The Rosenbaum Law Firm P.C. Blog

Stable value funds provide great returns, much better than money market accounts. There is a price to be paid for that. Stable value funds are guaranteed investment contracts and any termination may lead to a market value adjustment (MVA).

An MVA is a monetary adjustment, or fee, stated within a stable value fund contract. This fee is paid as the result of the plan sponsor’s withdrawal before the provisions outlined in the contract are met.

Plan participants in the Bed Bath and Beyond’s 401(k) plan learned that, the hard way. The plan’s termination with Empower, set off a MVA, adding more insult to injury to people who lost their jobs. Before you terminate the plan or switch providers, check the stable value adjustment for any MVA.

Stable value funds provide great returns, much better than money market accounts. There is a price to be paid for that. Stable value funds are guaranteed investment contracts and any termination may lead to a market value adjustment (MVA).

An MVA is a monetary adjustment, or fee, stated within a stable value fund contract. This fee is paid as the result of the plan sponsor’s withdrawal before the provisions outlined in the contract are met.

Plan participants in the Bed Bath and Beyond’s 401(k) plan learned that, the hard way. The plan’s termination with Empower, set off a MVA, adding more insult to injury to people who lost their jobs. Before you terminate the plan or switch providers, check the stable value adjustment for any MVA.

When I was a kid or even in college, I’d stop talking to someone if I was mad with them. That was just being passive-aggressive. I’ve grown up a bit and tell people when I’m mad at them. Just did that with a friend of mine who is a valued business partner, and things went OK when the business partner apologized.

Most of the time, it works. Sometimes it just doesn’t. I’ve had friends and plan providers write me off for good, just because they didn’t want to accept responsibility for their mistakes or bad conduct. You can only control yourselves, not others.

If they matter to you, tell them when you’re mad.

If you matter to them, they will accept it and move on.

I have always been saying the most successful Pooled Employer Plans (PEPs) in the beginning, were going to be multiple employer plans (MEPs) that converted.

There are many reasons why a MEP would like to convert to a PEP. The audit savings and the use of a Pooled Plan Provider come to mind. Obviously, eliminating the commonality of MEPs between adopting employers is the number one reason I like PEPs. The problem with the conversion is the devil in the details. Many third-party administrators (TPAs) will also serve as Pooled Plan Provider and will insist they need to be plan sponsors as well. I don’t have to tell you that if a TPA is a plan sponsor, it’s hard to fire them.

The White House Office of Management and Budget received a Department of Labor (DOL) proposed rule that would, once again, amend the definition of fiduciary under ERISA. It’s expected that the rule will expand coverage to more individuals involved in employer-sponsored retirement plans.

It should be fun. Well, maybe for us ERISA attorneys, but how this will end, I have no idea with a Presidential coming up next year.

When I was an associate at that forgotten law firm or when I started my own practice, I did a lot of networking. Met some great people, but more, I met people that were a waste of time for one reason, or another.

There was a time when I agreed to speak at an advisor’s event concerning annuities in 401(k) plans. Despite the newspaper advertisement, 2 people showed up, including an attorney who I thought was a friend of the advisor. The attorney had worked for my first boss, so I thought there was a kinship or connection. In addition, he claimed he knew another attorney mentor of mine. Over time, I discovered this attorney was just a huckster, selling services no one needed, and always trying to drag people into his quick rich, pyramid schemes. At one point, we worked on an article on Roth 401(k) opportunities. This attorney used that article for years and it netted me nothing. It actually cost me $300 when the attorney convinced me to join one of his health alliances to show a potential client that I was committed. Needless to say, I was conned out of $300. Years later, when the attorneys asked me if the article was good law and whether we should continue working on it, I passed.

Whatever your time, time is money and your reputation is important. Whether it’s someone who suggests there is business out there or not, be careful and not let other people trade on your name for personal gain.

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

Check my latest article on JDSupra.com here

When I was an associate at that forgotten law firm or when I started my own practice, I did a lot of networking. Met some great people, but more, I met people that were a waste of time for one reason, or another.

There was a time when I agreed to speak at an advisor’s event concerning annuities in 401(k) plans. Despite the newspaper advertisement, 2 people showed up, including an attorney who I thought was a friend of the advisor. The attorney had worked for my first boss, so I thought there was a kinship or connection. In addition, he claimed he knew another attorney mentor of mine. Over time, I discovered this attorney was just a huckster, selling services no one needed, and always trying to drag people into his quick rich, pyramid schemes. At one point, we worked on an article on Roth 401(k) opportunities. This attorney used that article for years and it netted me nothing. It actually cost me $300 when the attorney convinced me to join one of his health alliances to show a potential client that I was committed. Needless to say, I was conned out of $300. Years later, when the attorneys asked me if the article was good law and whether we should continue working on it, I passed.

Whatever your time, time is money and your reputation is important. Whether it’s someone who suggests there is business out there or not, be careful and not let other people trade on your name for personal gain.

For me, one of the worst things that any business can have is a sense of complacency; I have spent too many years working at places that were just way too complacent in their work, where so much time was devoted to proclaiming how everybody was so wonderful and so great. If I am so complacent in business where I think I’m so wonderful, I’m going to retire or ask someone to put me down like Old Yeller.

I don’t think any retirement plan provider can afford to be complacent. The industry is consistently changing and any change breeds more competition. Unless you’re a payroll provider TPA or one of the large consulting companies like Buck or Towers Watson, you can’t afford to hire a top-notch marketing firm. If you’re like me, you weren’t taught marketing in school. So when I say that TPAs as a whole have lousy marketing, it’s not an insult because most professional firms have lousy marketing because of a lack of resources. Heck, most law firms have lousy marketing and there are quite a few TPAs who have excellent marketing. As a whole, it needs improvement.

So when I say that TPAs as a whole have lousy marketing, I see it less as an insult and more of a challenge for TPAs to get better at communicating with plan sponsor clients and potential clients. Just saying that a TPA can’t do much because it’s a competitive business and this is just how the business they chose to go into operates is just a lazy man’s argument.

I decided long ago that I wanted to build a national ERISA practice, to work with plan sponsors, advisors, and TPAs around the country at a flat fee. I was surrounded by an attorney leadership who thought that my way was the wrong way and that is not how a law firm operates and markets itself. Of course, I went on my own and proved them wrong. I could have sat back and just written it off like Hyman Roth did in Godfather Part II by saying that this was the business I chose. If I did that, I’d hate to think where I would be now.

TPAs can just sit back and be bitter about how the TPA business has turned, but bitterness and complacency don’t get clients. Thinking outside the box, being bold, and being creative goes a long way toward getting clients. That’s why I thoroughly enjoyed speaking at TPA panels because TPAs give each other good bits of information to get more competitive. Sitting back and feeling sorry for yourself is a lot easier than doing something.