Basically

When designing a plan, do many of you use a match formula more often than others? Recommend one over another? (I realize there are certain variables that dictate what a plan's formula should or could be) Have you found certain formulas (besides SH formulas) are better with regards to passing non discrimination testing? Finally, what is a good source for plan design? Thanks!

I was asked to and did speak in front of a NAPFA (National Association of Personal Financial Advisors) group in Boston (well, outside Boston)... I have solicited literally hundreds of CPAs in and around me. I think I am going around it right.. not too pushy.. make the connections and wait. I read a post somewhere on here where someone asked how many plans should an administrator handle... I was frankly surprised to read that many handle 100+... even alot more. I simply want to grow my business and be a little more comfortable

I have posted on the 401K board... maybe some of you have seen my posts. I have been performing TPA work for way too long. I took over a family business and now need to grow. I am activly pursuing the QKA (simply going in order) to put some initials after my name so I am taken more seriously. My Question: Suggestions where to gain new business... plans. I am soliciting local CPAs... financial advisors. I am presently a one man TPA firm administering 35 plans. My goal is to double (or more) my workload and move on from there. My niche is the small closely held corp.. SE individual. Any suggestions ??? any small plans people want to lighten their work load of? (This board doesnt get too much action... But didnt want to take up the 401K board....)

I read these boards daily to learn... I am amazed that the truly knowledgable posters know where to look... down to the "rev proc 2003-44 (Self Correction) part III section 6.02c" as Mr. Poje referrs... Now that I am persuing pensions more activly I find these boards invaluable. Just posting a "thank you" to all for taking the time to help and assist others who are less knowledgable!!

This financial advisor was trying make the start-up cost minimal. His proposed arrangement would be that once the assets reached a certain level the fee would top out at the fee schedule a TPA would normally charge. In that case the TPA isnt makeing tons of $$ on assets in a fat plan with barely any participants. Thank you for your input!

One more question... Thank you all for your patience. Financial advisor has asked if TPA fees could be based on the amount of assets... a percentage. As assets grow so would the admin fee. When asked why he asks he told me that he was told by an attorney that the SEC would label fees generated in that way to be considered "illegal commissions". I am not savvy with regards to SEC rules but don't see the fees to be commissions at all. I told him that as long as he disclosed his fee schedule I didn't see a problem... but that I would ask a panel of experts. Any thoughts ?

I agree...

I have established a few of these "Solo" plans. Up till now the possibility of rank and file EEs becoming eligible has never been an issue. It was spelled out to the sponsor that if an employee was hired that they would indeed be eligible to participate in the plan IF they met the requirements in the document. Typically the sponsor would make the eligibility requirements pretty lax... Here is the question: If you have set up a plan to have immediate 100% vesting and 0 years of service requirement... can it be amended to a TH vesting (2/20) and one year/1000 hour service when you see on the horizon that there are going to be other EEs who may be eligible to participate? is that discrimination?

huh.... well then.. I guess I may have been filing 5500s when I could have been filing EZs... not that I did anything wrong.. just a little more work.

You are right and I know that a "SOLO" is simply a marketing term and in fact it is a full fledged qualified plan. That said I have one question... To be eligible to file an EZ , can you have other EEs besides the owner partner spouse combinations? I believe the answer to be no. And if I am correct then the "Solo" plan that has EEs other than the employer who simply are not eligible to participate due to age and service requirements, that plan needs to file a 5500... correct? The < $100,000 "no need to file" exception is only for owner only plans that are eligible to file the EZ (not plans with no eligible EEs besides the owner)... correct?

Ok.. here are the EZ requirements: Who May File Form 5500-EZ You may file Form 5500-EZ instead of Form 5500 if you meet all of the following conditions: 1. The plan is a one-participant plan. This means either: a. The plan only covers you (or you and your spouse) and you (or you and your spouse) own the entire business. (The business may be incorporated or unincorporated); or b. The plan only covers one or more partners (or partner(s) and spouse(s)) in a business partnership. 2. The plan meets the minimum coverage requirements of section 410(b) without being combined with any other plan you may have that covers other employees of your business. See the instructions for line 14c for more information. 3. The plan does not provide benefits for anyone except you, or you and your spouse, or one or more partners and their spouses. 4. The plan does not cover a business that is a member of: a. An affiliated service group, b. A controlled group of corporations, or c. A group of businesses under common control. 5. The plan does not cover individuals of a business that uses leased employees. The BOLD points may be the financial advisor's leg on which he is standing. If the part time ineligible EEs do not participate (do not meet the eligibility requirements and therefore do not enter the plan) can the employer then establish a Solo K?

I have a financial advisor who is of the understanding that a client can have a Solo K plan as long as the rank and file EEs are not eligible to participate (don't work the required 1000 hours). I told him that if he has EEs that are paid on a W-2 then they must be considered and therefore a solo plan can not be used. Bottom line... if a Solo K can file an EZ then it can be a Solo K... Agree? if not, then it is a traditional 401K plan subject to ADP/ACP testing. If someone can spell it out better I would appreciate it.. I think that simply someone confirming my statement will be enough. Thanks!

I recently purchased a small book of business (about 15 or so plans) and inherited the Datair system with the plans. So far I like the system and the forms (5500) system that piggybacks the admin system. Relius is ( I think) more pricy than the Datair system. I dont have that much experience with either. I am only responding since noone has who uses the Datair system. So far the service with Datair has been excellent. I say that because I did not go through any formal training and when I have a question (no matter how simple) thay respond in a snap!

Is that the standard procedure.. if a plan sponsor fails to enroll an eligible EE the plan sponsor is then liable for the missed deferral and match (the missed EE will receive the average of each) even if the EE decides once enrolled not to defer?

To the participant that was overlooked? In essence the company is going to make the deferral for the participant and match it as well?

Taking over a SH 401.... Just told by the financial advisor go-between that the client had an EE that was eligible to enter and defer on 1/1 but was not enrolled. The EE as a result ended up missing out on the ability to defer during the period from 1/1 to now.... and also missed out on the SH match. Is EE entitled to make up the missed deferrals and receive the missed SH match? (I would think so) Are there any other issues that I should be concerned with? I appreciate the help!

"dumping the dogs" could be a tough pill to swallow... especially if the outlook is that the dogs will recover. An unfortunate situation.... I am sure the plan sponsor is looking at his/her fiduciary responsibility and doesn't want to be bitten by one of the Dogs!!

It is not a daily val plan... but then what of the $ taken out of the last payperiod of the year which doesn't hit the account until after the year end? Are you saying that in that situation you would not count the money as the previous years deferral? And that is considered "Standard" practice ?

Yes... The $ that was taken from the paycheck which was part of the 3/04 year will be considered 3/04 deferrals and accounted for as "receivable". It is the way I thought... Thanks for your imput.

March year end.... March quarter investment statement received and all activity accounted for. My question is .. do you take into consideration that an employee may have deferred during the last pay period in the year and the $$ has yet to hit the account? Or do you just go with what you see as of 3/31.

My feeling towards pension contributions is that it is the gravy added on top of the beef (their compensation).... While it is their money once fully vested and they retire (or terminate), it is not their money until then. It is $$ that the EE would never have seen if there wasn't a plan at all. For an employee to ask for their contribution as compensation instead of adding it to the plan is an honest question. What the EE doest't know is that a plan has certain rules that it must follow for it to be in existance at all. To honor their request is asking alot, taking into consderation possible fallout like other EEs wanting to follow suit, in addition to the administration expenses to provide the EE that option. I know this doesnt offer a solution to your problem... It is just what I tell a client who has an EE with the same desire. I also tell the sponsor if the EE needs more compensation, give them a raise. That usually ends the conversation and the EE is told it can't be done. Just about everyone lives beyond their means.... On a side question... has anyone seen this as a common question lately? My clients are small closly held PCs with between 3-5 EEs. I have been asked this same question more frequently than in past years. The economy could be fueling this desire by EEs to have their $$ now rather than later (to make ends meet)

Can someone tell me how to find a lost terminated EE? Doesn't the IRS have a service where you provide the SS # ? Thanks!

I understand.... I think I may change my name to "Kermit " and use his avatar until I shed my green (in addition to learning to look outside the box)

Call me "green"... you can amend a plan retroactively? Wouldnt that be like establishing a plan after the year end?

The notice timeing was what I was after... 30 days. And it has to be done before the start of the new plan year? I dont know about the other's deferring.. it is a valid point but though. What if the client decides to remove the K feature all together... is there a notice requirement in that situation?