Dave Baker

I apologize for springing the new version on an unsuspecting world. The vendor of the software rolled out the new version and emphasized that it's a security patch as well as containing some new functionality. The new "look" was unfortunately not optional to me in doing the upgrade, but the vendor believes it's easier to read and to use. I hope you'll agree. I know that I, and most people, hate adjusting to changes, but here we are. And, hey kid, get offa my lawn!

Interesting. I wonder if the participant figured that income tax rates might increase substantially in 2021, so decided to take on the income taxes in order to take advantage of the historically low rates in the 2020 taxable year.

Could someone "restate" the question and the answer here, especially the takeaway point for TPAs?

Hadn't thought about it! A "collector's emoji" -- might be able to sell it at the flea market ? Thanks for everything you add to the message boards, which is a great deal!

@Effen -- "If you can't allocate within 5 years due to 415 limits" should read "If you can't allocate within 7 years due to 415 limits" ?

@FORMER ESQ. makes a good point: "When dealing with potential controlled/affiliated/management group scenarios in closely held businesses, make sure you have all the facts and ask all the relevant questions as it relates to family attribution." Is anyone aware of such a checklist?

I need to put a straightforward "Search" link somewhere on the BenefitsLink menu, in addition to the search box that's on the News page and most other benefitslink.com pages. Here's the URL I'll use -- you might want to bookmark it: https://benefitslink.com/search/ Here are some results on the OP's question: https://benefitslink.com/news/index.cgi/view/20200602-158620 https://benefitslink.com/news/index.cgi/view/20201124-162095 https://benefitslink.com/news/index.cgi/view/20200601-158582 https://benefitslink.com/news/index.cgi/view/20200602-158620

I am learning today that one can avoid the risk of anti-competitive price-fixing allegations by avoiding any discussion of fees whatsoever with a competitor. I'd never thought about it. It strikes me as odd that the law forces businesses to be so inefficient about providing customers with their products and services at the most competitive price. Instead of asking my competitor what he or she's charging so that I can charge 10% less, I need to see if I can find some clues in press releases or other publicly available documents, or get somebody to stand in for me as a prospective customer, or chat up one of my competitor's customers. If I communicated directly with a competitor about prices, I need to worry that somebody will allege that the communication was part of a price-fixing agreement. Live and learn! Thanks for the information. Links: Price Fixing (Federal Trade Commission) Dealings with Competitors (Federal Trade Commission) - "In today's marketplace, competitors interact in many ways, through trade associations, professional groups, joint ventures, standard-setting organizations, and other industry groups. Such dealings often are not only competitively benign but procompetitive. But there are antitrust risks when competitors interact to such a degree that they are no longer acting independently, or when collaborating gives competitors the ability to wield market power together." Spotlight on Trade Associations (Federal Trade Commission) - "One area for concern is exchanging price or other sensitive business data among competitors, whether within a trade or professional association or other industry group. Any data exchange or statistical reporting that includes current prices, or information that identifies data from individual competitors, can raise antitrust concerns if it encourages more uniform prices than otherwise would exist. In general, information reporting cost or data other than price, and historical data rather than current or future data, is less likely to raise antitrust concerns." What Every Business Should Know About the Antitrust Laws (Keeley, Kuenn & Reid law firm) - "Don't agree on and avoid discussing the following topics with any competitor: Prices, changes in or stabilization of prices, terms or conditions of sale; Prices, changes in or stabilization of prices, terms or conditions of sale ... If you are a member of a trade association or similar group, be sure competent legal counsel monitors the association meetings, programs and activities ... Don't exchange price information (or other sensitive business information) with competitors without guidance from company counsel. Be able to show that you obtained information on a competitor's prices from some source other than the competitor." I feel like I just fell off the turnip truck. Anybody else?

Discussing fees is A-OK by me --

Oh, 14.4k! Gawd, faster than a 9600, and already at 9600 one can hardly keep up with the type as it scrolls across the screen. Mine was a Practical Peripherals -- I can't bear to get rid of it. I'll take a photo! I remember my 2400 baud modem, which had a little green light on the front that lit up behind the silhouette of a rabbit, when the modem was able to negotiate a 9600 baud connection with the other modem! High-speed, man, look out.

Aw. I hadn't heard about Janice's death. How sad, and what a loss to the industry.

Hey, fellow old-time pioneers! You'll enjoy this file. one-you-will-remember.mp3

We haven't had RFPs posted here before -- interesting! -- wondering whether users of the message boards would find it valuable to see these more regularly (please do not delete this message thread).

Haw! I was only referring to the way Derrin seemed to be able to know what was in your mind!

Derrin, I'm thinking of a number between 1 and 10 ...

Is Larry OK?

We're proud of our search engine -- something to try is "Puerto Rico" as a search term -- https://benefitslink.com/search/index.cgi?textQuery=Puerto+Rico&sort=2&level=all_words&datasource=MYDB

Via ERISApedia.com, you mean?

If you are suddenly having trouble signing in because, when you click on the words "Existing user? Sign In," you see a "Sign In" box only for an instant such that you can't enter your display name (or email address) and your password, please let me know. Dave Baker -- davebaker@benefitslink.com

Great point, Gruegen! This related piece was published by a law firm just yesterday; will be in today's BenefitsLink Retirement Plans Newsletter: "Rehiring Employees Terminated Due to COVID-19 by the End of the 2020 Plan Year May Help Avoid a Partial Plan Termination" https://www.bsk.com/news-insights/rehiring-employees-terminated-due-to-covid-19-by-the-end-of-the-2020-plan-year-may-help-avoid-a-partial-plan-termination

403(b) plans?

"What you need is a third-party administrator." -- "A what?" "A TPA." -- "I'm still clueless. I have an investments guy and a mutual funds company that says they'll keep track of where my company's retirement contributions go. What's a TPA?" ===== Wouldn't it be great for business development, and more appreciation by plan sponsors, if there were a better name for TPAs than "TPA"? On your marks, get set ... GO.

I am thinking that the employer probably would need to make SEP contributions regularly in order to support the bona fides of the "plan" for purposes of having it be a retirement plan that supports employer-deductible payment of investment adviser expenses, which might kill the idea in this particular arrangement (where the business owners are looking for cost-savings and don't plan further employer contributions at least for a time). Might be too aggressive to simply terminate a 401(k) and then have the employer merely sign a SEP agreement that turns nondeductible (if paid by the IRA owner-shareholder-employees) investment advice fees into deductible expenses when paid by the employer. But hey, it's a tax-deductible "concept" so maybe we can name it, then put "(tm)" next to the name, and sell it! :-) In lieu of the SEP mechanics, I am thinking another solution is to throw in the towel (maybe just a hand towel) and have the investment fees paid directly from the IRAs. It turns otherwise taxable (at distribution time) funds into tax-free "go poof" dollars, which is nice, despite the loss of the future potential tax-deferred earnings on those dollars. Plus, depending on the age of the owners, maybe the lost future compounding (losing a couple of decades rather than losing many decades' opportunity) isn't all that big of a dent. Really appreciate your ideas and information, Luke! You're a gem.

Employer (an S corp) has two owner-employees who participate in a tax-qualified profit-sharing plan. The corporation directly pays an investment management fee to an RIA (a percentage of the plan's total assets, usually about $12,000 per year), rather than having the trustees pay the fee from plan assets. Employer pays about $1,200 in administration fees for the preparation of Form 5500 and other administration services. Employer pays for an ERISA fidelity bond for the plan's trustees (who are the two owner-employees). COVID-19 occurs, with general chaos and substantial drop in revenue. Employer looks for ways to save costs. Idea: terminate the profit-sharing plan in order to stop the annual administration fee (no more Form 5500s). Also avoids the need to pay ongoing cost of the ERISA fidelity bond. Employer says it isn't wanting to make further contributions. So each employee-participant takes his or her account balance and rolls the distributed assets into an IRA at Schwab (for example). The sun comes goes down and the sun comes up. Employer sets up a new SEP arrangement, which covers all employees (being only the two owner-employees), using a document provided by Schwab (for example). The employer probably will need to set up two new IRAs at Schwab, but maybe Schwab will be happy to use the two existing IRAs. Drum roll, please ... Can the employer pay the investment management fees of the two IRAs (or "SEP-IRAs," if you prefer), and have the payments be deductible to the corporation and not counted as income to the SEP participants? On the one hand, it is an employer-sponsored retirement plan of a sort. So, like investment management fees on a profit-sharing plan's trust that are paid to an investment adviser directly by a plan sponsor, the payment of the investment management fees on the SEP participants' accounts arguably is similarly deductible. On the other hand, there is no trust once the employer has made the contributions to the employees' IRAs. If the employer doesn't pay the investment management fees, the employees certainly could pay the investment management fees for their IRAs out of their own pockets, but such payments for managing an individual's investments are no longer deductible due to recent legislation. (Or they could have the fees deducted from the assets of the IRAs, which happily avoids income taxes, but which takes away funds that otherwise would generate compounded investment returns inside the IRAs.) So they'd probably opt to keep the plan running because the ability to avoid about $3,000 in income taxes on the $12,000 paid by the corporation would offset the administration costs and the cost of the ERISA fidelity bond.

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