The Rosenbaum Law Firm P.C. Blog

It was harmless and I still think 15 years later, it was always harmless. Working at that semi-prestigious law firm, I reached out to former clients of mine that I worked with, at a third-party administration (TPA) firm. My old bosses got wind of it and sent a letter through their attorneys to the attorney who headed our New York City office.

I was supposed to go to the New York Comic-Con and attend a special breakfast for customers of Diamond Comics, which I was one of. There was going to be special giveaways. Instead, I had to go to our Garden City office to get yelled at, by the Managing Attorney, Lois. Lois blew what I did out of proportion, and started to namedrop the political children of some of the law firm partners, which included an accidental Governor and a guy who lost re-election by 436 votes with $2 million in the bank. Lois who had an ego of the size of Texas was also pissed that my former employer’s attorneys thought the head of our New York office was the managing attorney.

So when I see employees get canceled by posting antisemitic gibberish on social media, I have no sympathy. Zero. If you want to post freely on social media, start your own business, and you will suffer repercussions for that too.

It’s a fairly simple rule: if a father owns 100% of a business, the son is considered as owning it as well, thanks to the rules of attribution. Yet, people get that wrong. They either get it wrong because they’re ignorant of the rules or they’re withholding information from their plan providers.

Whatever it is, an Internal Revenue Service audit that determines that there is a controlled group or not, a screwed up control group analysis, could force additional contributions to satisfy coverage.

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

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

I believe selling Pooled Employer Plans to those with existing plans, can be tough. Cost savings may be minimal, but I don’t think many plan sponsors may be aware of the reduction in liability by no longer being fiduciaries.

Even if you get through with them on the reduction in liability, I still believe many plan sponsors won’t join, simply because they don’t want to give up control. I say that as a control freak.

I loved Oppenheimer, probably one of my favorite movies of all time. One line I love was: “They won’t fear it until they understand it and they won’t understand it until they’ve used it.” That was J. Robert Oppenheimer saying that the public won’t fear nuclear weapons until it’s used.

It reminds me of plan sponsors. They don’t understand their role as plan fiduciaries, and they won’t fear the liability until it’s threatened. I’m not talking about litigation, but a government audit.

The reason I started on my own 13 years ago was because I bet on myself when that law firm (Meyer Suozzi because that would get them on Google) didn’t, and I was tired of billing by the hour. When you have so much overhead with fancy offices and multiple people in billing, you need to feed that machine and bill, to the point you may overbill.

Before I started on my own and when that firm was still paying me, a buddy of mine, convinced me to speak to another law firm. The partner running the firm told me that if I brought in $400,000 worth of business, I could get a $150,000 salary. I’m no financial genius, but I figured that If I could bring in $400k, I didn’t need them to shrink it down for me to $150,000.

Fancy offices are nice. Nice furniture is great. 4 people in billing makes you look big. But that overhead has a price tag and to be successful at what you do, you probably don’t need that. The less I spend, the more money in my pocket, plus the less I need to bill to stay afloat.

HUB Retirement and Private Wealth today announced the launch of HUB Retirement Select 100+, a pooled employer plan (PEP), targeting employers with 100 employees or more in the U.S.

HUB Retirement Select 100+ PEP will work in partnership with NPPG Plan Professionals, the Pooled Plan Provider, and Transamerica to manage the recordkeeping, with HUB providing retirement advisory services.

Hopefully, HUB covers its bases with any termination clauses in their agreement with NPPG (wink, wink).

Suing companies that have their own proprietary investments in their own 401(k) plan is like shooting fish in a barrel.

Allianz Asset Management of America will pay $7.5 million to settle a class action 401(k) lawsuit filed by current and former employees, according to a U.S. District Court in Southern California.

Participants sued claiming that the company’s 401(k) plan offering of proprietary investments violated ERISA’s rules against self-dealing.

In addition to the payment, Allianz also agreed to hire an independent investment consultant to evaluate and review the plan.

I have been working as an ERISA attorney since 1998. While the laws, regulations, and technology have changed, the government random audit has not. Sure, we can fax and email the agent with information and the audition-site visits are less frequent, but the parameters are the same.

When reviewing a plan for a particular year, the agent will have a checklist of what the need to review. It could be plan loans, compliance testing, and plan documents. The problem is that there are very technology-driven third-party administrators (TPAs) that can’t provide what a government agent could need. Something like an annual valuation report which shows compliance testing and a participant account balance is a report that some of these TPAs have a tough time generating and it doesn’t help when they have plan administrators that don’t understand what an agent wants. Even something like loans, may offer no promissory notes, which provides no security for a default.

Technology makes things easier, but a lot of times it makes things difficult for an audit.