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From my experience as a bank trustee, we certify our retirement plan trust accounting statements at the plan level. It's always been this way. We also do participant recordkeeping - daily and balance forward. When accounting firms are auditing our clients, we're always asked to provide samplings of individual participant statements and it's my understanding the accountants are testing them for both proper allocation of contributions and investment earnings and that it's always been that way. They also gather data to document that trust and recordkeeping are in balance. So I'm not sure I understand what your're saying has changed. Are you saying that a "good" SAS 70 from the recordkeeping provider could relieve the auditors of some testing? Just curious!

Can't help you with the survey, but do suggest when you compare pricing you use the DOL pricing comparison worksheets available on their web site. It also explains the various charges of service providers from mutual funds to participant recordkeepers to corporate trustees. This is a plan people will be interested in bidding on. Best of luck!

The PTE permits the qualified plan to "sell" the policy to the insured for its current cash value. The plan then transfers ownership to the insured and the insured names his own beneficiary instead of the plan. Most insureds don't have the cash so here's another idea - the plan may be able to take a maximum loan against the policy's cash value and deposit the loan proceeds to the plan. It can then transfer ownership of the policy to the insured and the cash value will be close to zero following the loan. That small value is taxable income to the insured. The death benefit will be reduced by the amount of the loan and the insured will need to pay premiums to keep the policy in force. The insured may, in some unusual situations, also need to pay interest on the loan If the idea is to just get rid of the life insurance, the plan can surrender the policy for its cash value and deposit the proceeds to the plan. This is the easiest way to solve the problem. Surrender is what I'd recommend unless the participant/insured needs the coverage and can't get a new policy due to current health. Assuming this is a defined contribution plan, transactions relating to the insured participant affect his plan account. If this isn't what you need to know, can you give more information on what you want to accomplish?

Thanks!! That's what I figured about the "rules."

Has anyone seen something definitive on how an employer can clear very small account balances from former participants' accounts? Is there anything on de minimis amounts for which checks don't need to be issued and the plan can just forfeit them? We have old unpaid checks in amounts less than $1 we'd like to just cancel rather than going to the expense of reissue only to have the reissued check end up uncashed too. I'm wondering if these checks should even have been issued in the first place, but on the other hand the participants were due the money even if it was only 78 cents. What are others doing about this problem? Thanks for any ideas or information you can offer.

We believe the estate of the deceased participant can repay the loan to avoid the offset and resulting Form 1099-R in the decedent's name. Our situation was a non-spouse beneficiary of a wealthy participant who died with a loan balance due of over $40,000. The family's attorney is considering whether or not the estate should repay the loan. Any thoughts out there?

Going in a slightly different direction, since one cannot merge a 403(B) [ERISA] Plan into a 401(k) plan, how can the employer terminate the 403(B)? It's too costly to maintain both. Does there have to be a distributable event to pay out the participants or will the fact of termination be sufficient? It's the employer's hope they can terminate and that most of the participants will elect a plan to plan transfer to the 401(k).