 and $5,000 (our Documents are set up with a $5k limit), they need to first send out certified mail. If it comes back as undeliverable, they need to use the IRS service. If they don't hear from anyone after 180 days, they can do an automatic rollover. We helped process with Penchecks. Now that the IRS no longer has their free service and the SSA letter forwarding service is $35 (I think), what do you suppose is the best procedures to offer my clients? Do you think I can simply replace the IRS service with the employee locator service? I thought the DOL specifically mentioned using IRS or SSA. I am not sure you can just replace with another service and still do an automatic rollover. Is there any definitive information on what to do now? Thanks.

We have so many different systems and barely any of them talk to each other. We use a custom designed client management system, a document management system (with workflow), QuickBooks for accounting, Minute7 for time management and a plethora of actual 401k software (Relius, FTW, Blaze, etc) depending on the type of Plan and our services. I did look into Renee Conner's new service, www.pensionpro.com, and was VERY impressed. As I have so much invested in all this other software, it wasn't cost feasible for me at this time. But the system looks good. I think it will be a valuable resource to many TPAs.

Agree about their support. They are one of my favorite companies to work with. But I didn't even need them. I figured out I needed one of the questions answered differently for it to show up. In any event, I am not so impressed with their template and was looking for something more robust. I just purchased the $500 package from http://www.pensionpodcasts.info/. I will let you know how it is when I get it (hopefully today).

You are going to get upset even more when you see what the disclosures look like. I just reviewed Hartford's. They aren't "disclosing" anything. 15 pages of pure rubbish. No 12b-1 fees being disclosed. It seems they are relying on the original regs for this year and aren't even disclosing the wrap fees - only the existence of them. As a recordkeeper, I was hoping these disclosures would level the playing field. I am sad to report that it is just getting everyone upset and not doing much else. Hang in there everyone.

We use FTW! I didn't even know. I can't find it but I will just e-mail their support. Thanks for the heads-up.

We are a TPA for many Plans that have only Self-Directed Brokerage Accounts (SDBA). Almost all are places with one advisor and is like a "retail" account. Q&A 39, which was just added, now says that these investments are not DIAs and therefore do not require the fund expense information in the annual notice. HOWEVER, there is still some other information that must be included (like website, 800 number, etc for making trades, info about SDBAs and other things). Does anyone have a template of what these 404a5 Annual Participant Notices should look like for SDBA-only Plans?

We get a PDF report directly from Relius. But, if you are not a recordkeeper, why aren't you relying on the recordkeeper for the fund expense info? Why do you need to do it yourself?

Same here. We bought the Relius add-on. I believe Newkirk has a solution too.

As promised, I am reporting back from the Relius Summit in FL. I attended an "Ask the ERISA Experts" session today with Robert Richter (president of ASPPA) and Stephen Forbes. They said that the actual regulations state that you just need to give a description of the fees without the actual asset-based percentage. HOWEVER, FAB 2012-02 Q5 says that, if you know the amount (or percentage), you need to supply it. Many providers are relying on the "good faith effort" clause to simply follow the regs and not the FAB (possibly because their systems were already designed before May when the original FAB was issued). But everyone believes that systems need to be updated for next year to actually put in the percentage. On that note, I also confirmed that the NEXT 404a5 annual notice needs to go out no later than 12 months after the first. That means you could do it by 8/31/13 or earlier if you want to incorporate it with other processes in your office. For example, I am considering sending the same exact ones out again in November 2012 when I send out QDIA and SH notices so that all notices can be together. Finally, they confirmed that Plan specs do NOT need to be included in the annual notice. American Funds seems to be adding it to make their notices look "pretty". I hope this helps.

I am at the Relius Summit in FL now and will be attending some sessions on this and see if I can get more information. I think we all agree that you need to include participant-initiated transaction fees and their actual costs (I.e. loan initiation, distribution, etc.). What remains to be clarified is whether you need to give the actual percentage or dollars of asset-based recordkeeping fees and other actual dollar amounts/percentages OR if you just have to explain that the fees exist and explain what they are for. Expertplan did NOT give their asset-based fees on their 404a5 annual notice. It seems to be mixed what the other big firms are doing. And, I am still trying to find out what General Plan Info means for these notices. Is it actual Plan provisions or just generic info about voting rights, etc. I will let you know what I find out.

Austin, you sure you aren't supposed to fill in the amounts on the JH notice?

So now you have me totally confused. JH is giving the specific fees. Others are not. Austin says it is not required. But the ASC Notice seems to say otherwise. My emotions are on a roller coaster. The only good thing about this is the DOL's "best-efforts" comments. Though I hope that is not what everyone else is relying on to do a half-a** job with 404a5.

In "board" talk, people will say you just "hijacked" my post . That's OK. I don't hold a grudge. Your first paragraph seems to say the opposite of what has been stated here. 408b2 gave the actual basis point fees. 404a5 seems to be more generic. As for JH, they seem to be the worst of the bunch, though none are great. IMHO, recordkeepers shouldn't be passing on any work to the sponsors except for distribution of the notices. THEY have the fund info and know all the fees being deducted. And they DEFINITELY shouldn't be suggesting to the Sponsors to contact their TPA for help (since they should do it themselves).

I am an independent recordkeeper using Relius but also a TPA with the big firms. Relius has a module that we licensed which easily spits out the fund information and glossary. We have standard fees for loans, distributions, etc. that are already built into the reports and we were going to add the fees that are not standard across all Plans (i.e. the asset-based fees). If I don't have to do that, I just saved a week of work. But how do you explain the discrepancy with ASC's explanation? As for 3(38), I actually work with a few advisors who have that designation. I am asking because ExpertPlan has a line that either says: The Plan does not have a Designated Investment Manager. Or The Plan's Designated Investment Manager is John Doe. I wonder if this is a requirement. If not, I can go to the beach next week as that will save me another day .

Wow. Thanks for your reply. This certainly makes things much easier if I just tell everyone you may be charged fees of this and that which are for this and that (and not tell them how much). I was concerned because I read in a ASCi Alert from 7/15: "ASCi Insight – Administrative fee disclosures may be expressed in terms of a monetary amount, formula, percentage of assets or a per capita charge. If the fees are know at the time of the disclosure, the explanation must identify the service (e.g., recordkeeping), the cost of the services and the allocation method. If the fees are not known at the time of disclosure, an identification of the services that are expected to be performed and the allocation method ordinarily used is sufficient disclosure. If administrative fees are paid using plan forfeitures or general employer assets, no disclosure is necessary." I understand about the fund information and expenses and I am including that. Final question, do you think you need to list the FA by name? Does it change if the FA is a 3(38) Advisor?