Demosthenes

Brian One of your posts stated "performing consistent with it's investment policy?" (emphasis added). From this I infer that the Trustees have created and adopted a formal policy to guide them in the selection of investments. Investment Policy's generally address the frequency and timing of the reviews. Is there an investment policy as part of the trust and does it address the review timing?

Have to play Devil's Advocate here. There are a number of hedge funds that made buckets of money last year. John W. Henry and Co's Strategic Allocation Plan and the Financial & Metals Program were up 30.7% and 45.1% respectively in 2002. These funds invested primarily in currency, interest rate, and metals futures. (Source Boston Globe Business section 4/15/03) Argue that futures and options are imprudent, difficult to manage/track, yes. Argue that they are invariably losers and your client will beat you over the head with numbers like these. I'd definitely agree that this is not a do it yourself kind of investment and would also argue that the near term mind set required for future/options is at odds with the long term view needed for retirement plans. Just for the record, I have no financial interest in these funds and I have no association with John W. Henry and Co.

Try thes from CFO magazine http://www.cfo.com/buyersguide/1,5486,263&...#124;12,00.html http://www.cfo.com/buyersguide/1,5486,223&...#124;12,00.html The list bundled providers versus RK and invest only providers

I do not believe that the creation of ERSA's will have a major effect on the 403(B) space. My reason for making this statement is that the root of the problem seems to lie with States, Counties, School Districts etc. who specify the permissable vendors or who make it unrealistic for most vendors to compete for participants. The 403bwise.com site has devoted a lot of time and effort to this issue and is an excellent place for additional information and opinions that, I'm sure, are much more informed that mine.

Sorry MoJo, When you reduce this to the simplest terms, I need to agree with rcline46. Back in the day, I worked at an insurance company with a large number of clients in all types of GIC arrangements, evergreens, windows, bullets, you name it. This was a pretty common occurrence If you terminate the current GIC, that is an event that triggers an allocation of gains/losses. Look at in the reverse, if the current market value resulted in a loss, you wouldn't be trying to bury loss that in the next GIC would you?

Best bets. They're looking to see if there has been any correlation of trading between the individual bokerage accounts, the pension side, and/or the TPA owners personal holdings. For example, a publically held firm makes a sizable contribution to its plan for the purchase of stock on the open market. Did the individual side show a trade in this stock prior to the plan's purchase? The TPA would be presumed to know of the pension side buy and there would be a lag between the knowledge that a buy was coming, presumably pushing the price up, and the actual purchase. Front running if it's done for a client, insider trading if it's done for the owner of the TPA firm. The same scenario can occur in a variety of circumstances if the TPA excercises discretion over the assets in either or both sides of the house. It's also possible that they are looking at a client's account, one where the client is in both a plan participant and has an individual account. A lot of rk systems don't have adequate controls over the identification of insiders, a trade in an individual account that would be a blatant violation could be done inside the plan and go unnoticed. Somewhere, somehow, the SEC believes there to be a possible link between the individual accounts and one or more plans on the pension side. Of course, it could be just a heavy handed government agency throwing its weight around to demonstrate their increased watchfulness in the wake of the big E et al.

U.S. Pension Services out of Tampa FL (formerly Dun & Bradstreet Pensions) was acquired by First Data Investor Services Group which was in turn acquired by PFPC Inc, a wholly owned sub of PNC Bank. The Tampa office was closed this year and the operation (hopefully including the records you are looking for) were moved to Bloomington MN. They were at 1700 West 82nd St Suite 125 Bloomington, MN 55431 952 703 1700 Good Luck!

Don't wait, contact an attorney, now! Preferably one experienced in the nuances of employee benefits and COBRA. With a non-payment of premium running 60 days as well as the prospect of a substantial claim under the policy on the horizon, the insurance company is going to resist any bid to reinstate coverage unless they are clearly at fault. Normally, I favor negotitated resolutions to benefits related issues, but the seriousness of you situation certainly seems to me to warrant the use of a legal advisor. Since you are on COBRA coverage, the possibility exists that you are currently unemployed and would be concerned about the initial costs for an attorney's services. Many law firms will do an initial consult for free and if it's a good case take it on a contingency basis, others willl take the case pro bono, faiing either of those, your local Legal Aid Society may be able to assist.

Has anyone heard of concrete dates/plans for the adoption of the XML payroll spec from hr-xml.org? I'm trying to find out if ADP, Ceridian, Paychex have made any hard committments to the spec.

Compliance people are working on year end process reviews. What went right, what went wrong with last years compliance work. How do we fix the parts that went wrong? Also, it's a good time to prep some of your "problem child" clients to see what can be done to help them help you. Better data, speeing up audited financials where required etc. It's also a real good time to start getting preliminary data from clients added this year where you only have partial in house records and need to produce a full years compliance and tax reporting. You can't finish the whole job, but you can reconcile thier financials up to their conversion data. None of this is likely to pay off in immediate fees, all of it is going to boost your margins on next years work.

Ah, the joys of data aggregation! I agree that handing off all of your accounts and PINs is putting all of the proverbial eggs in one basket. Unfortunately, aggregation is a fact of life and it is not going to go away. Furthermore, you, as the Plan Sponsor, should be aware of a couple of points. 1) There is a cost to aggregation. Every time a site gets scraped, it consumes bandwidth, CPUs etc. Servers have a limited capacity and given enough aggregation aggravation your provider is going to have to add hardware to deal with the traffic. That will translate into higher costs. If you think this is insignificant, some aggregators allow a user to set up a 15 minute refresh. That means that 24x7, the aggregator is attempting to refresh that data 4 times an hour. Ask your provider to give you a breakdown of hits to the site by participant over a 7 or 30 day span. If you see an account getting 600 - 700 hits in a weeks time from a single participant you're being aggregated. 2) There are other ways to do this that don't have the kinds of impact scraping does on capacity. Lots of aggregators will set up an Extensible Markup Language (XML) transmission with a provider. Talk to your vendor about it and see if you can find a mutually compatible aggregation service. It's cleaner than scraping, consumes less resources, and it's accuracy is greater than scraping. It's also a really nice feature for participant's who do pay attention to their finances and that can be of added benefit to your company when your looking to attract and retain talent. 3) Finally, both Quicken and Money have aggregation features that can be set up on a PC or Mac. Accounts and PINs stay on the desktop, transmissions are encrypted both ways, and most end users will limit the download to a once a day. If the cost isn't too great hand out copies at the company party!

Depreciation is the reduction in usefulness of a capital asset used by a business. What kind of a depreciable asset is in this 401k plan? If you've got capital assets, land, buildings, equipment, as part of the plans assets, then I'd suggest that you probably have a bigger issue than just the reporting. Or is this just a realized/unrealized loss on a plan investment?

At the very least, your web site should be using Secure Socket Layer (SSL) 3.0 and 128-bit encryption with a trusted certificate from a vendor like VeriSign. If that's in place, the SSN is not vulnerable since it's never transmitted in the clear. Nothing is unbeatable, but SSL and 128 bit encryption means that the data is vulnerable only to the most sophisticated of crackers. Believe me, anyone with that kind of decryption horsepower can find an easier way of snagging SSNs. The bigger risk is the guy who types his account id and password in at his computer at work and then walks off for a coffee. As to the CA law, my understanding is that it excludes the encrypted transmission of SSN data as an account ID.

Not a package per se. But, it's not all that difficult to develop on the fly. I've done applications using MS Access to develop the forms and Adobe writer to generate and link pdf files for the tax forms etc to the application. The files can be printed and snail mailed for signature or emailed out as attachements. If you're web enabled, Dreamweaver can generate HTML forms that the participant fills in and either prints or transmits directly to your ops area.

Group Annuity Contracts (GACs) are issued exclusively by insurance companies. They receive their name from the fact that all GACs contain annuity provisions and tables for payout of benefits at separation from service. It should be noted that these provisions are rarely excercised by participants. GAC's generally included a fixed income fund which is often an investment option where the rate is set by the insurance company and the asset is reported/maintained at book value until the contract is terminated. Also included are Separate Investment Accounts (SIA) which are pooled investments that operate in a fashion which is similar to a a mutual fund but which are not publically traded. Many insurance companies have added mutual funds to their offering either as the fund itself or as a SIA that purchases only shares of a particular fund, a wrapped SIA. Another important difference is that a qualified plan with 100% of its assets in a GAC does not require a trustee with the exception of assets loaned out to participants. This insurance comany exemption has its roots in the lobbying effort by insurance companies at the time that ERISA was first drafted. Additional information on GACs can be found at FLMI.org, and LIMRA.org. For your friend, the best advice I can offer is to develop a side by side comparison of the services and charges in the GAC versus mutual fund approach. Pay special attention to the costs of having a trustee, the surrender charges in the GIC and SIA funds, the comfort level of the plans auditors with non-trusteed plans and intangibles such as the amount of investment info available to participants on Mutual funds vs SIAs.

What has been the reaction (yours, IRS, DOL) to plans using a straight line amortization method (level principal and interest) for the repayment of participant loans?

The name was funny enough. What's really amusing is how much did they pay some marketing wiz to come up with it? Or was it just a mistake? I can hear it now PwC: "Got that new name yet?" Marketeer: "Monday" PwC: "That's a great name!" and exits stage right to prep the new collateral material Later the marketeer admits he meant he'd have the new name on Monday, but too late!!

Note that few brokerages actually have the ability to automatically monitor and refuse trades that do not meet the specifications set by the plan sponsor. The Trustee remains responsible for the types of trades executed regardless of the actual custody or trade execution. Also, some brokerage houses (Schwab and State Street among them) will produce an addendum that combines all of the trades by participants of a plan into a quasi trust transaction report for incorporation into the Trsut reporting and 5500. This arrangement does carry a fee and it should be set up beforehand so that the brokerage can arrange to link the related accounts.

I know that this is anathema to those who get paid for administering plans, but for 9 participants and 50k annually, I'd look at an e provider like Emplanet, ExpertPlan, GoldK, or Teamvest to name a few. Even Fido has an e solution. They're simple, inexpensive, and a no brainer to set up. Most have a range of funds you can select from and are fully bundled solutions. A little work with Morningstar to pick a range of funds, some time on a web site setting up plan provisions, and instant Plan! For the record, I don't work for any of the above nor do I have a financial interest in any of them.

Does anyone have any experience working with DST and Trac2000 and who would be willing to share their experiences, good, bad, or indifferent? Is there a users group or any other forum to gain general information on Trac2000 and people experiences? Thanks

You could try Leap Frog Systems at leapfrogsystems.com. They partner with Digital Impact to provide targeted email on an opt in basis for marketing material. They are a heavyweight player and depending on the size of your business, may or may not be suitable. For the record, I have no financial or other interest in LeapFrog or Digital Impact. I know of them because we are considering using their products and services.

The only piece of this transaction that will be considered for a PT and excise tax is the income. Forget about the matching contributions and their timing, whiel important, they are not the root of the problem. Both DOL cases involved late contributions to the plan. In both cases the deposits were missed and made up before the DOL became involved. However, here's the crux of the issue: In both cases the DOL also said that by depositing the lost earnings the Plan had engaged in a PT and subjected the earnings contributed to the Plan to the excise tax. In the interests of client confidentiality, I can't provide details on the clients, but here's the closing letter the DOL uses: http://www.dol.gov/dol/pwba/public/program...ual/cp34fg5.htm I'm not trying to argue that it's fair, reasonable, or good public policy, just that it happens.

No disagreement on the matching contributions, they will not constitute a prohibited transaction. However, the deposit of missed earnings will, in the eyes of some DOL reviewers, constitute a prohibited transaction. The DOL's stance seems to be that dollars are being deposited to the Plan in a manner not contemplated by the plan doc. I've seen ay least two cases where DOL reviewers have stated that the Plan made a good correction and at the same time submitted thier findings to the IRS with a demand for payment of the excise tax. Both were cases where the DOL became involved because of late contributions to the Plan. One case was being appealed, the other elected to pay the excise tax because the amount was minimal. In effect the DOL seems to be saying, "You did the right thing, now I'm going to smack you for it!" As a public policy , this is counter productive, rather than encouraging Plans to take corrective action, the DOL is encouraging Plans to hope they don't get caught.

Do the right thing! An error has occurred, regrettable but they do happen. How you recover from that error can be more important than the fact that the error happened in the first place. Here you have two groups of employees that have been treated differently through no fault of their own. In good faith, the participants should have the lost earnings restored to their accounts. Be prepared to file for a prohibited transaction exemption for the earnings contribution, or if it's a small amount, file a 5330 and pay the excise tax. The participants have been treated equitably, the IRS is happy, and as someone once said "If you can write a check for it, it's not a problem, it's an expense" Fail to make up the earnings and you could end up with employees who are not happy with their Company, not happy with the Plan (which should be a benefit, not a burden), and possibly more problems down the road. After all, what happens if an employee drops a dime to the DOL and alleges that it isn't an error but intentional discrimination? Stranger things have happened.

To address your personal situation, see if the plan allows for any types of in service distributions and in kind transfers prior to the switch to the new provider. You may be able to take an in kind distribution and transfer it directly to an IRA. Schwab, Fidelity and many others offer assistance in rolling over assets into IRA's and should be able to offer guidance in accomplishing their end of the transfer. Determining whether or not the plan permits an in kind, in service distribution is a question your current Sponsor/Trustee will be able to answer. Just an FYI, I am not employed by Schwab or Fidelity and have no financial interest in either company. I mention them only because I have used both to establish IRAs.