Does a recordkeeper inform a plan sponsor about the long-term-part-time provision?

Tax law’s remedial-amendment regime often involves a few years’ lags between when a plan’s administrator implements a provision “in operation” and when the provision is expressed in the plan’s document, often an IRS-preapproved document.

For optional changes, recordkeepers seem to get a sponsor/administrator’s instructions—yes or no, this-way or that-way, even if many of these are obtained using implied-assent presumptions.

But what about a required change? If there is yet no document for a plan’s sponsor/administrator to sign or accept (and no choice that need be made), does a recordkeeper inform its customer about a plan provision that changes because ERISA commands it or tax law requires it as a condition of the plan’s tax-qualified treatment?

Imagine a plan sponsor has no lawyer, no third-party administrator, no adviser; only the recordkeeper.

Would such a sponsor/administrator know that it must ignore an exclusion the plan document states (and typically the summary plan description explains) to make eligible for elective deferrals those of its employees who meet the long-term-part-time conditions?

What have recordkeepers been doing? Does a recordkeeper inform plan sponsors? If so, how much does a recordkeeper explain about the long-term-part-time provision?

3 hours ago, Peter Gulia said:

What have recordkeepers been doing? Does a recordkeeper inform plan sponsors? If so, how much does a recordkeeper explain about the long-term-part-time provision?

Great questions.  The follow-up question(s) would be something like, "has the recordkeeper made itself a fiduciary?"

3 hours ago, Peter Gulia said:

What have recordkeepers been doing? Does a recordkeeper inform plan sponsors? If so, how much does a recordkeeper explain about the long-term-part-time provision?

We have been communicating the LTPT provisions since right after we caught our breath from CARES Act issues.  Webinars, monthly newsletter articles (repeated quarterly), "datasheets" (mini-whitepapers) and lots of other communications.  We charge RMs with actually having conversations with clients (wow, go figure - actually talking to clients) and targeted clients who had part-timers on the payroll - including medical PRT employees, seasonal employees, and others.  We even targeted off-calendar year clients, where under S2019, some part-timers could become LTPT participants in 2023.  If our clients haven't heard about LTPT, and their role in facilitating that provisions, we should fire them as undesirable clients.

9 minutes ago, david rigby said:

Great questions.  The follow-up question(s) would be something like, "has the recordkeeper made itself a fiduciary?"

Absolutely positively not.  We "inform."  We don't decide.  We are a "nondiscretionary  directed ministerial service provider" with a wealth of knowledge we like to share with our clients - always for "review by counsel!"  Whether they do or not, well ....

MoJo, thank you for sharing your great information.

BenefitsLink neighbors, how about other recordkeepers? Do they inform plan sponsors (even if somewhat less diligently than MoJo describes)? Or are there some that are less helpful in meeting an unadvised plan sponsor’s information needs?

I am no longer a record-keeper, thank goodness, but in my previous life we absolutely informed our clients in a way very similar to what MoJo described.  Like MoJo, we did not advise or decide, but we did sometimes talk to clients' attorneys at their request and provided links to helpful resources.  Smaller clients seldom have attorneys or accountants who are conversant with benefits law!