Be Real

When my grandmother was going in for surgery to remove the tumor on her Pancreas, I told my grandmother how much I loved her and I remember her telling me that she knew what I said was real. She told me that while other people profess love, she knew my feelings where genuine. When she died from complications from the surgery a couple of days later, there were a couple of relatives who felt a little uneasy about what my grandmother. Maybe they felt a little insecure in their feelings, maybe they felt guilty.

When it comes to feelings, people will know when you’re genuine and when you’re not. As a plan provider, you need to care for your clients and your clients know whether those feelings are genuine or not. When things go wrong or there are issues to discuss, they know whether you care for them or not.

Many years ago, I was going to a meeting with a client with that semi-prestigious law firm’s managing attorney where the chief operating officer was a former work associate. The chief operating officer was telling the managing attorney all about his kids and how his son was so involved with high school hockey It was interesting to listen and I certainly had no issues Afterwards, the managing attorney pulled me aside in her car and told me that she could care less for what the chief operating officer had to say about his kids. In the 20 years, I’ve been in this business, I have never heard anyone talk about their client that way. Clearly later, the client probably knew about those feelings and a change of law firms was made. You have to care for your clients and you have to be genuine in that care.

Dealing with clients is like any other relationship, they have to be properly managed and every client is different and should be managed accordingly. Clients have different needs and different temperaments. They often joke that 20% of your clients will take up 80% of your time and I’ve found that’s true. There is no one size fits all in dealing with your client, so every relationship has to be treated differently.

You can always try to fake interest or concern for your client, but over time, that lack of genuine feelings will be detected.  So be realistic in your feelings and relationships with your client.

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That possible RMD issue and what it means to you

While President Trump signed an Executive Order that directs the Department of Labor to promulgate regulations to make it easier for companies to join multiple employer plans, he also directed the Internal revenue Service to change the required minimum distribution  (RMD) rules as it pertains to the factors used in calculating them to reflect that people live longer.

By increasing the factors for RMD distributions to reflect that people live longer, people who have to take RMD distributions will end up taking out less money each year since actuarially, people do live longer.

What does that mean? It means clients who have Individual Retirement Accounts will be able to keep more of their money in those clients, so you will retain more assets under management. For your retirement plan clients, that means people working after 70 ½ and who are also 5% owners will be able to keep more money in those plans as well (as non-5% owners don’t have to take out RMDs until they retire).

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IRS to target excess 401(k) deferrals

When I do my own taxes and the income taxes for friends, the software I use will alert me when I make a mistake and perhaps, enter an amount in the 401(k) deferral box on Form W-2 that is in excess of the annual limit for plan participants. The annual limit ($19,000 in 2019, not including catch-up) is per participant, no matter how many 401(k) plans they’re in.

Yet, there are many individuals that somehow exceed the limit. The problem is that the Internal Revenue Service (IRS) will be after them.

The Treasury Department’s Inspector General for Tax Administrator (TIGTA) has a report that suggests that many 401(k) workplace retirement plan savers are pushing the limits, which is costing the U.S. Treasury.

TIGTA’s recommendation: bring lax employers and errant taxpayers into compliance. The IRS’ response: It will beef up employer education and conduct targeted audits for taxpayers who appear to have excess 401(k) deferrals, especially those with multiple 401(k)s.

The TIGTA reports that many 401(k) plans don’t have controls in place to prevent employees from exceeding the annual limits. The problem usually arises when taxpayers get tripped up when contributing to multiple 401(k) plans.

Based on a sample of 2014 tax returns, TIGTA estimates that 1,400 taxpayers appeared to have gone over the limits when contributing to one 401(k) and would owe additional taxes of about $8 million if found to be noncompliant. An estimated 13,200 taxpayers who contributed to multiple 401(k)s potentially exceeded the limits and would owe additional taxes of about $33 million.


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That 401(k) Conference will hit St. Pete this March

I am proud to announce That 401(k) Conference will be emanating from the confines of Tropicana Field on Thursday, March 7, 2019. Information on this site will be provided when ready.

This will be in addition to our inaugural That 401(k0 Plan Sponsor Forum, which will be catered to plan sponsors. That will be held at the same place, the next day, on Friday, March 8.

Any plan providers interested in sponsoring one or both events should contact me.

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It could be you

Prior to starting my own law firm, I made many different employer changes over the years to the point that my position as the managing attorney of myown law firm is the longest time I’ve been employed at one place and that’s only 8 years.

Am I going to blame the employers I worked for? Sure, they were short in the Christmas bonus department and I thought they didn’t have any long-term vision, but the only common thread between these four employers was your truly. So rather than blaming them for that checkered employment history, the fault lies with me. Some birds aren’t meant to be caged and some people need to work on their own So rather than blame them someone else, it’s important to look within.

If you’re a narcissist, there is no point in reading your article because you’re always right (at least in your mind). If you’re like most of us, you may realize that if you have a pattern of client problems or employee problems or problems with working with other providers, it may make sense to look at yourself. When you look at what you do, you may realize some of the mistakes you made in developing and maintaining relationships. I’ve learned in life and in business, growing as a person is just as important, if not more than growing your business.

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A 401(k) Plan Sponsor Needs A Plan Review

My latest article for can be found here.

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The problem with committees

Many articles talking about good retirement plan practices will talk about the need for employers to set up retirement plan committees to manage their 401(k) plan.

While I agree that there needs to be some sort of process in place to run the plan, there are many instances when committee are a hindrance when they become a bureaucracy. I once joked that as an associate attorney at a semi-prestigious that if the managing attorney wanted to kill an idea, she’d create a committee for it. Recently, someone at synagogue told me that they created a committee to improve the members’ experience and there are 37 people on the committee.

A committee to handle a 401(k) plan has to be put in place to actually run the plan, it can’t be created as another roadblock in getting the plan run in a prudent manner. If it becomes a bureaucracy and is paralyzed from acting in the best interests of plan participants, then the committees become part of the problem and not the solution.


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Sure it’s the employer’s fault, but come on now

With plan administration, there are so many mistakes that can be made and most of the time, it’s the fault of the plan sponsor and the third party administrator (TPA). However, there are many times were the error so explicit, that the TPA has no excuse to let things go without trying to let the plan sponsor that the bleeding needs to be stopped.

For example, not filing a Form 5500. How many plan sponsors don’t file a 5500, even if one might actually have been prepared by the TPA. Regardless of whether the TPA prepare it or not, they should be on notice if the plan sponsor fails to timely file the 5500.

Same can be said about late salary deferrals. If a 401(k) plan sponsor has gone a few months without deferral deposits, shouldn’t the TPA let the plan sponsor know? As Sarah Palin would say: “you betcha.”

Yes, it’s the plan sponsor’s fault, but a good TPA can’t just stand out there as an innocent bystander.

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Speak up or it won’t get better

Many years ago, I was an associate at a law firm that worked with a third party administration (TPA) firm. One of the owners of the TPA was also the attorney who was my boss. During my single days, I had plenty of time and I learned how to play golf.  When one of our clients had a fundraising event, my boss looked far and wide to find employees who could play and he never asked me. I got ticked off about it, but I was being passive-aggressive by suggesting that I should attend.

When it comes to a plan provider, you also shouldn’t be passive-aggressive. If your plan provider isn’t cutting it or is doing something that annoys you, let them know. People aren’t mind readers and if you’re upset by their work, let them know, Let people have the opportunity to fix things by giving feedback when you’re not satisfied. Of course, if they’re doing a great job, let them know as well since compliments in this business are an appreciated rarity.

Things will never get better with a plan provider service if the plan provider doesn’t know that you’re not crazy about the work. So let them know before you quietly change plan providers without seeing if things could have improved.

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Classic Mistakes That Retirement Plan Providers Should Avoid

My latest article for can be found here.

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