The Year In Review – New Year’s Wishes from ACI

It’s that time of the year again, when we make some wishes and resolutions for next year. 2010 is coming to an end in what seems to have been too quick and 2011 is peaking from around the corner. Excitement and hopefulness abound. This year we saw the groundbreaking enactment of healthcare reform and the regulations on 408(b)(2) come one step closer to final, Republicans took over the House, the Bush Tax cuts were extended and the stock market bounced up and down unsure of which way it wanted to go. A volcano which most of us can’t even attempt to pronounce “Eyjafjallajökull” erupted in Iceland keeping our Director, Consulting Practice, Tobi Cogswell, out of the country longer than expected (we did get her back) and finally ending in other good news: 33 miners were rescued in Chile.

ACI would like to wish you all a Happy New Year and a prosperous 2011. Here are some wishes from our staff:

May 2011 bring prosperity to your business and a new awareness to your plan participants as to the importance of saving for their own retirement.
May your 2011 be successful and may you leave your work at the office when you go home.
-Alison Murray, QKA, QPA, ERPA
Lead Administrator, Manager
To good health and may you also realize your goals both personally and professionally in 2011.
-Yariel Chiong
Marketing Manager
May you prosper in 2011!
May you have enough prosperity to make a substantial contribution to your plan!
May your employees learn the art of saving for their retirement!
May you have peace, love and joy!
-Gerri Wheeler
Consulting Administrator
My wish for you: curiosity, excitement, wonder and success, both personally and professionally. Call and tell me, I’ll be so happy for you.
-Tobi Cogswell
Director, Consulting Practice
May you balance the benefit of savings versus consumption to allow you to have greener balance sheets both personally and professionally.
-Cortney White
Business Development Manager
Cheers to a new year and another chance for us to get it right. Let ACI become a part of your team and you will have your chance to get it right this year.
Happy New Years!
-Sabrina. Fendley
Assistant to the President
May we all retire in 2011!
But if we don’t, may we fit into one of two categories:
* Those of us heading to a dreamy retirement with a plan at ACI, and
* Those of us at ACI helping plan your retirement dreams.
-Jeff Esmond, ERPA, CPC, QPA, QKA
Consulting Administrator
As we begin a new decade my wish for our clients and their advisors for 2011 is to get America retired, starting with the Baby Boomers. In my view it takes a proactive team to accomplish this result.

We would love to be on your team.

Happy New Year!
-Pat Byrnes, COPA MSPA, EA, MAAA
President

There's still time to implement a qualified retirement plan for 2010

The clock is ticking. Business owners who wish to implement a qualified retirement plan for 2010 in order to take a corporate deduction and pay less taxes, must sign a plan document by December 31, 2010. Money does not need to be contributed by December 31st but a document must be signed.

Regardless of how old you are, or how many employees you have, we will work with you and your CPA to meet your needs.

One beautiful scenario is to implement a profit sharing plan for 2010, and activate 401(k) provisions effective 1/1/11. This will allow you to make a profit sharing contribution and take a tax deduction for 2010, and allow you and your employees to personally begin to participate preparing for your retirement in 2011. This will also give your financial advisor time to determine the appropriate recordkeeper for you, complete the contracts and enroll your employees before the first 401(k) deferral (generally the first payroll in January).

You have until September 15, 2011 to contribute the profit sharing contribution that you deduct for 2010.

It's a win win WIN but time is running out. Contact us right away to design the best plan for you.

Cortney White Tobi Cogswell Jeff Esmond (Hawaii Office)
(310) 212-2607 (310) 212-2623 (808) 389-5979

October 28, 2010

Retirement Plan Limits for 2011 Announced

On October 28, the Internal Revenue Service announced the cost-of-living adjustments that will be applied to the dollar limits in all tax-qualified retirement plans in 2011. The limits apply to calendar year plans, if you have an off-calendar plan year end, contact your plan administrator to see if there are any changes to your plan.

Defined Benefit Plan LimitsThe limitation on the annual benefit under a defined benefit plan remains unchanged at $195,000.

Defined Contribution PlanIndividual ContributionsThe limitation on contributions made on behalf of an individual to a defined contribution plan remains unchanged at $49,000. Individuals will still be limited to contributions of 100% of compensation or $49,000, whichever is less.

401(k) DeferralsThis dollar limitation on employee deferrals into 401(k) plan remains unchanged at $16,500.
This is a calendar year limit regardless of plan year end.

Catch-Up ContributionsFor individuals age 50 and over, the catch-up contribution remains unchanged at $5,500.
This is a calendar year limit regardless of plan year end.

Annual Compensation LimitsThe maximum annual compensation that may be recognized by a plan remains unchanged at $245,000.

Key EmployeesThe dollar limitation for determining whether an employee is “Key” for officers in a top-heavy plan will remain unchanged at $160,000.

Highly Compensated Employees

The dollar limitation on compensation used to determine which employees are considered highly compensated remains unchanged at $110,000. Thus, employees who earn in excess of $110,000 in the plan year beginning in 2010 will be considered highly compensated for the plan year beginning in 2011 and employees who earn in excess of $110,000 in 2011 will be considered highly compensated employees in 2012.

401(k) Rollover Bill Passed by Congress- H.R. Bill 5297

By Alison Murray & Yariel Chiong

With the recent passing of H.R. Bill 5297, 401(k) participants of eligible plans can immediately roll over all or part of their account balances into a Roth 401(k) Plan. To allow for this the plan will need to be amended. Consideration should also be made as to the viability of allowing Roth conversions within the Plan as well as allowing for Roth deferrals. If the rollover is made this year, the participant can elect to pay the tax on the money rolled over in equal parts in 2011 and 2012 helping to ease their tax burden. These rolled over funds will earn tax-free investment income and will not be taxed when the participant receives a distribution.

Depending on the participant’s tax bracket and future tax bracket this could reduce their tax liability. Participants considering this should ask themselves:

• Can I afford to pay the taxes over the next 2 years?
• Do I anticipate being in a higher tax bracket when I retire?
• Do I feel confident that the taxes I pay now would be less than the taxes I would pay later if I did not convert funds into a Roth 401(k) resulting in a financial benefit to me?

Contact your ACI Plan Administrator if you would like more information.

Ever Wonder What Clients Think About Your Business?

By Yariel Chiong

At ACI, we have built a brand that truly believes in being client centered; always putting the client first and listening to their comments and suggestions. We wanted to take a moment and just brag on ourselves by sharing with you some of the great compliments our clients have told us recently:

“Alison - You are truly an amazing speaker who held my interest and explained everything thoroughly.”

“Hannah - You know no one ever really chooses to be put between a rock and a hard place but I'm just really glad that I came across you to help me with this. Know that I appreciate all you're doing.”

“Tobi - I have put ACI before my mother on my speed dial.”

We appreciate all the great compliments we receive from our clients and our ACI team shares them internally. ACI has been in business for over 26 years; one of the reasons we have been able to accomplish this is by having a staff who believes in creating happy and satisfied clients. ACI is able to repeat this experience for all our new and existing clients.

Tell us what you think. We’re not resting on our laurels here. Our goal is to make you a raving fan and then brag about what you say next!

BONDS COVERING NONQUALIFYING PLAN ASSETS

By Gerri Wheeler

If you have nonqualifying assets in your plan, you now know that the insurance companies are charging higher premiums to cover those assets. Recently, a client of mine received a quote for $3,000 for a one-year bond that covered $1.75 million of assets. In contrast, if he did not have non-qualifying assets, his bond would have been about $600 for a three-year bond, which is an $8,400 difference.

Creative Workaround

Consider obtaining two or more general ERISA bonds from separate approved bonding companies. The IRS issued Field Assistance Bulletin No. 2008-04 that provides guidance to agents who review plans under audit. In that bulletin, guidance states that a plan can obtain multiple bonds from multiple surety companies as long as the company is on the Department of Treasury’s list of certified surety companies.

Let’s take the client referenced in the first paragraph; he could obtain an ERISA fidelity bond for $1,000,000 from his current certified surety company. Then obtain an additional ERISA fidelity bond for $750,000 from another certified surety company.

Alternatively, the plan fiduciary could cover the qualifying assets and specifically designated non-qualifying assets under one ERISA fidelity bond and obtain an additional ERISA bond for the remaining non-qualifying assets from another certified surety company.

Save some money, do some shopping and get the results you want! If you need the Department of Treasury listing, please contact your Consulting Administrator at ACI and they will be glad to provide you with the listing.

References: 29 C.F.R. § 2580.412-21, 29 C.F.R. § 2580.412-20

ACI RENEWS ASPPA RECORDKEEPER CERTIFICATION- STILL IN A CLASS OF OUR OWN

By Yariel Chiong

The Department of Labor (DOL) defines who is considered a Fiduciary to the plan and their responsibilities to plan participants and beneficiaries. As a responsible fiduciary, one of the most important responsibilities is to select a service provider for the plan, gathering information about their business practices and quality of service.

ASPPA and CEFEX have partnered to offer third party auditing of service providers which helps plan sponsors assess the competency of their Third Party Administrators.

ACI has recently undergone the renewal of our ASPPA Recordkeeper Certification. We still maintain as being the only ASPPA Certified Recordkeeper in California. This is a testament to our dedication to our clients and advisors in offering them a firm which is:

1. financially sound
2. following fee disclosure guidelines under the DOL’s proposed 408(b)(2) regulation
3. trustworthy and ethical in its business practices
4. reducing risk for the plan sponsor and their employees
5. using secure IT systems
6. defining quality control and management systems with clear processes and procedures

The certification closely resembles the ISO 9000 certification given to manufacturing firms and is performed by an outside auditing firm. ACI has gone through extensive reviews with 17 critical practices and over 100 separate criteria all to ultimately give our clients peace-of-mind.

Contact an ACI Consultant or Administrator to learn more about why you should be working with an ASPPA Certified Third Party Administrator such as ACI. The proof is in our quality staff and their work.

Some Funding Relief for Defined Benefit Plan Sponsors

By Yariel Chiong & Alison Murray

On Friday June 25, 2010, President Obama signed the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (H.R. 3692). This Act gives plan sponsors of defined benefit plans new options for required annual contributions, giving some much needed relief to cash strapped employers hit by the economic downturn.

Under the Pension Protection Act of 2006 (PPA) the difference between the value of benefits earned by participants and the assets in the plan is called the shortfall amortization base. Contributions must be made to the plan to make up this shortfall over a 7 year period.

Single-employer plans are given 2 new amortization options under H.R. 3692 for the shortfall amortization base amount recognized under the ERISA and IRS Code. The “2 Year Plus 7 Year” option gives plans sponsors 2 years of interest-only payments plus an additional 7 years for the remaining balance. The “15 Year” option gives employers 15 years vs. 7 years for payment of the shortfall amortization amount.

This relief is available for any plan year for which the minimum funding deadline has not yet been met (8 ½ months following the end of the plan year). So this relief would apply for plan years ending on or after October 31, 2009 and is available through plan years ending in 2011. If employers choose to apply for 2 plan years they must elect the same type of extension for both years.

Multiemployer plans are given minimum funding requirements determined on a ledger. Under the Act the amortization level may be increased from 15 years to 30 years.

The Act has also extended the Worker, Retiree and Employer Recovery Act of 2008 allowing the funded status determined for 2008 to apply for 2009 and 2010 keeping plans from being frozen if they fall under 60% funded during those years.

Although the new Act does not release employers from their contribution requirements to the plan, it does allow them to free up more cash which may be used for other business expenses.

Contact your ACI Consultant or Administrator for more information and how these changes could be of benefit to your current plan by lowering your minimum required contribution.

Fee Disclosure for the People

By Yariel Chiong

While “fee disclosure” is currently not mandated by government, Chairman of the Committee on Education and Labor, Senator George Miller has been one strong advocate fighting to bring fee disclosure back into the H.R. 4213 bill. The disclosure which was based on the “401(k) Fair Disclosure and Pension Security Act” authored by Senator Miller was included in the May 28, 2010 version approved by the House of Representatives. But as of June 8, 2010, the bill has been stripped of the fee disclosure in the Senate’s version. The 401(k) fee disclosure would have informed plan participants of fees being charged to them by service providers. This fee disclosure will most likely not make it back into the bill.

The reason for the Senate’s exclusion of the provision is because they feel they will derail the Department of Labor’s (DOL) own fee disclosure efforts proposed by regulation 408(b)(2) which will mandate service providers to disclose compensation to plan sponsors once passed.

ACI discloses its fees to plan sponsors. As part of our pro-active company culture we updated our engagement letters over 2 years ago to adhere to the DOL’s proposed regulation on fee disclosure.

Some of the things clients can expect from ACI:

1. Fee transparency allows them to see where their money is going
2. An ethical company which charges fairly for their services
3. We share revenue received from vendors with our clients sometimes covering all of our cost to the client
4. An experienced staff with an average of over 15 years of experience

ACI is on the client’s side. We pride ourselves on being on the forefront of fee disclosure from service providers and will continue to provide you with information on the proposed H.R. 4213 bill and 408(b)(2) regulation.

Contact us if you would like more information on fee disclosure.

IRS Questionnaire Update

By Yariel Chiong

We recently contacted our clients and advisors to let them know that the IRS is conducting a random Compliance Check of 1,200 401(k) Plans. Plan Sponsors who received the questionnaire have 90 days (without) extension to complete and return it. Not completing the questionnaire automatically will result in an IRS audit.

Plan Sponsors should make sure to provide complete and factual answers to the detailed questions regarding their 401(k) plans. Not understanding, or partially answering questions may result in costly enforcement by the IRS. Immediately contact your ACI administrator who can help you answer these questions on a time and charges basis.

The purpose of the IRS questionnaire is to determine the following:

1. Potential compliance issues
2. Any operational Issues
3. Additional education and outreach guidance that may be helpful for the IRS to provide plan sponsors to improve compliance

NOTE: Some multiple question answers provided are unacceptable under the law and will lead to an IRS audit. There are also similar questions repeated throughout the questionnaire, and plan sponsors should be aware of the relationship between the questions. Be careful not to inadvertently answer a question which is legally unacceptable unless it is factually the correct answer.

If you have received a questionnaire contact your plan administrator with the compliance questions. We will answer these questions for you.

Changes to EFAST2 e-signature

By Yariel Chiong

The DOL has announced a new option that allows form preparers, such as ACI, to electronically sign 5500 forms on behalf of the Plan Administrator (client). This new option will be offered to our clients which do not have access to the internet or do not wish to receive signing credentials (User ID and PIN).

EFAST2 which applies to plan years beginning in 2009 states that Forms 5500 and 5500SF must be filed electronically with the Department of Labor (DOL). The Plan Administrator is required to receive signing credentials in order to electronically sign the Form 5500/5500SF posted by ACI to the FT Williams website. The client transmits the signed return to the DOL and also retains a physically signed copy of the return for their records. Instructions on how to electronically file your return were posted on our ACI blog in April and can be viewed at any time.
The EFAST2 I-File system has been updated to include a signing credential for service providers. In order to have ACI electronically sign on behalf of clients the following is needed:

1. Written authorization from the client will be required to allow us to electronically sign on their behalf using our credentials. This is different than the credentials the client receives from the DOL.

2. A paper copy of the Form 5500 must be manually signed by the employer and a pdf copy of the signed copy will be attached to the electronic filing done by ACI. Please note: the image of the first 2 pages of the manual employer signed Form 5500 will be visible on the DOL’s electronic public disclosure website. Having the manual client signature public visible raises the possibility of identity theft.

3. ACI will inform the employer of any inquiries from EFAST2, DOL, IRS or PBGC concerning the filing.

We recommend that plan sponsors still obtain their own signing credentials from the DOL and file their own Form 5500.

We will have more information regarding the new change soon for those clients wishing to have ACI sign the return on their behalf.

IRS Questionnaire

By Tobi Cogswell

The IRS announced last week that it will be sending compliance questionnaires to a number of 401(k) plans. These questionnaires are expected to go out at the end of May. They are 46 pages long. If you get one, you have 90 days (without extension) to complete and return it. Do not ignore it. It was confirmed last week at the NIPA Seminar that if you do not return the questionnaire you will be audited. Contact your plan administrator for help with the compliance questions. We will be happy to help you on a time and charges basis.

Protect Retirement Plans By Contacting Your Member Of Congress Now!

Congress is considering a proposal that will threaten the use of cross-testing used for defined contribution plans as well as combination defined contribution and defined benefit plan design. Specifically the ability to have different allocation formulas for different groups and the interest rates used in the calculation are in BIG JEOPARDY!

This affects the vast majority of small plans and many large plans. We need your help to send a strong message to Congress to stop this misguided proposal. Given this tough economy, now is not the time for Congress to make it more difficult to provide retirement benefits to employees.

We have made it easy for you. Please go to the link below and in a matter of seconds you can get the word out to your member of Congress that they should NOT pass any proposal negatively affecting retirement plans. Please feel free to get your employees involved since their benefits may be threatened as well.

Thanks for your support!

Pat Byrnes, COPA MSPA, EA, MAAA
President

In the “take action” block of the link please select Small Business Owner or Practitioner as appropriate.

For Small Employers please modify the 1st paragraph and Practitioners the 4th paragraph.

http://www.mmsend57.com/ls.cfm?r=239497387&sid=9445266&m=1003356&u=ASPPA&s=http://www.asppa.org/sp/CapWiz-Pages/Contact-Congress.aspx

Plan for Unforseen Disasters!

by Tobi Cogswell

Take this opportunity now to beef up your retirement plan and avoid unforseen disasters.

Take advantage of cost savings both as an empoyer and as a plan participant.

1) Employer contributions to a qualified plan are tax deductible;

2) Employee deferrals into a 401(k) plan are pre-tax

Don't just plan for a dignified retirement, plan for the ability to roll with the punches no matter what nature or life throws at you. Help your employees plan for this as well.

As you read this I am stranded in Ireland by a volcanic disturbance no one could have predicted. I have thousands of dollars in unplanned expenses for hotels and meals, phone calls, emergency prescription refills and the uncertainty of when I'll be able to come home.

Think of your retirement plan as trip insurance. You don't want to have to be counting your pennies and sleeping in the airport. You don't want to worry. We are living longer now than ever before; make sure you have enough so you can have a great life after retirement, not just an adequate one.

ACI's consultants will help make that happen. We will partner with you and your financial advisor to ensure your plan is designed to help weather the volcanic storm.

Call us today at (310) 212-2600 for an analysis of your plan design. Buy some peace of mind and potentially cost savings at the same time. Ask for Jay Luber - I'm writing this from Ireland.

EFAST 2

Please view the presentation for more information on how to electronically file your 5500.

EFAST 2

View more presentations from Actuarial Consultants, Inc..

Do It Right The First Time

-By Tobi Cogswell

We recently took over two cases from another Third Party Administration firm. We got these cases because:

• The other firm wasn’t pro-active. Everything was done last minute or after the fact.
• The other firm did no consulting. No choices were ever discussed with the plan sponsor.
• The other firm did not look at the plan design and make changes at the same time the amendment and restatement for EGTRRA was done, thereby saving the plan sponsor some money on document costs,
• The other firm did not return phone calls!

We also took over a 401(k) plan from a different Third Party Administration firm and we got this case because:

• The other firm never discovered that a stand-alone 401(k) no longer met the needs of this growing law firm.
• The other firm never discussed the advantages of having a safe harbor 401(k) and how that would eliminate ADP test failures AND satisfy top heavy.
• The other firm never discussed the benefits of having a cash balance plan.
• The other firm never disclosed they were receiving revenue sharing from the recordkeeper.

At ACI:

• We don’t have to be taught about client service.
• We understand problem solving.
• We disclose all revenue sharing.
• We want to design plans that will grow with your business.

Tell your friends about us.

Jay Luber – (310) 212-2607 for prospect and new client issues,

Tobi Cogswell – (310) 212-2623 for prospect and new client issues, and 5500 reviews,
Jeff Esmond – (808) 389-5979 for all business in Hawaii

5 Things you should know as a Sponsor of a Defined Benefit Plan

- by Pat Byrnes

Sometimes in life you learn the right things to do by observing when something went terribly wrong. On the front page of the Los Angeles Times business section on March 16, 2010 an article entitled “For CalSTRS, a bet that failed“ by Marc Lifsher is a stunning example of what not do to do with a defined benefit plan. That’s the government sector which is very different from the private sector.

Defined benefit plans are marvelous tools to solve…well, retirement planning problems. They can be very flexible and very rewarding too if you pay attention to a few things.

Here are my thoughts on private sector defined benefit plans:

1. Confront the brutal facts. When your business or profession is going through turbulent times, pay attention to your plan. Ignoring never helps. Surprises are worse if you wait.

2. Deal with a pro-active actuarial firm like ACI. The pro-active piece is very important. We contacted all our defined benefit clients at this time last year and discussed with them the thought of freezing their DB plans before anyone incurred 1,000 hours in the 2009 plan year. This needed to be communicated and executed by about mid May 2009, depending on the number of participants. Most decided to do so. They will be able to fund out their asset losses before they unfreeze those plans.

3. Plan Design matters. Your goals for the plan and the flexibility needed may be significantly different than your current document specifications. The Pension Protection of 2006 changed a lot…and it’s not all bad. Deductions have increased significantly. Baby Boomer entrepreneurs and professional entities have embraced cash balance plans in conjunction with defined contribution plans.

4. Coordinate the plan design and funding rules with the investment of the assets. Pay attention to how the investment of the assets compares to the plans underlying assumptions. Make a conscious choice on the investment decisions. If the underlying plan interest rates are in the 5%-6% level and you shoot for a 9%-10% growth rate, know that you are taking a risk.

5. Be willing to think differently about your plan and the funding of your own retirement.
We are very skilled with these plans. We would be happy to do a quick review for you if you provide us with a signed copy of your plan document and latest actuarial report. Please call me at (310) 212-2612 or email me at: pat.byrnes@acibenefits.com.

Change for Tax form reporting for 2009 Plan Years!

By Alison Murray

Medical Groups and Law Firms often have a retirement plan configuration where individual PC doctors or attorneys are in their own Defined Contribution plans, with the staff in a separate plan. The entire arrangement is considered a Controlled Group. All plans are combined for various compliance tests. Until 2009, the individual PC’s, as plans of a controlled group, could not file a short IRS Form 5500-EZ. The individual PC’s were also required to have a bond.

The definition of a “one-participant plan” has changed for purposes of filing 5500’s for 2009 plan years. Even if you are part of a controlled group, if your personal PC-owned plan contains only you, or you and your spouse, you can file a Form 5500-EZ. In addition you are no longer required to have a bond covering the assets of the trust.

If your plan assets are $250,000 or less you don’t have to file anything! The only requirement is that if you terminate your plan you must file a form in the final year.

What does this mean for you?

5500-EZ’s must still be filed in paper form. They can not be filed electronically. It’s one less thing for you to have to learn this year and you can concentrate on doing what you do best.

The cost of 5500-EZ preparation is less than the cost to prepare a regular Form 5500 so you’ll save some money!

5500-EZ’s are not uploaded to public information. You have more privacy.

Larger plans consisting of partners or partners and spouses only will also enjoy this newly-minted definition of “One Participant Plan”. Take advantage of it.

Remember, you heard it here first!!

ACI Expands to Hawaii

By Yariel Chiong

We are pleased to announce that we have opened our doors in Hawaii and are now doing business there.

Our Hawaii office is led by Jeff Esmond, Consulting Administrator. Jeff began his career in the retirement industry in Honolulu in 1991 and most recently worked for Aon Consulting in Honolulu doing consulting and plan administration for small and large defined benefit and defined contribution plans.

Jeff holds the Qualified Pension Administrator (QPA) and Qualified 401(k) Administrator (QKA) designations from the American Society of Pension Professionals and Actuaries (ASPPA) and is currently working on ASPPA’s Certified Pension Consultant (CPC) designation. Additionally, he also recently was the first Hawaii resident to have received the new federal designation of Enrolled Retirement Plan Agent (ERPA) which means he has been admitted to practice before the Internal Revenue Service.

We are all very excited at ACI as we begin this new venture.

ALOHA

How to Identify Quality Recordkeeping

By Gerri Wheeler

Today I received such a great question from a participant in the “Plan Administration Seminar” that ACI sponsors that I had to share. The participant asked, “What can a Plan Sponsor look for to assure that their Recordkeeper is providing quality recordkeeping?” In response, there are several touch points that we can recommend:

· Monitoring the “Ins” – As a Plan Sponsor, you have the ability to track and monitor the contribution actually made to your plan. When you make a deposit of deferrals, matching, loan repayments, rollovers or employer contributions, double check that the totals imported match the totals received. If you can match your totals, you can be assured that the import has worked correctly.

· Monitoring the “Outs” – When a distribution occurs, review the amount actually distributed to the participant to the elections the participant made on their distribution election forms. Check for correct address. Were taxes withheld as directed?

· Paper Investment Elections (vs. Website) – Check to make sure that the Recordkeeper has correctly recorded the participant’s instruction on the investment election.

· Cash Account – does the activity in the cash account make sense? For instance, you can see your deposits that match payroll and the withdrawals that match the distribution instructions. Are forfeitures moved into this account when an ex-employee receives a distribution? Are there fees paid from this account, if so, to whom?

· Education – does your recordkeeper keep you informed of legislation that affects the operation of your plan? Do they provide reports that help you monitor the activities of the participants? Are they suggesting that an enrollment meeting occur?

If you have any other questions please don’t hesitate to contact an ACI consultant or your plan administrator. We have the knowledge. Let us share it with you.

News Flash: IRS Forms Must be Electronically Filed!

For plan years beginning in 2009, the form 5500’s must be filed electronically with the DOL

Paper forms will no longer be accepted by the DOL unless you are eligible to file a 5500EZ (only for those plans that are maintained by sole proprietors or partnerships, that are not part of an affiliated service group or controlled group and that do not have rank and file employees are eligible ).

This rule applies even if you don't own a computer! The IRS has recommended that if you do not have access to a computer, you use your local library, internet café or come into our offices.

The Plan Sponsor will be required to obtain a user name and PIN from the DOL (credentials) in order to submit the form 5500 electronically to the DOL.

There is a brewing controversy over the DOL’s refusal to allow the Plan Sponsor to share their credentials with third party administrators for purposes of filing the 5500.

Please see the content of an email below from ASPPA (American Society of Pension Professionals & Actuaries) that includes a Petition to Phyllis Borzi, Assistant Secretary/EBSA US Department of Labor. You may want to sign and electronically file this Petition.

Regardless of the outcome on the sharing of the credentials, ACI will be setting up a webinar on our website that you can review at your convenience on how to file electronically and how to set up your DOL signing information. We anticipate this webinar will be available in the next few weeks.

We recognize that you will be going through a learning curve on this new requirement. We are committed to helping you through this change. Your ACI administrator will be co-coordinating with you in setting up the plan administrator, plan sponsor and CPA if applicable for the electronic filing.

The following is an email from the American Society of Pension Professionals & Actuaries (ASPPA) regarding the EFAST2 filing.

Sign the EFAST2 Petition!

ASPPA is soliciting your support in asking the Department of Labor to modify its position with regard to the sharing of EFAST2 credentials. Many practitioners have expressed concern that DOL’s current position will hamper their efforts to assist clients with timely filing of Form 5500. IRS and PBGC have developed systems that recognize the key role played by service providers in achieving compliance. ASPPA proposes that DOL implement similar rules so that filing signers could, at their option, choose to share their credentials with their service providers to facilitate electronic filing.

Read the entire letter here.

If your firm wishes to endorse our efforts, please click here and you can provide the necessary information to have your firm’s name added to the list of signatories on the above letter. Be sure you are authorized to sign on your firm’s behalf and only one member of your firm completes the form.

You do not have to be a member of ASPPA to support this effort. ASPPA believes there is strength in numbers and hopes you will take this opportunity to let DOL know your firm is committed to compliance.

Thank you for your support.

4245 North Fairfax Drive Suite 750 Arlington, VA 22203 703.516.9300 www.asppa.org