RatherBeGolfing

Why the assumption that self-dealing & excessive fees is a trustee directed plan issue? Often, those types of claims arise because the investment options provided to the participants are proprietary funds with higher fees than other available alternatives. Or that a fund menu is stacked with share classes paying higher fees or revenue sharing rather than low cost or no revenue sharing funds. The plans targeted tend to be large plans with many participants, and they are statistically unlikely to be trustee directed...

Not really. Participant direction comes with a minefield of requirements and disclosures. Participant directed plans are an easy target for Schlichter and company because you can almost always find plausible issues with fund lineups, fund choices, share classes, disclosures that you need a PhD to navigate, failures to disclose , etc. There is risk involved with trustee direction as well, but I actually think you have more risk in a participant directed plan.

If you go to page 51, it uses 401(k) type plans rather than all DC plans. The percentages here are probably more in line with what is expected 8.7% (46,696 / 533,769) are trustee directed 2.7% (14,403 / 533,769) offer limited participant direction (probably on the 401(k) portion) 88.6% (472,669 / 533,769) are participant directed 79% of the trustee directed 401(k) plans have less than 25 participant

I have a lot of 401(k) plans that are trustee directed. Most of them are 20 participants or less, and all of the non-owner participants have done much better than non-owner participants in my other plans that are participant directed. Another interesting characteristic of these plans (at least my plans) is that they have very little leakage because the plan sponsor wants to make sure that his/her employees actually have assets left when they retire. Very few of them offer loans, hardships, or in-service distributions.

The DOL actually publishes statistics based on Form 5500 data. Go to https://www.dol.gov/agencies/ebsa/researchers/statistics/retirement-bulletins/private-pension-plan The most recent statistics were published in September of 2016 and uses the 2014 data so it is slightly dated but it takes time to compile and put together the report. Look on page 49 of the report (pdf page 53) and it will give you the stats for participant direction

FWIW, I agree 100% with MoJo. When errors happen we fix them and change the process to make sure they don't happen again. We don't continue with the same flawed process because it is cost effective. I would go as far as saying that a fiduciary who contracts with a service provider knowing that the process will produce errors and that the process will not be revised to prevent those errors in order to cut down cost is in breach before the error even happens. An agreement with that flawed service provider is certainly not in the best interest of the participants, and the fiduciary's responsibility is to find a a service provider who will perform accurate work (and fix flawed processes) at a reasonable and necessary cost.

I'm not sure if EFAST2 will accept the form marked amended and DFVC. If it does, then we are all good. If it does not, then file as amended and move on. Until the IRS says otherwise, I would say that the original filing date is still good. If and when the IRS sends you a notice that they are considering the amended date as the filing date, you would be eligible to go through DFVC to correct.

Can a fee be reasonable if there is an expectation that the work may not be accurate?

Nope. As long as they timely deposit them when actually withheld, the are deposited timely.

You could be fine as is, but the IRS could also take the position that the 5500 was never technically filed until it was filed with the audit and therefore late by almost a year. Either way, DFVC should still be available. On a related note, the IRS recently did a webcast on practicing before the IRS and the topic of filing incomplete returns or responses for the purpose of meeting deadlines or as a stalling procedure during audit could lead to an OPR review if the practitioner is subject to Circular 230. Unlikely that our 5500 example would lead to anything but I wanted to mention it since it was discussed during the webcast.

No. If you file your 5500 late you will get a notice telling you that your late filing penalty is a certain amount but that you can go through DFVC and pay the user fee instead. So DFVC is still available after filing the 5500

Hardship distributions are not rollover eligible though. § 402(c)(4)

It would probably only get caught if the participant complains or as a byproduct of an unrelated investigation. More damning if it isn't an isolated incident which is beyond the fact pattern, but where there is smoke there is usually fire...

2015 ASPPA Annual IRS Q&A Q#18 Can a participant could return a hardship distribution to the plan if the reason for the hardship was no longer valid? Example – I contract to buy a house, request a hardship distribution that is granted to me. After I get the money the house sale falls through. ASPPA Proposed Answer There is no mechanism for returning an unused hardship distribution to the plan. A deposit of those funds back to the plan would constitute an after-tax employee contribution. The fact that the reason for the hardship was valid at the time it was made is sufficient for the hardship distribution to be permissible, so there is no qualification problem with the fact that the house purchase ultimately fell through. The participant should likely bank the proceeds of the distribution in anticipation of ultimately buying a different house. IRS Panel Response To be discussed from the podium My Notes on IRS Answer From Podium The hardship is permissible because it was valid at the time of distribution. There is no procedure to allow the return of a valid hardship distribution to the plan. The money stays with the participant. *Edited for formatting

FWIW, this was the IRS answer to this question last year or the year before at ASPPA Annual. Of course, this is only the panelist's opinion, but it makes sense. I'll see if I can find the written answer (if any), or my notes on the answer.

Absolutely. The PA's problems do not end with the participants failure to bring an actionable claim... We can only hope this PA is nowhere near any of our plans

I agree that a court would (and should) most likely dismiss the participant's claim.

No I haven't seen it in practice, and there really is no reason for a 5558 filing to trigger an audit. A 5500 filing that indicates that the plan should have had past filings will probably trigger a response asking why prior years were not filed. I see no benefit in filing anything for the current year until you have the past years ready to file (or already filed) with the proper correction.

I agree with Mike. Filing the 5558 should not trigger them to ask for the 5500, but why take the chance? Likewise, why file the current year before you are ready to submit your past years if there is even a chance that they will ask for the past years before you are ready to submit them? It isn't going to cost more to include the current year in your DFVC filing, just submit them all at the same time.

Yea but without badly written regs we would lose out on so much fun... So maybe the unedited comment wasn't so far off after all

An average MyRA savings of $1,700 at an average taxpayer cost of $3,500...

Either way is fine. The only time the extension is going to matter is if they get it past the original due date.

As I remember it, you would get a wristband for Thirsty Thursday but you had to get the cheap beers from one particular beer stand... After a while, the 30 minute wait in the cheap beer line got to be to much and many would just get regular priced beers.

I might have gotten my promos mixed up since I lived in Jax at the time... But I am pretty sure Mike was first with Tonya Harding Bat Night. The Suns used to do quarter beer night every now and then which was a crowd pleaser for sure

Most of the crazier promotions are done at the minor league level. As sad as it is, Tonya Harding Bat Night has been done by more than one organization but I believe Mike Veeck was the only one to actually get Tonya Harding to attend and sign the mini bats. This is from the same mind that did a "Vasectomy Night" promotion for a Father's Day game, where one lucky dad won a free vasectomy...