Benefits 101

Staffing agencies aren't going to be affected THAT much. They have the variable employee counting methods they can use and a 60% plan isn't that expensive.

I think we've gotten off topic. There is a difference between the advisor providing recommendations and the Plan Sponsor creating a menu of choices. Many non-ERISA plans run "open platforms". Joel, if you'd like more info about this subject, I recommend you open up another thread. I also think you should read the Fiduciary standards code for the state you work in as well if you are interested in working with Non-ERISA plans.

Actually Joel, QDROphile is right. Remember, this is an ERISA exempt organization. By doing what you seem to feel is "right" (i.e. make an investment menu"); the plan sponsor would be subject to my state's fiduciary laws (i.e. PA), which really do not apply to ERISA exempt plan sponsors unless an attorney wants to practice some legal theory and extend the degree of care section. But I think that would be a stretch. By NOT making a menu, it is more prudent if you are considering fiduciary responsibility. Furthermore, Joel, I think you are forgetting some of the requirements for ERISA exemption... including NOT directing participants to any particular investment. Which the creation of a menu would entail. However, I am comfortable with the big F, but I will probably avoid making a formal menu. Why add liability, as remote as it may be.

I plan to give a "recommended list" to people or "funds to consider". Mostly Vanguard index funds and some smaller funds I like. But the options are there for people who want them. I tend to define freedom as options... and I don't like eliminating people's freedom.

ETF's register as unit investment trusts and therefore are eligible in 403b's. Most TPA's don't allow for intra-day trading though, or charge the client extra for that feature.

Yes. The plan sponsor didn't want me to limit the menu.

Any one of the 26,000 available mutual funds as well as ETFs. You should be able to look the expense ratios on Morningstar. If the fund exists, you can invest in it.

Yes it is. I often wonder who is getting "hooked up" in those situations. I found an open platform... so employees can invest in any of the nearly 26,000 mutual funds in existence as well as ETF's.

Not exactly. 403b or any employer retirement plans are more expensive to maintain than IRAs because of the compliance requirements, IRC, Sec rules that apply. All plans need TPAs , tax advisors and some ERISA plans need accountants to prepare annual repoorts. Minimum admin cost are about .50%. Problem is that low cost providers such as VG and TIAA/CREF are only interested in plans that have minimum assets of more than $1M because they need to generate enough fees to pay for the cost of compliance and TPA. Ins co will take plans with smaller amounts of assets because they charge higher fees which are passed along to participants. You may be able to get some leads by going to 403bwise.com and asking your question there. Thank you! The 403bwise tip was great. I found exactly what I'm looking for... a flat $40 per year + 15 basis points isn't bad for a 403b plan.

Not exactly. 403b or any employer retirement plans are more expensive to maintain than IRAs because of the compliance requirements, IRC, Sec rules that apply. All plans need TPAs , tax advisors and some ERISA plans need accountants to prepare annual repoorts. Minimum admin cost are about .50%. Problem is that low cost providers such as VG and TIAA/CREF are only interested in plans that have minimum assets of more than $1M because they need to generate enough fees to pay for the cost of compliance and TPA. Ins co will take plans with smaller amounts of assets because they charge higher fees which are passed along to participants. You may be able to get some leads by going to 403bwise.com and asking your question there. Thanks. But it is ERISA exempt in public schools (i.e no discrimination testing, no 5500)... they have a separate TPA they pay (just for loan tracking), they have separate accountants they pay, etc... the vendor... does NOTHING besides recordkeeping and custody. Essentially, it is no different than the work they would do with a TPA . The vendor does NO compliance in these ERISA exempt accounts. But the fees stay in there.

Thanks guys, its nice to know the "escalation" process for something like this.

Ok, that's a pain. We call them together, they say they'll mail the paperwork, but never do. That's the game they play. Me, "I'd like to request this paperwork in writing"... them "No, we only do it over the phone". Hence, they can always claim they never got the request, and never send the paperwork.

I've been trying to move a Mass Mutual VA SIMPLE IRA account into an IRA held by my BD. We fill out the paperwork and send it off. However, Mass Mutual refuses to move the assets, and they will not give a reason. I am guessing that they want the request on their own paperwork? Can they do this? The client made a request to move the funds, yet they are refusing.

For ERISA exempt public entities (such as publicly funded charter schools), who is a good vendor that can be used? I am an advisor desperately seeking a lower cost option. All that is out there are high fee VA companies & Lincoln Investment Planning who puts a 1% wrap on their plan. These non-ERISA 403b accounts are just as easy for these companies to maintain as IRA's are, yet IRA's come with $20 or lower yearly account fees. Anyway, anyone know of a good low cost vendor for ERISA exempt plans?

If an employee only paid in $500 to her medical FSA, used up her entire $5000 election (i.e. for 2012, the limit is still 5K), then left employment. Does she have to report the extra $4500 she withdrew from her FSA (i.e. the portion above and beyond her contributions) as taxable income?

A former employee owes premiums for December & January. He sent in premiums for one month, but still owes for January. He wants to be retroactively enrolled for December only. Can we do this? I thought we had to wait until all COBRA premiums in arrears were paid to re-enroll him.

A terminated employee is saying they sent in COBRA premiums. However, we never received them. In previous communications via email, the employee said they were going to wait to elect COBRA since they had 60 days to do so. The 60 days passed, and now they are saying they want to be enrolled. They say they sent in the election notice and premiums before the election period ended. Everything I have on file says that they didn't send in the notice. Anything I can do here to enroll the employee into COBRA? It's just here "word" that she sent it. Thoughts, advice?

This is a new animal for me... an employer wants to provide flex credits that can be used towards individual health / dental insurance (they have no group policies) as well as have the flex credits be available for standard FSA expense (such as RX, and copays, etc)... as well as have a cash out option for the flex credits. To spice it up a bit, they want to award the flex credits to the tune of $2 per hour worked. It seems quite complicated and I'm not sure if it is doable. How do employees make elections if they're work hours change week to week? What if their individual insurance premiums change in July, but the plan year starts in January? The individual health insurance thing and the varying flex credits earned on a week to week basis is problematic for me... I can't quite think it through and how they would fit in the framework.

Effective date is 8/1/12. They were told to get it signed ASAP but they slept on it (its a 3 person company). The President did sign off before 8/1/12... its just the board resolution to adopt that is 47 days late.

9/17/12, or 47 days after deposits were made

An employer started making contributions into the Plan on 8/1/12. However, they just had the board meeting and signed the board resolution to adopt. There have already been contributions made. Anything they can do? Can a board resolution to adopt be made retroactively?

Why do you say "Not if the proposed implication is that one is an ERISA plan because of a match and one is not an ERISA Plan"?

TIAA CREF won't do ERISA plans. The employer wants to contribute monies, which makes it an ERISA plan. The ED wants her money in TIAA CREF. So the choice is, either the ED just keeps her plan and non of the other employees get to have the employer 403b monies (the employer wants to contribute 6k per year per employee, no vesting, etc... generous contribution), or the ED has to lose her beloved TIAA CREF 403b and roll it out into an IRA or whatever. Or have 2 plans, one that will stay with TIAA CREF and be non-ERISA because it only accepts employee funds (at least TIAA CREF is claiming their 403b is non ERISA), and one that will be ERISA and accept employee & employer monies. This is JUST because the ED wants her beloved TIAA CREF account. It serves no other purpose. PensionPro, I don't know if that is a permitted exclusion, is it? You'll probably know better than me. P.S. Hiring a TPA and including both vendors under one 403b work?

Maybe... I read it as (http://www.law.cornell.edu/uscode/text/26/410) as saying "participation" is required. Participation isn't being denied, just added benefits. Let me know if I'm looking at the wrong thing here or if you interpret it differently. I just don't read anything excluding that. Participation isn't being limited, just the extra match. Or maybe we can do the extra match based on "years of eligibility" in the spirit of vesting standards?

So the FSA plan document allows medical FSA eligibility with 2 hours worked per week. That said, what if one is making minimum wage and elects to have the maximum 5k withheld from the paycheck? There isn't 5K to be withheld working only 2 hours per week. Also, what about a situation where there is a change in status from full time to part time? And then there is not enough wages to cover the FSA deduction? Is the employer "on the hook" for the difference?