Belgarath

This subject does make for interesting conversation, doesn't it? (Maybe only interesting to us ERISA geeks...) And it brings up some issues that weren't discussed - suppose the Revenue Sharing is paid directly to the TPA. Not to an "ERISA account" in the plan. If, as asserted above this excess is a "Plan Asset", the moment the Revenue Sharing exceeds the TPA fees, does this make the TPA a Fiduciary? Is the TPA then responsible for investing the assets under Fiduciary standards? If this has gone on for several years, does the TPA then owe interest to all participants for those years? Etc., etc. I'm inclined towards Austin's point of view - I fail to see that this is a Plan asset. But please, keep these comments coming! I'm going to pass them on to the folks who were involved in the original discussion.

WCC - thanks. It so happens that I agree that there is something "strange" about all this. This option you suggest (changing Revenue Sharing, or investments) was discussed, and the TPA said that this option was proposed to both the investment provider and the Plan Fiduciary, and the investment provider said that it wasn't an option for this particular program, whatever it may be. And again, the Plan Fiduciary has determined that this investment program is prudent, good, etc., etc... Now, the Plan Fiduciary may be making a bad call on all this. BUT, I'm asking purely from a TPA point of view - if the Plan Fiduciary is ok with it (rightly or wrongly) do you see a problem for the TPA if the TPA keeps this "extra" money? The TPA has (supposedly) disclosed this in great detail, and even recommended that the Plan Fiduciary consider whether this arrangement is reasonable. I haven't seen the various documents involved, for disclosures, etc., 'cause this was just a discussion and I'm not entitled to see those details, so I can't really give you anything more than what I've posted here. Thanks again. P.S. - I've tried putting myself "in their shoes" to think about what would be reasonable, and it scares the heck out of me, but I suppose I ultimately come down on the side of the TPA being able to retain the fees, where such arrangement has been fully disclosed and approved by the fiduciary. It just goes against the grain...

The information presented was that the disclosure did not address this issue. Whether this is accurate or not, I can't say, it was a discussion, and the actual disclosure was not presented. But for purposes of this discussion, let's assume it was not addressed.

An interesting question came up yesterday in a discussion with some other folks who are in the TPA arena. Suppose you have a TPA whose engagement letter specifies that Revenue Sharing paid to the TPA by the investment firm will offset TPA billings to the Plan Sponsor. At some point, due to asset growth, the Revenue Sharing paid to the TPA starts to exceed the amounts charged, so is basically placed in a holding account with the TPA. The Plan Sponsor is fully informed of this, and as a fiduciary is still happy with this investment arrangement. The amounts accumulating in the holding account start to become substantial, and the TPA is uncomfortable with this, and wants to change things to (a) get rid of the accumulated amount, and (b) prevent it from accumulating in the future. The gist of the discussion was that the TPA should issue a new engagement letter, so that the TPA would keep all future Revenue sharing fees, even if in excess of what would normally be charged. And the holding account will be used to offset fees charged in the future until it is depleted entirely, which will take, apparently, about 4 years. Plan Sponsor is apparently fine with this. A couple of questions were kicked around, however, which were interesting, and I'm soliciting opinions. 1. Is there really any reason why a new engagement letter couldn't simply say that the TPA will keep the accumulated revenue sharing immediately, as long as the Plan Fiduciary doesn't have a problem with it? In other words, does it have to be allocated over the next (x) number of years until depleted? 2. What happens if the client leaves? Wouldn't this money go to the TPA anyway, as it certainly isn't a Plan asset, or anything "belonging" to the Plan Sponsor? Seems to me that the solution proposed, while certainly reasonable, is more cumbersome than necessary? Anyone ever encountered a similar situation?

I've seen nothing official from the IRS, but here are the likely limits as I have seen them. No guarantees! Deferrals – 19,500; catch-up 6,500; comp limit 285,000; DC 415 limit 57,000; Key 185,000; HCE 130,000.

W-2.

I agree. Employers generally have a great ability to make your life miserable, even if they don't fire you. I think Jpod's point is well taken - just make darned sure you are prepared for the possible ramifications if you do pursue this. Is it worth it? Maybe, maybe not. Only you can answer that. I'm obviously not advising either way, and these are all just informal opinions on a discussion board.

No in-service distribution permitted at the NRA of either 60, or the prospective age 65.

I don't know why this is bothering me, but it is. ERISA 403(b) plan. If a plan has a NRD of age 60, and wants to amend it to age 65... Currently all accounts are all 100% vested at all times. In-service withdrawals are NOT currently allowed other than for hardship or disability. Allocation conditions for employer match/nonelective are NOT waived for termination of employment after attaining NRD. I don't much see the point in amending NRD to age 65, as it doesn't accomplish anything under the current terms of the plan. But if they did amend, is there any problem? I don't see a cutback of any benefit, but it just feels odd - anything obvious I'm missing?

Gracias.

Thanks Derrin. Does this apply ONLY to 401(k)? In other words is the 403(b) deadline still have a deadline of the end of the calendar year following the year in which the hardship provision changes were adopted? Or is this still TBD?

Thanks Peter. Probably my qualified plan background peeking through - for example, new salary deferral or distribution forms wouldn't suffice for a plan restatement on a 401(k) plan, so I never thought that what you describe might work in a 125 plan. But I expect the attorney will consider this - or perhaps not, if the advice is to "move forward and ignore the past." Of course, if this business is like most businesses we run into, they won't pay for legal advice anyway...

Wheee... just got an e-mail from someone who had adopted a Section 125 plan app. 20 years ago - it has never been amended or updated since then. Wanted to know "What happens" if they don't do anything? The truth is, I'm really not sure. I'm not even sure where to start to determine what "required" changes/amendments etc. would have been missed, and when. My assumption is that since there is no EPCRS equivalent for Section 125 plans, that for prior years, if any, that were "noncompliant" in terms of document language, the pre-tax deductions could be disallowed upon audit. Seems like all that can be done is to adopt updated document, and hope for the best for all prior years? Have them talk with legal/tax counsel re the possibility/advisability/risk of initiating some sort of settlement with IRS? Furthermore, do you know of any good source(s) for information to determine what updates were missed, and when? Thanks!! P.S. - as to the consequences of incorrect documents, I'm really asking if there is any guidance in addition to Prop. Reg. 1.125-1(c)(1) through (7)? And, what source(s) might one readily use to determine that dates and changes that may have been "required" for all those years - if such sources exist?

One of the checklist choices involves the age of the participant. Just put in 18, or 21, or whatever age a participant can become eligible for the plan. Also, if you want to allow in-plan Roth TRANSFERS, you have to complete the separate amendment request later on in the checklist. Now, I'm assuming this is the VS 401k in adoption agreement format. If not, then please ignore the above, and you'll have to peruse the specific checklist options for whatever document option you are using to determine how to do it. I suspect it is substantially similar, but I don't know, as I only use the VS AA 401(k) document.

FWIW - I haven't had this situation, so just my thoughts. Since it has been more than 6 months, I'd first contact the IRS to find out the status. If they say it should be assigned in a reasonable timeframe, I'd wait until it is assigned. Otherwise, I'd send the corrections, with a cover letter explaining the situation, and a copy of the entire original filing, since it may otherwise never get connected properly. I don't think you can utilize the new pay.gov procedure in this situation, where you have already submitted and paid. But once it is assigned and you have a specific agent to work with, you can ask them how they want you to handle. Others may have had hands-on experience with your precise situation, and give you specific advice on what worked for them. Good luck.

Mandatory 20% withholding is only applicable to "eligible rollover distributions." A hardship withdrawal is not an eligible rollover distribution.

Not sure what you mean by "used" - under the language you have posted, the forfeitures ARE being used. Paying expenses is voluntary, the next two uses (if any left over after paying expenses, if they choose to pay expenses) are mandatory, in the order as listed in the pan language above.

Any thoughts out there?

Funny, most of the documents I've seen DO provide the automatic inflation adjustment. At any rate, unless an employer for some reason does not want the limit to increase, it seems like it is unnecessary work and expense to amend each year. (The cynical part of me wonders if a TPA might do this intentionally to increase billings, but that is perhaps an unworthy thought.)

I'll just mention here that while this is the way it should be, it is NOT necessarily the case. I don't presume to advise on anything to do with this, other than to echo the suggestion that due to the gravity and complexity of the situation, it might be well worth a consultation with a good attorney who has expertise in the health/FMLA issues, and ERISA issues. I join in with others in sincerely wishing you successful treatment, and best of luck to you.

Is there even any obligation to report it on a Schedule C? Never having seen a negative amount, I 've never had any reason to look into it, but it seems counterintuitive that it would be reported at all. Caveat - this is without even looking at the Schedule C instructions - just an "off the cuff" thought.

Deleted.

Deleted my post. Thanks.

Hi Bird - Wednesday e-mail from ASPPA: October 2, 2019 Powered by the American Society of Pension Professionals & Actuaries ASPPA Seeks IRS Action on Form 5558 Acknowledgments Kizzy Gaul ASPPA has received reports of plans receiving incorrect Form 5558 acknowledgments or extension denials despite filing on time to extend their Form 5500 deadline. ASPPA's Government Affairs Committee has contacted the IRS to receive guidance on a resolution. READ MORE 403(b)s Boost Participation, Contributions, Financial Wellness ASPPA Net Staff According to the 11th annual 403(b) plan survey from the Plan Sponsor Council of America (PSCA), increased contributions by both participants and organizations continue to have a positive impact on retirement readiness. READ MORE PBGC Proposes Updated Rules Concerning Benefits Payments John Iekel The Pension Benefit Guaranty Corporation (PBGC) has issued two proposed rules related to its ERISA Section 4022 Benefits Payment Regulation. READ MORE House-Approved Bill Preventing 'Forced' Arbitration Could Impact Retirement Plans Ted Godbout Legislation approved recently by the U.S. House of Representatives would restrict the use of pre-dispute arbitration agreements – potentially including their use in workplace retirement plans. READ MORE BROWSE TOPICS Sales and Marketing Practice Management Technical Resources Advocacy Education and Career Development BECOME A MEMBER OF ASPPA Join our elite network of retirement sales and investment professionals. Join as a Credentialed Member Join as an Affiliate Member RESOURCES Retirement Plan Academy ACOPA Corner Publications Government Affairs Conferences and Events ASPPA Net News Research ABCs ASPPA Membership The American Society of Pension Professionals & Actuaries is a non-profit professional society. The materials contained herein are intended for instruction only and are not a substitute for professional advice. 2019. All rights reserved. American Society of Pension Professionals & Actuaries 4401 N. Fairfax Drive, Suite 600 | Arlington, VA 22203 P: 703.516.9300 | F: 703.516.9308 CustomerCare@asppa-net.org www.asppa-net.org Click here to unsubscribe.

I just used it for a document, and no problems whatsoever.