Responsibility for maintaining plan document after client leaves??

[maverick]

One of my co-workers attended Corbel's advanced penson conference in Chicago last month and asked one of the presenters "Who is responsible for maintaining a plan document after a client leaves?" (i.e., we no longer do the record- keeping). She may have misinterprepted the answer, but here it is anyway. If a client leaves and has tpa X do the recordkeeping, we are responsible for maintaining the plan doc (assuming they don't adopt another sponsor's doc)!! He went on to add that this responbibility goes on for several years (3 or 5, I forget which).

Now here's how I think this works, someone please give me a sanity check.

- Once a client leaves, he's on his own re: the document. BTW, I have been telling departing clients this in writing.

- If a plan terminates, we would make sure the doc has been amended for recent law changes, i.g., GUST, and that's it.

Thanks fellow soldiers in the great ERISA war.

Maverick

[david rigby]

Whose responsibility?

The plan sponsor.

[Appleby]

If you send a notification (restatement information) to your former client, you have done more than you are required to. If your client went to another plan sponsor, then it is that new sponsor’s responsibility to ensure that the client restates the plan, not yours. That’s why some employers are leaving their current plan sponsor and trying to obtain certifications from plan sponsors who have already received their opinions letters from the IRS

[Moe Howard]

Am I correct in thinking that when Pax says "sponsor" ... he is referring to the plan's employer... and when Appleby says "sponsor" he is referring to a service provider that sells its IRS approved prototype plans ?

I thought that the plan sponsor (employer) remains constant and has the duty to make sure that a legit plan document is always in place .... but that a plan's prototype plan service provider is not the sponsor and has no such fiduciary duty.

[Appleby]

Moe,

You’re right about the context in which I used the term

[John A]

Let me change the question slightly:

If a client is using a prototype document sponsored by TPA V or a partner of TPA V, and the client leaves TPA V to go to TPA W, does TPA V or the partner of TPA V have any responsibility to the ex-client regarding notification of future changes to the prototype? At what point, if at all, does the ex-client now have an individually-designed document if the document is not restated onto a document that TPA W supports in some way?

[Dave Baker]

I think the terms of the IRS revenue procedure on master & prototype plans have something to say about such a situation. I'm not sure how they'd be viewed in the context of a lawsuit over damages resulting from a failure to keep the document up to date; for its own protection I'd think TPA V would want to write to the employer and say "you're on your own now, fellah" and expressly disclaim responsibility to provide the employer with any needed updates.

[david rigby]

If the employer is confused about this, then anyone else who comes in contact with the situation might want to issue a gentle reminder. That might include prior TPA, new TPA, attorney, auditor, trustee, etc. However, the employer should always be aware that he/she has ultimate responsibility for the document. It is his plan.