The Rosenbaum Law Firm P.C. Blog

While the tax reform talks didn’t do much to negatively impact 401(k) plans. Mark my words: the elimination of certain deductions will negatively impact the amount of deferrals that people will be able to put in their 401(k) plan.

Limiting the amount of deductions for mortgage and state and local taxation will hit middle and upper-middle class taxpayers in the pocketbook, which give them less room to make salary deferrals. While people will point that most Americans will receive tax cuts, a lot of people in some blue states won’t be getting any type of cut especially if they own an expensive piece of real estate in a big city or in the suburbs.

While the industry activated strong support against any tax reform that will negatively impact how much could defer, I think there are going to be quite a few taxpayers out there that will be cutting back on what they’ll defer.

When I was the Vice President of a synagogue, I ran an event a month to fundraise and/or to bring members together.

My crowning achievement was having a standup comedy event hosted by Sal The Stockbroker Governale from The Howard Stern Show.  It really was an out of the box, off the wall idea. I wanted an event that could draw in an audience from the outside community, so we no longer had to depend on the same 30+ people who attended every one of our events. There are so many times you can ask a member to contribute, so this event with Sal has 200 guests in attendance including Larry Caputo. Instead of the typical holiday celebration or Friday night meal, the synagogue had a unique event that brought in a lot of money from outside its community.

I always sometimes that when it comes to marketing, think of things that your competitors aren’t doing. Recently, a local third party administration (TPA) firm by the name of Associated Pension invited me to attend a screening of The Last Jedi. Of course, I had a ticket already at another theater, but this was a unique event that they used to rent out an entire theater so many of their contacts in the industry could attend. I thought it was something unique and memorable and I’m sure a free movie ticket to the most anticipated movie of the last 2 years is better advertising for a TPA that just a nice brochure.

See what everyone else is doing and offer something unique, you’ll be surprised at how much interest you can create.

My latest newsletter for retirement plan providers can be found here.

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

My latest newsletter can be found here.

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

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

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

I worked at a law firm and I wanted to build a National ERISA practice. Since the partners there weren’t interested in sharing clients, I tried my best to get some. I drafted an email to an advisor I knew from the third party administrator (TPA) I left several years earlier. To say something about my work ethic, they eventually needed to hire 3 people to replace me, so their legal fees went up. I mentioned that my fees were much more competitive than the TPA’s legal fees and I could offer an attorney-client relationship. The TPA found out about my email and contacted the managing Attorney who didn’t like me from Day One. The tongue lashing is memorialized in my Kindle Book about 20 of you actually bought, but let’s just say that everyone takes a beating someday (obligatory GoodFellas reference).

As far as employees are concerned, you should be concerned with their social media posts as long as they identify themselves as your employee. In my area, I’ve seen school district employee say things o Facebook that no school district employees should be saying as school district employees. There is nothing wrong with employees expressing themselves as long as they’re not expressing themselves while identifying themselves as your employee because you may not want to be linked to their views.

You have enough things on your plate without worrying what an employee may post as your employees. You don’t want to be saddled with views and actions that may not reflect well on your organization. This isn’t a matter of free speech (the First Amendment is protection from government interference), it’s a matter of you having fewer headaches.

Forfeitures that occur when people terminate service from retirement plans is usually a problem when the plan sponsor and their providers forget about them. Whether forfeitures are used to pay expenses, reduce employer contributions or is reallocated is specified in the plan document. The problem is when they just left there to collect dust.

Forfeitures should be allocated in the year that they occur. If they don’t, it might be an issue for the Internal Revenue Service (IRS) or the Department of Labor (if participants are deprived of an employer contribution from these forfeitures).

Another problem with forfeitures is that IRS guidance is that forfeitures can’t be used to offset a safe harbor contribution because the reasoning is that a safe harbor contribution must be fully vested when made and that can’t happen with a forfeiture. I don’t necessarily agree with that, but I’m not going to pick a fight with the IRS. I just hope they would change their thinking.

There is no reason that an employer should have hundreds of thousands of dollars growing each year in forfeitures, they should be allocated annually. Otherwise, the plan may run into an issue and it’s silly to have compliance issues with something as silly as holding onto forfeitures.

So if you have a client with loads of forfeitures, tell them to get rid of them.