RatherBeGolfing

Yes.

I guess I'm too soft nowadays, I draw the line at tarred and feathered

Belgarath, I agree. I don't even think a service agreement has to state that TPA will keep excess revenue sharing, unless the revenue sharing is being payed to the TPA for the stated purpose of paying for fees. In my situation, the plan has actually paid less than it had originally contracted for since the TPA has reduced its fees by revenue received from the investment company.

Quick example: Plan A contracts with investment company X to pay 50 bps in fees. A also contracts with TPA Y to pay $4,000 in annual fees. Investment Company X pays all TPAs with at least $100,000,000 in combined plan assets a 5bps incentive. Plan A has $10,000,000 in assets, and the fee collected by X is $50,000. Y has more than $100,000,000 in total plan assets with X, so it receives an incentive of 5 bps from X. Under this scenario, must Y pay the plan $1,000 since it received $5,000 from X and its agreement with A was $4,000?

I'm not a big fan of revenue sharing, but I'm struggling with the requirement part. I don't think I have seen many revenue sharing or incentive programs from a third party that even mention fees or expenses.

Are you saying that unless specifically stated otherwise, revenue sharing MUST be credited towards fees, and when all fees have been paid, excess MUST be paid to plan?

Luke, are you saying the revenue sharing is a plan asset simply because it originated from investments held as a plan asset? For this argument, do we need to get more specific as to what we mean by "revenue sharing"? For example, many providers have "TPA incentive programs". All (or qualifying TPAs) receive an incentive from the provider based on the assets of the plans in the TPAs book of business. Lets just make it easy and say 5 bps. The provider collects 50 bps from the plan as its asset based fee. The provider pays 5 bps to the TPA, which is properly reported. Because of plan assets, the 5 bps paid to the TPA amounts to more than the total fees for the year per the service agreement. Would you call the excess a plan asset in this situation? Is it different if the provider's incentive program is based on the specific investments (5bps on assets in class A, 7 bps on assets in class B, etc.)

I see no harm in naming the company since they have openly communicated this. I don't have all the details, but there is more to it than just sending the funds to an IRA. I have also not seen the follow up that OP refernce, only the initial communication to TPAs and Plan Sponsors. Voya Financial is working with Millenium Trust on uncashed checks that have been outstanding for more than 365 days. The letter to the plan sponsors first reference checks that are returned as undeliverable, but then the terminology switches to uncashed checks. Either way, Voya's default method of dealing with these checks is to transfer them to MT. MT will then place them in an IRA and attempt to contact the "account holder" with instructions on how to receive payment from MT. The plan sponsor can tell Voya to not transfer to MT and make another attempt to an updated address, or deposit the funds to the plan's forfeiture account. MT is not the only provider to offer an uncashed check solution, Penchecks has a similar solution using either Taxable Savings Account or a default IRA. Im sure there are other players as well.

Do CPC first. The modules are not very comprehensive, but overall that designation takes more time anyway, so if you are going for both you are better off starting the one that will take the longest. The modules are pretty brief and are designed more as an introduction rather than a deep dive.

that pesky "co-fiduciary" thing that people forget when they toss around the idea of 3(16) to "make things easier for the client"

I haven't looked at any recently, might even be as far back as before the last restatement. Several of those documents were specifically written to exclude non-owners (with no option to include). These were your all-in-one fund company plans where everything has to go through that company. They don't have (or didn't have) staff for testing and 5500s (other than EZ) and all that fun stuff we do.

I have seen plenty of those docs. The way they are written they cannot be used when there are other employees. They are usually of the "here is a short adoption agreement, fill it out and keep it with your files" variety.

Fee structure is the least of your worries at this point. Have you looked at what functions you will perform, what your liability is if not performed properly, what additional requirements you will subject yourself to as a co-fiduciary, whether your E&O will cover you at all if you take on fiduciary responsibilities , etc? That is where you need to begin.

I agree.

As a side note, you might as well file. The time it takes to prepare the EZ with instructions on how to file is negligible, and as ESOP Guy explained above, you start the SOL. Also, if you find out down the road that the assets were actually higher, you can just amend and not worry about correcting for not filing in the first place. It happens all the time. The client forgets about an account, or the client forgets to mention that they also had a DB plan with another company, etc. No. Yes. No.

Agree 100%.

Out of curiosity, what authority would the client rely on to force the plan to review a draft DRO? They would have obviously have to determine whether a DRO is qualified or not, but why would they be required to review draft DRO?

Always happy to contribute! I know a lot of organizations are really digging into this one because of the short comment period, so it will be interesting to see what shakes out. 23 days and counting...

I agree, but if you utilize the special consolidation rule you will not be sending out a notice of availability for every notice. You would get annual notice that you can go to this website to view and download XYZ notices. The way I have seen this interpreted, you will not get a notice when each one is updated/posted, you would just get an annual notice that this is where you go to get this group of notices. This will probably get some attention during the comment period though, so who knows if it will stay like this for the final rule. § 2520.104b–31(i) Special rule for consolidation of certain notices of internet availability. Notwithstanding the requirements in paragraphs (d)(4)(ii) and (iii) of this section, an administrator may furnish one notice of internet availability that incorporates or combines the content required by paragraph (d)(3) of this section with respect to one or more of the following covered documents: (1) A summary plan description, as required pursuant to section 104(a) of the Act; (2) A summary of material modification, as required pursuant to section 104(a) of the Act; (3) A summary annual report, as required pursuant to section 104(b)(3) of the Act; (4) An annual funding notice, as required pursuant to section 101(f) of the Act; (5) An investment-related disclosure, as required pursuant to 29 CFR 2550.404a–5(d); (6) A qualified default investment alternative notice, as required pursuant to section 404(c)(5)(B) of the Act; and (7) A pension benefit statement, as required pursuant to section 105(a) of the Act.

Correct. The proposed rule is an additional method for electronic delivery, and does not replace or change current safe harbor [§ 2520.104b–1(c)] The big difference here is that the old safe harbor is opt-in and the new safe harbor is opt-out. If a pdf has malware or a malicious script, does it matter whether it is emailed or downloaded from a website? I don't think so but I'd have to consult our IT folks on that one. The only statement that would be specific to the individual is the benefit statement. Is there a greater risk of it ending up in the wrong hands if you email the statement or upload it in such a way that only the intended participant has access? If you send such emails securely (encrypted emails), the risk should be about the same, but it may be more convenient to upload to a website that the participant can access.

I don't think your solution works. It is fine to reference a notice or document you have already distributed. I do not think the safe harbor notice can include, by reference, something the participants do not already have access to.

https://www.irs.gov/forms-pubs/comment-on-tax-forms-and-publications This would be the more appropriate forum...

Because that is not the purpose of the form...

That is my understanding. The exception would be a VERY good reason. Opposite of what I have heard. They sure do...

@austin3515 the ask the experts panel agreed with you, as the loan is an investment, you can rebalance. They hedged by added that just because it can be done, it doesnt mean that it should be done. There was also a comment questioning whether you really want to put that kind of language in your plan document, leaving open the question of whether additional language is needed