RatherBeGolfing

I tend to agree with you, but I have also heard some promoters make a similar claim. That said, I have also been told that all plan sponsors should "protect themselves" with a "316 fiduciary"... I think it depends on what you mean by 404© disclosure. The plan has to disclose to the participants that the plan is intended to be 404© compliant and will not be responsible for investment losses. This is normally disclosed in the SPD but would not be an annual requirement. I guess you could call the QDIA and 404a disclosures part of the overall disclosures you need in order to satisfy 404©, thereby imposing an annual requirement.

You say that A dissolved and B became the sponsor of A's plan, can you give us more detail on how this happened? How did B become the sponsor? Was there an asset sale? Stock sale? Did the employees terminate with A and get hired by B, or did their employment simply transfer to B? The devil is in the details here...

Matt, I see your point fees, but I disagree. You will always have to pay something to get competent advice. There is no such thing as set it and forget it for compliance. As to ethical or professional standards, there is no requirement that you have a designation or certification. Most professional rules of conduct require that the practitioner is competent in the area. The problem with your situation is that you can't simply learn a limited amount in order to just deal with "solo 401k's", because it is a marketing term. In order to be competent to work with one participant plans, you also need to understand single employer qualified plans. Who is going to create the plan document? Are you competent to answer the questions in an adoption agreement? Do you have a good grasp on compensation, contributions, deductions, etc.? Are your clients going to get W-2 comp or are do you need to do an earned income calculation? If you are actually looking to learn, I would suggest ASPPAs QPA designation. If you work through those exams you should have at least the basic understand of how plans work and what can create problems.

Matt, the point you are missing (or perhaps simply overlooking) is that a client who cant afford a few hundred a year on competent and qualified advice should probably look for savings vehicle more in line with what they can afford. And honestly, if you are putting away $18k+ a year, it is not that you cant afford it, you are simply too cheap for your own good. This isn't Michelangelo vs a handyman for a tree house, this is hiring a librarian to your electric work. Sure she may have read up on how to draw wires and how to ground, but there is a good chance she will burn your house down. On a side note, I'm not sure what ethical standards you are held to, but most professionals in this forum are held to circular 230 or higher, and providing services for something you are not qualified for would be a big no no. Something to consider.

Reviving this topic to add some comments from ASPPA Annual - Judging by comments made in several sessions, the new 5500 will not be ready for 2019 - Current estimates indicate that software providers will need at least 2 years to develop, code, and test the systems for the new 5500. This would mean that they would need to have guidance early 2017 to be functional for 2019. This does not seem to be even remotely likely - DOL funding is an issue. No funding, no guidance, no new 5500 - Don’t expect any big changes until a few years into the next decade - IRS only changes could come sooner but were once again delayed The best way to avoid dealing with major changes to 5500 reporting? Retire J (at least that was the closing argument made by Janice Wegesin)

I would imagine a partner only plan could have vesting schedules. Also, misconceptions such as "all one-participant employer contributions are fully vested" could certainly lead to having a vesting schedule even if it wasn't the intention...

Nothing in the Q&A on 403(b) documents. On a related note, the new format where the IRS does not prepare a written answer at all kinda sucks...

Not that I have heard so far, I'll let you know if they comment on it in the Q&A.

Matt, please listen to Austin and the rest of here with decades of experience. Don't put your clients and yourself in harms way by trying to save a dollar in a very complex industry. Good luck.

Matt, that is what TPA software is for and a good reason why plans should be serviced by plan professionals.

At a minimum, you have to track deposits, account for the earnings (per conteibution type) and, and make sure all transactions in the plan were allowable. While I suggest this be done someone with 401k experience, it doesn't have to be cost prohibitive. My firm does these by the hour (400 minimum) and they rarely go beyond the minimun unless its a "problem client". If that isnt in a clients budget they should probably consider another vehicle for savings...

I don't disagree with ETA. However, when the IRS gets a late return, their first correspondence is often "your form is late and based on the # of days the penalty is $15k." That letter also contains information on how to go through the DFVC with a small user fee rather than the 15k. In this case, the return was filed on an EZ so they obvously would not include the DFVC info, and based on the year (2013) Im not sure if its eligible for the EZ program. In any event, it should be taken seriously and requires immediate attention.

Get a POA and contact the IRS, I have no doubt they will work with you to get it corrected. You will be able to do DFVC because you still haven't filed the 5500-SF for 2013.

A few things don't add up here... If they filed $0 BB and 0 participants beginning of rhe year for 2013, shouldn't 2012 have been your final year? The 2013 filing, EZ or SF does not make sense. You can do DFVC even if you already filed the 5500. What you cannot do is DFVC with an EZ (there is another program for that)

I believe the FAB you are referring to is 2012-02R. See Q39 below Q39: A plan offers an investment platform that includes a brokerage window, self-directed brokerage account, or similar plan arrangement. The fiduciary did not designate any of the funds on the platform or available through the brokerage window, self-directed brokerage account, or similar plan arrangement as "designated investment alternatives" under the plan. Is the platform or the brokerage window, self-directed brokerage account, or similar plan arrangement a designated investment alternative for purposes of the regulation? A39. No. Whether an investment alternative is a "designated investment alternative" (DIA) for purposes of the regulation depends on whether it is specifically identified as available under the plan. The regulation does not require that a plan have a particular number of DIAs, and nothing in this Bulletin prohibits the use of a platform or a brokerage window, self-directed brokerage account, or similar plan arrangement in an individual account plan. The Bulletin also does not change the 404© regulation or the requirements for relief from fiduciary liability under section 404© of ERISA or address the application of ERISA's general fiduciary requirements to SEPs or SIMPLE IRA plans. Nonetheless, in the case of a 401(k) or other individual account plan covered under the regulation, a plan fiduciary's failure to designate investment alternatives, for example, to avoid investment disclosures under the regulation, raises questions under ERISA section 404(a)'s general statutory fiduciary duties of prudence and loyalty. Also, fiduciaries of such plans with platforms or brokerage windows, self-directed brokerage accounts, or similar plan arrangements that enable participants and beneficiaries to select investments beyond those designated by the plan are still bound by ERISA section 404(a)'s statutory duties of prudence and loyalty to participants and beneficiaries who use the platform or the brokerage window, self-directed brokerage account, or similar plan arrangement, including taking into account the nature and quality of services provided in connection with the platform or the brokerage window, self-directed brokerage account, or similar plan arrangement. The Department understands plan fiduciaries and service providers may have questions regarding the situations in which fiduciaries may have duties under ERISA's general fiduciary standards apart from those in the regulation. The Department intends to engage in discussions with interested parties to help determine how best to assure compliance with these duties in a practical and cost effective manner, including, if appropriate, through amendments of relevant regulatory provisions.

It's just crazy that there is no self correction option, even for small amounts. Frankly I thin there should be a self correction option for deposits that are late by less than a month for example regardless of size. Maybe they will figure that out! I agree. To that end, there is a possibility for something good to come out of it since they are collecting data on how people are using the program.

So here is a brief update Yes, this is part of a national initiative, but how it is addressed depends on the regional office. There is no de minimis amount. It appears that this could also be connected to an even larger initiative looking into how effective current compliance programs are and how they are used. J

Like Kevin said its not logical but it is how the rule works. That third loan throws a curve-ball into the highest outstanding & current outstanding equation. Most of my plans only allow for one loan at a time so this is more of a theoretical exercise for me

Yep, this is how it would be handled if it landed on my desk as well. Although, most auditors I work with are very reasonable as well and would probably offer to pay half of it in a situation like this.

But they told me they were a FIDUCIARY!!! You mean I actually had to read the fine print and maybe look up Awesomefiduciarytrainingforoutofworkrealestateagents.com who issued the fiduciary "certificate"?!

If the user lacks expert knowledge of ESOPs, it should probably be passed on to a user who DOES have said knowledge All kidding aside, this type of question always makes me a bit uneasy. If you don't understand the mechanics behind the questionnaire/input system, you probably shouldn't use it to create a plan.

I have had the same requests but I always just provide the SPD and they are fine with that.

Austin, how does the opportunity to exploit the hole in the regs apply to one and not the other? I agree, the example ETA brought up is more extreme than the example in the EOB, but I just don't see that there is anything in the statute to suggest a limited opportunity to use the loophole. The EOB also states that Treasury could (but have not) seek an interpretation that would preclude loaning out more than $50,000 in any 12 month period when there are more than two loans. Without such guidance, the loophole is still available.

I'm fairly certain that ETA is correct that a literal reading of 72(p) actually allows for this. This is because the statute does not specifically state that you have to carry over your adjusted limit in the second loan to the third loan. From the EOB Applying the $50,000 limit when there are more than two loans in a 12-month period. Where there has been more than two loans in the last 12 months, remember to take the highest outstanding loan balance at any time in the 12-month period, and subtract the current loan balance at the time of the new loan to determine the adjusted maximum loan limit. As the following example illustrates, it is possible to lend out more than $50,000 in a 12-month period provided the outstanding loan balance at any time is not greater than the adjusted maximum dollar limit.

Having been through this before, here are my observations Attaching a statement explaining that the audit is not available lets you submit "on time", but incomplete In my experience, the DOL will NOT consider the incomplete filing timely. Attachments are reviewed to before they are made publicly available When reviewed, your filing will most likely be flagged as incomplete, and you will get a love letter telling you that you are on the naughty list and can be subject to huge penalties, but if you pay the user fee and file under DFVC in XX days you are back on the nice list. If you don't file on time because you are waiting on the audit, you will pay the same user fee but won't subject yourself to the the DOL/IRS follow up timeline. If this was my client, I would hold off on filing until I had the audit and could file late but complete and go through DFVC right away.