The Rosenbaum Law Firm P.C. Blog

My newsletter geared towards retirement plan professionals can be found here.

The best selling beer in the United States is Bud Light. Does that make it the best? If given the choice of drinking Bud Light and not drinking beer, I’ll pick not drinking beer. There are probably a thousand beers better than Bud Light, but for many reasons, it’s the most popular. It’s probably the most popular because of its lower cost and Anheuser-Busch InBev’s marketing dollars.

So when one of those large payroll provider TPAs tell you how many clients they have, take it with a grain of salt. While they administer the most amount of plans, they also don’t have the most assets under administration which means that they administer more, smaller plans.

Hiring TPA is all about fit, you need one that fits your needs and that’s going to do a great job of administering your plan with limited issues. Picking a TPA just because they’re larger is just an awful mistake. If I were you, I’d pick the Sam Adams of TPAs, but that’s just my taste.

Maybe I’m like Larry David, but I have a lot of pet peeves. I hate when people whistle or sing in public. I hate when people talk on their cell phone in line. I also don’t deal well with working with, working for, and being related to narcissists.

When it comes to business, I hate when a financial advisor I barely know is trying to sell me on what they’re doing and alluding that there is some referral fee out there for me. When I hear the pitch that they have a program where an attorney or accountant can get a referral fee for referring plan sponsor clients to said advisor, I cringe.

I get clients primarily from financial advisors and third party administrators (TPAs); I also get a bunch of clients directly from plan sponsors. I’ve always maintained a law practice of being provider-neutral and I find it unethical to collect a fee other than a legal fee. When I worked for a number of TPAs, there were some well-known ERISA attorneys who did collect a fee from financial advisors for referrals. Whether this arrangement was disclosed, I have no idea.

The point here is that any referral I make is not going to be attached with money in the palm of my hand. Getting paid for my legal services is more than enough.

President Trump signed an executive order last week in Charlotte which directs the Department of Labor and the Department of Treasury to promulgate regulations that will allow association plans, which are probably a vague notation to Open Multiple Employer Plans (MEPs) which have not covered from a Department of Labor advisory opinion in May 2012 that said that a MEP with no commonality between adopting employers was not a single plan for 5500 purposes.

Before you start uncorking the champagne bottles, the regulations will take time to come and get implemented. In addition, the Secretary of Labor suggested that the Chamber of Commerce could be one of these association plan sponsors, which might restrict from plan providers from sponsoring their own Open MEPs. So, we’ll wait and see what the government comes up with and whether Open MEPs will gain back its footing.

In addition, President Trump asked the Treasury Department to look at required minimum distributions and determine whether the mortality factors should be updated so that individuals can take less money out as part of a required minimum distribution after attaining age 70 ½.

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

The Internal Revenue Service (IRS) issued a private letter ruling which allowed an unnamed employer (some say it’s pharmaceutical giant Abbott) to make 401(k) contributions to participants who are repaying their student loans.

In a nutshell, the IRS approved the 401(k) plan in question to allow plan participants to choose whether they’d prefer a 5% contribution from the employer to be in the form of a 401(k) match or a student loan repayment. Participants would receive the contribution regardless of whether or not they are contributing to the retirement plan.

Before you start promoting the idea of this contribution option, remember it’s part of a private letter ruling specific to the issue of the employer and plan in question. I wouldn’t suggest anyone adopt such an option without further guidance or seeking a private letter ruling of your own.

Will this option become popular if codified into law? Perhaps, perhaps not. However, I like the idea of it because I like choices when it comes to 401(k) plans and any mechanism that can help plan participants get their financial future into place is alright by me.

Don’t know when, don’t know where: but there will be a 401(k) podcast emanating from this site and ITunes in the near future.Don’t know when, don’t know where: but there will be a 401(k) podcast emanating from this site and ITunes in the near future.

If anyone is interested in being a guest or being an advertiser, please feel free to reach out to me.

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

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

With apologies to Tod Higgins (played by Keanu Reeves) in “Parenthood”, you need a license to practice law to be an ERISA attorney, you need to be a CPA to be a retirement plan auditor, you need a securities license to be a financial advisor, but any shmuck can put out a shingle and call themselves a third party administrator (TPA).

There is no required training or licensing for someone to operate a TPA business and I find that scary for a position that requires such knowledge and expertise to do the job of plan administration and recordkeeping properly.

So when looking for a TPA, look for any ASPPA or CEFEX designation or other accreditations such as an enrolled actuary among the professionals you hire as your TPA.