stevena

OK thanks for the assistance. Maybe I should have been more specific. The operation was just one guy, working out of his home. There were no other employees except for me and random other folks who came and went after a month or so. I thought we did everything we were supposed to. I was fresh out of school and had no experience. I bailed as soon as I figured out that we were doing everything wrong. I know the guy is being sued by many, many clients. They all dispersed to other TPAs in the area. I am sure everyone in the business knows him, and I am very sure his reputation is poor, both in the TPA field and in the business field in general in that city. So, I wont leave it off the resume. bad me. I just thought maybe since a recruiter told me only to go back 7 years on a resume, (unless something before that was very relevant to the job I wanted) and I was approaching 7 years, that it wasnt a big deal to not go back that far. I wasnt trying to be dishonest. And it definitely is not relevant, since it didnt teach me a thing except what NOT to do. So, with that info, can anyone assist on how to approach it on the cover letter? again, there is no doubt that everyone in the city knows him.

No I would never lie...but leaving it off my resume entirely, I meant. I just dont want to be tainted by it. It was so long ago, I thought maybe it wouldnt be an issue anyway. I wasnt going to go back any further than my current job. Not like I was going to skip over the other job, I just was going to stop at this one. So what kind of explanation do you think? How do you say "I was stupid and had no clue what I was doing, only I didnt know that"??

Seeking some input from TPA owners while I put my resume together. I have worked at the same company for 6 years now. Before here, I worked at a pension firm in another state for 5 years. Little did I know that the TPA firm I worked for did everything wrong. I was fresh out of school and had no idea how wrong we were doing everything. (didnt know till I got here...where we do everything right). The city I am applying to is in the same city as the old TPA I worked for. I think that the old TPA probably has a pretty bad reputation. Can I leave it off my resume? would you look at my resume and wonder...where was she before her current job? I don't want it to look suspicious. thanks for any input!

I know what you mean. Our TPA firm consults on plan design, and helps the client fill out the adoption agreements for the attorneys we work with (we do it better than them as far as knowing the clients needs). We assist the broker with setting up the plan (we know which fund groups will work best with the kind of plan they are setting up). We also do preliminary testing, the year end testing, 5500, 1099's etc, annual trust reports, and all of the daily stuff for the plans (payouts and loans and RMDs & the like). If that position is what you mean... I am a consultant at a TPA firm in southernmost NH. If you are talking about smaller pension administration firms, not big warehouse ones, the salaries (at my firm) for beginners run around 35-40k. However, I make 70k after 5 years at my firm and a QKA from ASPA (and with bonuses can make more if I want to work more). Honestly we dont pay much to start because its really hard to find good people. Most of what we get is people from fund companies, but they don't transition very well into administration. Mostly because the administrators in my firm handle everything for their caseload, from running tests to the tax returns to plan document issues, and people from fund groups are not used to not having "departments" that handle this stuff. I assume Boston is a bit higher, although we pay better than most in NH, (and would pay more for someone who knows something!) so I dont suspect significantly higer. Let me know if you need any more info. Be happy to help. If anyone has any ideas on the same question but in the Charlotte, NC area, I would appreciate it! I am really trying to relocate, I can't stand these winters anymore!

The only problem I have seen with employers doing a "do it yourself adoption agreement" (especially for a k plan) is that they do not understand all of the ramifications of the choices they make in those check boxes on the adoption agreements. Sometimes those choices have come back to bite. In the past I have thought why on earth did they pick that option? And it is usually that they didnt know any better. It has backed me into a corner on many an occasion with no choices. Thats why I would pay someone to amend the plan. Less costly in the long run. I guess in this situation, though, its only the owner, so no harm done. Generally all the documents we have are attorneys' own documents, so paying them to amend would not go outside the prototype since it is theirs. The ones we do have that are prototypes, we have amended by saying "the plan is amended as follows" (like I was telling him to use his Money Purchase amendment language) and we just re type all the correct boxes exactly as they are written in the prototype. I dont think that would go outside the prototype? Since the language is exact. Thats what I meant in my post. That way you dont have to fill out an entire restatement/new amendment. But I have to say, I would absolutely pay someone to do it (in most cases) since being familiar with the required boxes is necessary.

Are current participants allowed to move money back and forth between the two fund companies at will? No. The reason there was money at Fund Group A and Fund Group B was because the sponsor wanted to transfer all the funds to Group A, but Group B had back end charges that they were waiting to dry out before they moved the money. Is there anything in the service contract w/ company A that says only active people can transfer money in and out? Not that I can see.

I would say no big deal, but merge those plans together and only have to do one 5500! Why make more work for yourself? Merge plan #2 into plan #3. You only need an amendment to plan #2 which is so short and easy to do. (you should have something to work off of with your amendment to terminate the Money Purchase Plan...just change the wording a little) And if you want to change the plan in the future, just pay someone to draft an amendment to your adoption agreement instead of filling out a whole new adoption agreement and opening a new plan. Have someone do it who knows what they are doing, (generally it is brokers who will tell you to open whole new plans becasue they are not familiar with documents.) I just took on a new case and they have five outstanding plans...its nuts!!

I have an odd situation I have never run into before with a fund group. Company "A" has money at two fund groups, "Fund Group A" and "Fund Group B". Employee has money in both places. She was paid out of one fund group "A" one year ago (but chooses to leave her money in the other fund group). A year later, employer decides to move all plan money from "Fund Group B" to "Fund Group A". Of course, employee (who was previously paid out of "Fund Group A" has money at "Fund Group B". Money transfers over for her along with the rest of the plan funds. Here is the odd part: Fund group A will not take her money unless the trustee sends them something saying she is active and rehired! We told them that she is not rehired but wants to keep her funds in the plan. But, they insist that they have a "policy" that once someone is paid out, any money which comes in after that will be paid out according to the prior payout. They are insisting that they are cutting a check to the employee. DOes this sound nuts to you??? Thanks.

Did you add a deferral feature to your existing profit sharing plan (#2), or did you actually open up a whole new plan (#3)? I don't know why you would need a restatement?, you could have just amended the profit sharing plan (#2) to add an employee deferral feature. Theres no need to start another whole plan, all that does is add another 5500 that you now need to file. Did you update the profit sharing plan (#2) for GUST & EGTRRA? That would be a required restatement.

Awhile back I posted a question regarding what "maintaining" a plan meant because a client of mine maintained a profit sharing plan (had not put contributions into the plan in a few years) but set up a SIMPLE IRA concurrently. I got some feedback from this board, and wanted to come back to tell you what the IRS said. They disqualified the SIMPLE IRA saying that "In order to establish a SIMPLE IRA, the employer cannot currently maintain another retirement plan". The fact that there has been no contributions to the plan does not mean, to this auditor at least, that the plan has not been "maintained". The IRS response letter suggests that if a deduction were to be taken for a contribution for a year, that it should have been put into the profit sharing plan if the profit sharing plan was still maintained, and if they wanted to open the SIMPLE they should have terminated the PSP first. I thought you all might be interested in the response we got from the IRS.

thank you

mbozek, turns out this plan is being audited (oh great). the auditor wants the info on the PSP and the SIMPLE. So now my question is, does it matter that i did not code the PSP as a frozen plan when the 5500 was filed for the past few years? and i do have the participant counts going up every year for the PSP. will this matter, do you think, because there are no contributions to the PSP?

Thank you. I thought to set up the SIMPLE I would have to formally freeze the PSP, meaning that no new enrollees could come into the plan. Ive got new people coming into the PSP in the year the SIMPLE was established as well as subsequent years that the SIMPLE was in place. My thought was if it was not "maintained", how come I gave out statements to those new enrollees in the plan who became newly eligible (albeit with zero balances, but given out to show vesting and participation)? I assumed in order to not "maintain" it that i would have to not let anyone new into the plan. I didnt realize "freezing" meant contributions only. Thanks for the clarification.

Do you think 2 years of no contributions would violate the "substantial and recurring" rule? They had contributions every year before that...they just ran into financial problems. Apparantly what they set up was a SIMPLE IRA, not a SIMPLE 401(k). There are no forfeitures in this plan so its a non issue. So are they violating that exlusive plan rule? I know the wording says you cannot "maintain" a SIMPLE plan and another plan. In my opinion, the PSP has been maintained, there just arent any contributions. But in the employers train of throught, he hasnt put contributions in in two years so he hasnt been maintaining. At a loss as to what to do...

I have a profit sharing plan that set up a SIMPLE in the same year. They say they could do this because the PSP was "frozen". There are no deferrals, this is ER PS only. Is "frozen" an actual term? What makes a plan "frozen"? Do you need to do an amendment or anything to "freeze" a plan? The PSP has not had contributions in a 2 years. Thanks for any help.

Does a Simple 401(k) have a plan document? I know you can adopt the model amendment if you already have a 401(k) plan which is updated, but what if you never had a 401(k) plan? Thanks!

Please resend the message...my computer hiccuped at the popup message. thanks!

I dont know why I never thought of that. Most of our business here comes from attorneys and CPAs. You think just cold calling CPA offices is ok?? Thanks!

There really isnt a proper topic on the boards for this, but I was wondering if anyone had suggestions for where I could check out TPA companies (for competence/repuatation). I am going to start looking in North Carolina for a new position. Because I am out of state its tough to "know" the firms like I know the TPA firms around here. Right now I am working at a great small TPA that really knows its stuff! I am not sure how to know a quality TPA from a bad one in another state. (and i know there are lots of bad ones out there!) I know in Plan Sponsor magazine one group in Charlotte was rated #1 this year, so I am going to check them out...but I really like working for small firms. Its a little harder to check out smaller firms and how they run things. If anyone has any suggestions, I would appreciate it! (aside from the BBB, that is obvious but not that reliable). Thanks!

Clarifying again, if my document says that employees MAY be cashed out if they have less than $5000, then I dont have an option any longer to allow employees who have between 1000 and 4999 to keep thier funds in the plan, right? (I have a ton of clients who allow their employees to keep their money in the plan, they are the same million employees we send benefit packages to every year, and they never respond...they are happy with their funds right where they are. And they all have around 1-5k) So my option is to either run around setting up a zillion IRA applications for my trustees to sign, or, to go back to our GUST documents and change the provision that says they MAY be cashed out if they have less than $5000. If I change the provision saying they wont be cashed out regardless of balance, does this problem go away?

Thanks, everyone...I was looking for those proposed regs everywhere. I think we knew about the automatic rollover rules, I just didnt realize that employers HAD to do it, even for people who were not considered "lost" participants. Thanks for the links!

Was wondering if anyone had heard the news that there was guidance being issued next month that starting in January 2005, any employee who is terminated with money in the plan MUST be forced to roll to an IRA. Including terminated lost participants, or participants who dont answer election notices sent out. ALL terminated employees. Leaving money in the plan under $5k was not going to be allowed at all, even if the employer does not want to force out employees. According to speaker was only accounts $1-5k but I just cant imagine how this is going to work. It was a Corbel seminar, I came back to the office and told everyone but they dont think this could possibly be. I cant find anything proposed on the DOL site, has anyone heard anything??

I guess the law requires one thing...and I am sure you could add a whole lot more if you wanted to. But, what the law requires is that the PLAN is covered with a bond which has a payout of at least 10% of plan assets. The bond covers the PLAN, not the PEOPLE, right?? I just want to be sure my plans are complying with the law....

Thanks, I did...they told me "they have heard nightmares about bonds being set up the way my clients are set up". Thats all they would say. But, as the agent said, they sell more ERISA bonds than anyone in the country. Which makes me think, are all my clients set up wrong?? All the insurance company would tell me is that it was the clients choice to buy it or not, and if they wanted to do it another way, that they "could go somewhere else." They told me that EACH fiduciary should be bonded for 10% of the plan assets. However, then they told me they take 10% of the plan assets and split it among all the trustees (Not the same thing!) ex., plan is 1 million assets, 2 trustees each trustee, the way they set it up, is bonded for 50,000 if the requirement is that each fiduciary must be covered for 10%, than they should each have a seperate bond for $100,000 each. When I gave the above example to the insurance company, they told me that covering each trustee for the full $100,000 would be the best thing to do (and would also cost over $1000 a year), the most conservative. But that their standard was to take the required 10% of plan assets and split it among all the trustees. ?????

I have a client who just purchased fidelity bond insurance through CNA/Western. All of my other clients have fidelity bonds which are 3 year bonds for 10% of the plan assets. The premium is around $150-200 for the 3 years. The clients insurance company was told by CNA/Western that they only sell one year bonds, and that they set it up so that the coverage of the bond is 10% of plan assets, but that they split the coverage among however many trustees there are. I never heard this before?? The premium is $500 PER YEAR! I thought at first that it was fiduciary liability insurance they were selling, but it is not...it is a fidelity bond. The plan is the named insured. The agent told me that CNA/Western is the leading seller of ERISA bonds and that they know what they are doing. I felt kind of dumb and am wondering...is this normal? The agent called back CNA and told them what I said, that my clients have 3 year bonds on the PLAN, and that the coverage is not split amongst the fiduciaries. They told him "there was a right and wrong way to do things". How are your clients plans bonded? Does $500 a year seem outrageous? This is a tiny little company so that is a LOT. I could get them a bond for $200 for 3 years, he is selling them a bond that will cost $1500 for 3 years.