Please view the presentation for more information on how to electronically file your 5500.
Thursday, April 15, 2010
Friday, April 2, 2010
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:
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
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!
- 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.
- 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.
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
Friday, March 19, 2010
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.
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.
Friday, March 5, 2010
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!!
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!!
Monday, February 22, 2010
ACI Expands to Hawaii
By Yariel Chiong
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 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
Wednesday, February 3, 2010
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.
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.
Tuesday, January 19, 2010
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.
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.
Subscribe to:
Posts (Atom)
