The Rosenbaum Law Firm P.C. Blog

My latest newsletter can be found here.

Years ago, as a naïve associate at a semi-prestigious law firm (sorry Lois), I got the short end of the stick to attend a quarterly Taft-Hartley meeting in Staten Island for a multi-employer plan. If you ever have to drive from Long Island to Staten Island, you know what a short stick it is.

The head of the union wanted recommendations for an actuary for a part of their request for proposal (RFP) process. I thought of a few actuaries I could recommend, based on my 9 ½ years working for third-party administrators. I mentioned it to co-counsel and was pulled aside, he told me that the whole RFP process was a sham because the Taft-Hartley plan had absolutely no interest in hiring another actuary. They were happy with who they had.

The RFP process or the less structured process for reviewing plan provider including getting competing proposals from other providers is all about a process and a process that is an actual sham is not a real process. The current provider should partake in the RFP process or at the very least, the plan sponsor should treat all providers as potential providers instead of just deciding that they will keep the status quo because the status quo may not be sufficient.

When it comes to fiduciary responsibility that we preach as a plan provider, we must keep in mind that everything must be above board. Otherwise, it’s not really a process.

I live in an unincorporated village on Long Island and I’m always amused by the people who want to lead the community without the best of good intentions. There are so many who do charity fundraising for the community and there are those who only do for the sake of doing business for themselves. They will get involved as long there is something that the community can do for them. This isn’t unique to my village; I have seen this behavior with my former synagogue. there are people who come with the best of intentions and there are those who do not.

There is nothing wrong with getting involved in charitable endeavors. I think there is something wrong if you do to get direct business. Sure, charitable work is a great thing to highlight your services because it gives potential clients and spheres of influence that there is something more to you than making a buck.

The issue for me is whether you’re in it for the right reasons and sees that the organization is there as a platform to sell directly to those who are also involved in that charitable organization or to that organization itself. That’s what I have a problem with.

As everyone knows, I’m not a big fan of payroll providers being third-party administrators, at least the big two. However, there may be opportunities for you to augment your services and make a couple of extra bucks.

A perfect example is when I went to Shea Stadium, you had a very limited menu and it was all fast food. When the Mets opened up Citi Field as a replacement, they realized they could augment their bottom line by offering premium food at a premium price. I tell my son all the time about the limited choices at Shea when he is eating Shake Shack. You need to figure out a way to generate another revenue stream by focusing on something that is ancillary to your business, maybe it’s offering other products and services that connect with your business.

You know better about your business that I do, so just focus on what you can do and what you can add tha5 is close to what you’re doing.

My latest article for JDSupra.com can be found here.

I’m sure that everyone knows that Secretary of Labor Alexander Acosta resigned over the controversy of a plea deal he negotiated as a U.S. Attorney in Florida with Jeffrey Epstein back in 2008.

I’m sure you’ve also seen many articles asking what impact his resignation will impact the Department of Labor (DOL) in the promulgation of a new fiduciary rule and other DOL initiatives. My thoughts are the resignation will do very little. The DOL may change administration to administration, but very little from secretary to secretary. It’s not like Acosta was drafting the new fiduciary rule himself. You have long term DOL officials with the Employee Benefit Security Administration who do the rule drafting, so I don’t see how Acosta resigning will impact the release of another proposed fiduciary rule. Just my two cents, based on ERISA and political experience.

When a participant of yours leaves or is let go, I think one of the most important things you can do is make sure they roll out their assets from your retirement plan.

Sure it means that you might have fewer plan assets in your plan, but I think it’s important to roll out their assets because you don’t need the headache of dealing with former employees. You have notice requirements you still have to deal with participants that are former employees. Plus don’t forget that former employees are bigger pains to deal with than current employees. So I recommend making sure they roll out their money. If they are under your minimum threshold, then cash them out if they don’t. If they are above the minimum, do your best and try to have them move the money out.

You’ll be glad for many reasons that you did.

My latest article for JDSupra.com can be found here.

When a participant of yours leaves or is let go, I think one of the most important things you can do is make sure they roll out their assets from your retirement plan.

Sure it means that you might have fewer plan assets in your plan, but I think it’s important to roll out their assets because you don’t need the headache of dealing with former employees. You have notice requirements you still have to deal with participants that are former employees. Plus don’t forget that former employees are bigger pains to deal with than current employees. So I recommend making sure they roll out their money. If they are under your minimum threshold, then cash them out if they don’t. If they are above the minimum, do your best and try to have them move the money out.

You’ll be glad for many reasons that you did.

Your plan’s eligibility provision is a big thing because it serves as a gatekeeper for which employees you want to cover based on your demographics, it’s like a velvet rope at the local club.

The problem is that sometimes your provision isn’t followed correctly or it wasn’t drafted correctly. Either way, you have a huge compliance headache. You might owe some contributions or you might have a compliance testing problem as well. Regardless, make sure that the eligibility provision meets your needs.