The Rosenbaum Law Firm P.C. Blog

I own a piece of a business and provide services to it, through my sole proprietorship. Pretty much all of that business for the sole proprietorship is performing services for that business I own a piece of.

This type of situation arises all the time, usually through a professional. The problem is when that sole proprietorship has a retirement plan and that affiliated business does not or has a retirement plan with lesser benefits.

If you have a situation like this, you might have an affiliated service group issue, and it’s advisable to contact someone like me. You might have a retirement plan coverage issue.

Manute Bol and Gheorghe Mureșan were 7’6” and 7’7”, but were pretty bad players in the NBA. It takes more than height to play basketball.

When it comes to hiring plan providers, years of experience can be as important as height in basketball, because I’ve known plenty of plan providers with 20-plus years of experience who were terrible in their jobs. I’ve known plan administrators with a handful of years of experience, who were excellent.

In the end, years of experience are like any number. Not always is that it’s a measure of competence and excellence.

I grew up in Brooklyn and the area I originally lived in is called Midwood I lived right off a street called Avenue M. It has always been a Jewish neighborhood and over the last 35 years, it’s become more Orthodox.

Proof of that is a fish store located on Avenue M, a block away from the elevated Q train. The fish store is owned by a Korean family and they’ve been around for more than 30- years. When they first opened in the 1980s, they sold fish, which was next to shellfish (which isn’t Kosher). A few years later, they relegated the shellfish to the opposite wall. Eventually, they got rid of the shellfish and started to be Shomer Shabbos (closed on Saturdays and all other Jewish holidays). In 2019, they are still around and doing well. They knew where the customer base of the neighborhood was heading and they adjusted. They didn’t stubbornly decide to keep to the status quo. They realized that the customer base was changing and they changed their operation to meet that changing demographic. They’re still in business while the greatest Greek diner that ever existed a few blocks away, Caravelle, is long gone.

As a plan provider, you need to be ahead in the game identify where the potential customer base is going, and make sure your services and pricing meet that need. make sure your services and pricing meet that need.

Social media and living in a house full of narcissists have educated me on navigating personalities and spotting insecurities from a distance.

I always said I used to think I lived in a normal place until I ventured into the local community groups and deal with the morons in the community. What I realized over time is that I created something called the “Mirsky Theory,” the idea that what you see is a lot of narcissism and insecurities in people online. What you see in a community group is not an accurate representation of the community because most people aren’t on Facebook, and a smaller minority of that, actually partake in the community groups. For those who partake in the groups, most just read the posts and comments without commenting on themselves.

We had someone who created one of the first community Facebook groups and he thought he was a star. He was just really a failed businessman who wanted to parlay his “fame” into some patronage job that he eventually lost because he wouldn’t campaign for a Sanitation commissioner candidate. The dummy didn’t know the function of a patronage job, you’re not hired for being smart or having a great personality. Now he’s cleaning grills and fences for a living.

So much of what you see in these groups are people who want validation of their feelings because they want you to know about a bad experience they had at a local business. Mind you, they never complain to the local business directly, they just need to bash them online. There is another set of people who just want free stuff. I’m waiting for someone to ask in one of the community groups on whether someone has a free car to give away. Then there is the group of people who need to put down people in the comments. This reeks of insecurity and the people who love to attack others are just flaunting their insecurity, they feel that by bashing others, they are making themselves higher in some way. Much like the people at work who would throw you under a bus in their idea of getting themselves ahead. These narcissists come in all shapes and sizes, some are just absolute failures in life and some have successful careers. One of these Facebook bullies got elected to a political position and then was ousted when all his bigoted Facebook posts came to life.

I just have never been threatened by someone else’s opinion and I get no joy from belittling others. But I’ve come to the point that I can no longer post in these groups and I could no longer comment because nothing good can come of it.

Financial advisors working on 401(k) advisors have happy clients, according to a new Fidelity survey.

Fidelity’s annual Plan Sponsor Attitudes Study, now in its 15th year, surveyed over 1,100 employers offering retirement plans. The survey found that not only do 90% of sponsors use an advisor for plan sponsor consultation and management, but 80% are satisfied with the plan achieving its goals, up from 74% in 2023.

81% of sponsors are highly satisfied with their advisors, up from 63% in 2019. Nearly 50% of surveyed sponsors report it is “very important” advisors guide HSAs—a 21% jump from 25% in 2023. 81% of plan sponsors said plan advisors should be allowed to work with employees outside their respective plans to support their broader financial planning needs.

Financial advisors working on 401(k) advisors have happy clients, according to a new Fidelity survey.

Fidelity’s annual Plan Sponsor Attitudes Study, now in its 15th year, surveyed over 1,100 employers offering retirement plans. The survey found that not only do 90% of sponsors use an advisor for plan sponsor consultation and management, but 80% are satisfied with the plan achieving its goals, up from 74% in 2023.

81% of sponsors are highly satisfied with their advisors, up from 63% in 2019. Nearly 50% of surveyed sponsors report it is “very important” advisors guide HSAs—a 21% jump from 25% in 2023. 81% of plan sponsors said plan advisors should be allowed to work with employees outside their respective plans to support their broader financial planning needs.

There is this scene in the comedy, Top Secret! where Nick Rivers (played by Val Kilmer) is having a nightmare that he’s back in school and has no idea where the college final is. He wakes up and realizes he’s being tortured and his happier with being tortured, knowing the college final drea, was a nightmare.

When I was younger and for decades, I would have a recurring dream that I was in school and I didn’t attend class the whole year and my graduation depended on that class. It was a little disconcerting when I’d have this “dream” years after I graduated. A friend from college said this recurring dream/nightmare was a fear of failure.

Living in my house with two overbearing parents who would verbally attack me if I didn’t do well in school, that fear seems to be justified. It was to the point of not disappointing them and avoiding the abuse, that I would lie about my grades or keep bad information about school from them. Lying is wrong, but when you want to avoid verbal abuse, you’ll do the wrong thing.

The fear of failure meant to me, that every little setback was going to be the end of the world. Whether it was the C+ in Civil Procedure I or not finding that first legal job so quickly, every piece of bad news would be some form of tragedy. It would even lead to issues at my first job where any crack by my boss, would lead me to be emotional and worried that I’d be fired pretty quickly.

The problem I learned was that no matter what I did, I could never please my parents. They had a high standard for me and a lower standard for everyone else, whether it was my sister, my brother-in-law (my mother idolized his folding techniques because he worked at the Gap once), or my Aunt and former Uncle who needed constant financial bailouts. The moment I became estranged from my parents, the moment those bad nightmares dissipated. I no longer had a fear of failure, I learned not to worry about things I couldn’t control.

When Hurricane Sandy decimated my home in October 2012 and no family member came to see whether my wife and kids lived or died, I didn’t panic and persevered. I thought of my grandparents and their tribulations during the Holocaust, losing so many relatives, but willing themselves to survive. I think that moment, I learned to see the light and not fear failing. 14 years later after starting my practice and dealing with so many financial issues over that time, I’ve paid off my mortgage and have enough of a nest egg to pay for my kids’ college and maybe buy another house. I may have a setback or two, but I will not fail and I will no longer dream about failing

I’m all for states requiring employers to offer a retirement plan or join the state-endorsed IRA program. It increases retirement plan coverage and as a member of the 401(k) industry, it can increase the potential client pool.

According to a study I read, 30,000 employers now offer a retirement plan through these mandates, whether it’s a private plan or part of the state IRA program. Regardless, I think states that have these mandates are a great way to market Pooled Employer Plans. Like many, I don’t trust the government much and would rather benefit through a private 401(k) than a public SIMPLE-IRA plan. I just think it’s a potential great source for clients for your PEP.

There are plenty of cases out there, arguing that plan sponsors that use forfeitures to reduce employer contributions rather than paying administrative expenses are creating a fiduciary breach and a prohibited transaction.

While most of my clients won’t be subject to any type of litigation, I can see one day when the Department of Labor will opine that it’s impermissible to use forfeitures to reduce employer contributions when participants can pay less in fees if they’re used to offset plan expenses.

So plan sponsors need to be concerned more about saving on plan expenses for their participants than saving a couple of shekels with their employer contributions.

The Internal Revenue Service issued interim guidance on employer matching contributions made to retirement plans related to qualified student loan payments (QSLPs) made by employees.

The guidance, Notice 2024-83 addresses issues that may arise for 401(k), 403(b), governmental 457(b), or SIMPLE IRA plans in administering such matching contributions.

Section 110 of the SECURE 2.0 Act of 2022 allows plan sponsors to provide matching contributions based on student loan payments, rather than based only on salary deferrals, in plan years beginning after Dec. 31, 2023.

Notice 2024-63 applies for plan years beginning after Dec. 31, 2024.

For a qualified education loan to be treated as incurred by an employee, the employee who makes a payment on the qualified education loan must have a legal obligation to make the payment under the terms of the loan. Under the guidance, a plan may not include provisions that limit QSLP matches to only certain qualified education loans, such as qualified education loans for an employee’s education, for a particular degree program, or attendance at a particular school. In addition, a QSLP match contributed for a plan year may not be based on a qualified education loan payment that was made during a different plan year. A QSLP match feature may be added as a mid-year change to a safe harbor plan.