Erik Read

I've seen several structures. In a daily environment, with support staff, the average seems to run at about 50 plans maximum per service "team". In a non-daily environment, the complexity of the recordkeeping plays a roll. For instance - say your doing quarterly valuation for 200 lives with FBO accounts - one or two of those would bog down an admin in a heart beat! On an annual basis - just admin and reporting (no recordkeeping) I used to manage 150 active plans with revenue in excess of $250k - my salary at the time was $29k.... (that's why I'm no longer working for that firm). They have since seen the light, and changed their consultants compensation to a percentage of existing billings and new plans sold. Another way to determine the work load - have the admin's track their time spent for a month or two, be sure that you have the understanding that the information is for statisticall review, and won't count against the employee. Also - only have them track time in 15 minute increments - the 5 minute call to the wife to discuss what's for dinner - doesn't count! I think this is a great discussion. I know in my current roll, I perform "Due Diligence" on TPA's along with the completion of RFP's for institutions, and my Q&A section on case load is about a half page long.

I think what we're trying to say that a "loss isn't a loss until sold" is that regardless of the value you still hold the same # of shares which tomorrow may be worth more than today and yesterday combined (let's hope!). As for a 16 week "quiet period", that's a little long - I'd also like to know if the investments were liquidated or as mentioned if they were "mapped". Most plans that are "mapped" to similar investments are done so in order to lessen the "quiet period" - so even an 8 week period would seem long to me. Do this - contact HR, ask what has been the cause of the delay. I'm suspecting that the delay is in getting information from the prior vendor/recordkeeper - that is who you would want to report to the DOL, not neccessarily your employer. Keep us posted on this - I like to follow these issues. Thanks.

As the trustee - will you also be the "named fiduciary" in the documents. That is the real question. As a fiduciary you will have unlimited PERSONAL liability for any breach that may occur - under your doing or anyone else's. I agree that more questions need to be addressed, position with the firm, why your being asked, what type of insurance the employer is going to carry on your behalf and on behalf of the plan, and what decisions they're asking you to make. Get a copy of the trustee powers in the document to be sure you know what's being asked of you. DON'T take this lightly - it's a very big undertaking.

Okay - check the brief today - Principle just came up with a link for TPA's. In partnering, what I mean is, your firm would do admin, docs and filings, and partner with a "recordkeeper". Principles new platform does just that. There are numerous others out there, and I know of a few TPA's that have the systems in house, and will provide their recordkeeping - including the web and VRU - to your clients, along with a no-compete clause to your firm for the admin and docs. Trustmark by the way - is now officially Schwab Retirement Technologies - so picking up that software bundle will put the Schwab name into your program even if you don't use Schwab for the investments. More food for thought. If you'd like more info - shoot me an e-mail privately - I'm usually against touting a provider on the boards - I only mentioned Principle above because they're in the news today. Good Luck!

Why? Kidding - there are a few good sites out there that you can affiliate with, for the VRU and Web interface, I'd look at "partnering" with other sites before putting up the capital to create your own. Call a few TPA's that you know that run the same structure (hopefully outside your competition area) and ask them what headaches you might be able to avoid with their insight. Aside from that, and this web site - not sure of anyothers that you might be able to use. Good luck.

In the my past life as an admin, we held the surplus in a suspense account until the next year - need to be sure and release in the next plan year though - we had a few that went without relase until review by supervisor - had to make some swift changes. Be sure you somehow flag that plan for careful review in the next year.

I just read that the extension does not apply to minimum funding standards. Only to tax form filing deadlines.

Not only too much into insurance, but ask your "advisor" what he makes off the insurance policies - that's a windfall for his pocketbook! I'd agree with the open retirement plan/account through your business, but I'd get together with a local actuary or TPA, and have them run some numbers for you to see what you can get into a plan comfortably each year. With the new tax laws, single employer business have some substantial options available to them. Once you see what you can sock away, then decide where to put it, and discuss in more detail with your "advisor" or a new advisor how to do the investments - I'd try to stay to "No-Load" mutual funds. And pay attention to the expense ratio and "12b-1" fees that the advisor may get a portion of. Good luck.

My understanding of a master trust is that it's sponsored by a custodian, not a specific plan. A master trust is established to hold the assets of several account holders. Not sure I'd believe the auditor - I'd get a second opinion - unless someone else can help shed some light on the subject. Also - commingled funds for pension and profit sharing plans, are not the same as "commingled trusts" those are an type of trust as well, that require a seperate trust document to be adopted by the plan in order to invest in them. Hope that helps.

I would have to agree with AndyH. While our advice may be based on years of expericence with similar cases, whenever a very serious issue arises, I always refer to an ERISA attorney. Please - for your safety, contact one, and discuss the issues presented here. Good Luck.

Actually - I believe all the reg's say "May be relieved of liability" the reg's don't gaurantee it. That's one of the big issues with 404©. It's open to interpritation by the field office and the DOL. Depends on the one piece you may be missing. You're correct though in that there isn't a section that says if you don't meet the requirements you won't be protected.

Wessex - your right. Don't know what I was thinking about. Vesting is were you can limit the beginning period, not for actual service. Thanks!

The document can specify if years of service prior to the plan effective date will be considered or not. Some formulas are based on service, and the entry date can have an effect on the contribution(s) the employer may need to make at year end. In most cases though - yes, the participant would be immediatly eligible to enter the plan.

What is the correction? If the deposit was made in 2001, prior to 4/15, it can be counted for both the 2000 contribution and for 2001 - made in the tax year... outside of that, I would agree, correction needs to be made by filing deadline.

Not sure if it's gone through, I know that I wrote my local reps to oppose the passage. Haven't heard the outcome yet.

Consider this - forfeiture assets become property of the plan at the time of distribution. At that point - the trustee's become responsible again for those assets - and we fall back to the "prudent man" rule. I think the answer to your question is, what would the prudent man do with those assets until the again become participant directed? From a fiduciary standpoint - I would hope that the funds available in the plan were considered prudent to begin with, so I wouldn't have a problem leaving the assets in the existing funds, on the other hand, if the assets remain are/were part of an individually directed "brokerage" account, and the trustee's had absolutly no influence on the stocks choosen - I would move the assets to a "stable value" or money market fund. Don't forget - ultimatly, someone has to be responsible for the assets - and if the participant is no longer able to direct them, then the trustee becomes the fall guy. Good Luck.

I believe it goes to how you want to defend your actions under audit. Personnally - partners in a partnership that loses money - I would still consider "earning" money. They usually have a monthly draw equivalent to a salary, and at the end of the year, the partnership show's "-" K-1 earnings for tax purposes. I would still say that you should grant them a year of service for vesting. Minimum wage is a good measure, but I know many a "spouse" that does recordkeeping or works hours for the firm but draws no income. The other "spouse" draws the earnings. If you don't want to credit her the service - just be sure you have your ducks in a row to explain under audit - if the plan gets audited (that's the golden rule!) Good Luck.

How is an hour of service defined in the document? Most that I have seen state "an hour worked in which the individual is entitled to compensation".... so IMHO I would say she has no prior service with the company - this is the first time she's been "entitled" to compensation for her services.

Another example of "true-ups" is for a company that contributes matching or Profit Sharing with each payroll, at the end of the year, the %'s can be off, and need to be "trued".

Good point - the advantages are different from a corporate view, then from a partnership/sole-proprietor view, and even different if you're trying to show the "human" side to present to a potential employee. Each plan has its intricacies and some may be more favorable than others. For instance, I'd much rather promote a 401(k) Plan where the employer matches contributions on 2/1 ratio than one that has not historically ever made a matching or discretionary contribution to the plan. Give us some parameters, and we'll try to help you with your research - i.e. - large corporation (1000+ employees) vs. small professional practice with 20 employees. Good luck.

If the loan from the sponsor is from the individual, and has nothing to do with the plan, and could be shown as a "business transaction" for the company books or the individuals accountant, then the plan isn't involved.

Carol - what do you do then in the event (as sometimes happens with Mutual Funds) they change a price for a date a month or more after the fact? I can think of at least three fund families that are notorius for changing prices more than two weeks in the past. One such change was actually almost 90 days after the fact.

Thanks - that's the confirmation we were looking for. I think we also had some "symantic" situations. The tax code referres to a "traditional" IRA, which as you stated is either a contributory or conduit IRA, our B/D considers a "Traditional" IRA to be a contributory one, and a "Conduit" IRA as just that. So, in this world - misconception is the root of all evil. Thanks again!

404(a) discusses timeing of contributions for deductability, I'm not sure if it address specifically non-profits, but it may address 501©(3) status corps. Read through and see if it has the answer you need.

Great - thanks for the cite. Next question is - since the spouse is eligible - we've established that, what about the Trad IRA vs. the Conduit IRA situation? Our Broker/Dealer - clearing firm, states that QDRO distributions must go into a Trad IRA, and my understanding is that once assets have gone into a Trad, they are no longer eligible to roll into another qualified plan - at least not without a lot of paper trail to show that no after-tax assets were contributed to the IRA.