The Rosenbaum Law Firm P.C. Blog

My least JDSupra.com article can be found here.

Much has been written about IBM’s decision to make their matching contribution annually rather than throughout the year.  While people point this out as some seismic change, this is hardly the same as converting a defined benefit to a cash balance plan.

Clearly for the participant, it’s a lose-lose because as an employee, you would rather have the money now than later. Getting the money later can certainly cut down on a participant’s rate of return because of the postponed date of contribution receipt.

For the employer, it’s a win-win. While giving contributions later allows you to adjust for one lump sum rather than being forced to make a deposit into the plan throughout the year, it’s actually easier on the administration side. I prefer end of year matching contributions because it cuts down on potential plan errors.

The reason that there are many errors when you make the matching contribution throughout the error because participant salary deferrals aren’t fluid. Participants can start, stop, change their rate of deferral, and max out their deferral throughout the year. It’s just natural that the plan sponsor or the third party administrator can make errors in trying to match those changes in deferrals.

So I don’t think the IBM change on how they make the matching contribution isn’t so revolutionary.

My latest newsletter geared towards financial advisors can be found here.

My latest JDSupra.com article can be found here.

The American Society of Pension Professionals & Actuaries (ASPPA) is effectively a trade organization and like any trade organization, they get a lot of complaints about the work they do, some warranted and mostly not.

In a nice and required move, ASPPA contacted the Department of Labor (DOL) and the Internal Revenue Service (IRS) requesting  clarification and transitional relief for multiple employer plans (MEPs) obligated to report under both the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code.

Back in May, the DOL released two Advisory Opinions, which was specific to one MEP and applicable to one MEP. This Advisory Opinion caused a lot of grief with providers who operate them. Count me as one of this grief stricken providers.

MEPs are employee benefit plans adopted by unrelated employers and have been part of the law since the enactment of ERISA and the year of the flood. The Internal Revenue Code considers MEPs to be a qualified plan.

The DOL advisory opinions that have been read to mean that many of the MEPs may not qualify as a single plan under Title I of ERISA. Instead, the employers jointly sponsoring the MEP would be treated as each sponsoring a separate plan and as a result, each would be obligated to file its own individual Form 5500. The problem is that many MEPs have filed a single 5500 for years with no issue ever coming up.

The problem is that there is no further guidance. Not from the DOL, the IRS, ir the Form 5500 instructions. 8 months later, these MEPs are still in limbo with no clear guidance on how they should operate.

Hopefully, the government will get back to ASPPA, as well as all of us in the MEP business. Until that time comes, we’re all still in limbo and my back can’t take much more of playing that.

My latest newsletter can be found here.

At my old law firm (yes, that semi-prestigious law firm in Long Island), we had a law firm administrator.  What he administered, I really had no idea.  I’m still waiting for him to help me with growing my practice after he promised 4 ½ years ago. This fellow was very good at talking about ways to improve the way we did business at the firm, but did very little to actually get it done. While acting as the gateway to the Managing Attorney, he really was just a snitch. Since he had the Managing Attorney’s ear, he was given way too much leeway in monopolizing the time of our marketing department in producing his own articles for distribution. My dispute with that (of course after I left the firm) was that these articles weren’t going to draw a dime for the firm because we were in the practice of law and not law firm management. Of course, I mentioned this waste of resources in a few of my articles and this law firm administrator’s writing has seriously been curtailed.

When it comes to marketing services as a retirement plan provider, your marketing has to have the intent that it will draw a dime. You’re in business and some articles unrelated to your business are of little use and a waste of resources and time.  It shouldn’t be about over commercializing what you do, but an explanation of what you know. Materials that make your audience think and giving them some good sound advice is going to get interest about your firm and the services you offer.  The days of getting your name in the newspaper isn’t going to cut it anymore. Social media is the online dissemination of business ideas that is hugely cost effective and can have wide ranging, positive results.  A recent article I wrote about not using cheap plan providers just got me an invitation to a very nice speaking engagement in the spring.

As long as you know your audience, half the battle is already won. Writing the content that will help spread the word about your firm around is the other half. Just remember that your efforts need to help draw you a dime.

My latest JDSupra.com article can be found here.

I am an attorney, but I don’t play one on TV.

I have been practicing in the ERISA field for over 14 years and that is all I have done since I first started working after getting my tax LLM degree at Boston University.

When people find out that I’m an attorney, they often ask question that have nothing to do with ERISA. While I can probably pass the state bar again if I have to, I have forgotten more about the law outside of tax than I actually remember. So when people ask me for legal advice outside of tax, I refer the matter out.

On the flip side, just because someone is an attorney doesn’t mean they know ERISA or the Internal Revenue Code as it pertains to retirement plans. Yet when my services come up for a business that has general counsel, I often find the reaction that the general counsel feels that my services aren’t required because they claim that most companies their size don’t get sued over their retirement plan.

I get that reaction a lot. Heck I worked at a semi-prestigious law firm with some snooty lawyers who could never turn down a free meal, but turned down opportunities to refer my services to their clients. Let’s not forget how badly their 401(k) plan was run before I reviewed it (no advisor, no education to participants, no review of investment options for 10 years, and no investment policy statement).

An ERISA attorney isn’t the right person to ask about a criminal matter or adoption and a non-ERISA attorney isn’t the best person to ask if the retirement plan that your company has is being run efficiently and what the liability threats.

Just ask former attorney Benjamin Eicholz of Savannah, Georgia who was just sued for the Department of Labor (DOL) for embezzling and transferring retirement plan assets to his firm and relatives. He got 21 months in prison for obstruction of a DOL investigation into his retirement plans.

My latest JDSupra article can be found here.