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These Reasons Alone Aren't Reasons To Hire A Plan Provider For Your 401(k) Plan.
There ness to be a lot of good reason to hire a provider.
 When picking plan providers, you must have a rational process in place to that. There must be a variety of reasons why you should select them in your role as a plan sponsor. The biggest mistake you can make in selecting a plan provider is by focusing on just one factor to the detriment of other factors that you should consider. Each supporting factor for a particular plan provider can be explained away because one factor just isn't enough to select a plan provider.
For the article, click here.
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The Real Fiduciary Threat For Smaller 401(k) Plans Is A Government Audit.
This is the real threat.
 As a 401(k) plan sponsor, I'm sure you've been spoken to by a plan provider who wants you as a client and they're talking about you potential liability as a plan fiduciary. They're probably also talking about the threat of litigation and this is where I think most retire-ment plan providers miss the point. Unless your plan has $50 million or more in assets, the likelihood of being sued by a current or former participant is slim to none. There have been probably more men who landed on the moon than small or medium- sized 401(k) plan who have been sued in a class action claim. Good fiduciary practices are necessary, but the real fear that they should be talking about and that you're more than likely ill-prepared for is an Internal Revenue Service (IRS) or Department of Labor (DOL) audit. This article is all about the risk of a government audit and what trouble it may get you into.
To read the article, please click here.
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401(k) Plan Sponsors: Let Your Providers Do Their Job.
Let them do their job.
 Some of my worst clients are lawyers and I'm not afraid to admit that. The reason they are some of my worst clients is that since they know the law, they think they know ERISA and it's a federal law like no other. Lawyers sometimes get in the way of me doing my job. As a 401(k) plan sponsor, you hire plan providers to help you and the worst thing you can do is get in the way. This article is about how you should let your retirement plan providers do their job.
To read this article, please click here.
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If you're late with deferrals, it will probably happen again.
Never a one time thing.
 People who are late are usually late most of the time. I'm usually always early for a meeting unless I severely misjudged traffic. I have a business partner who is almost always late, very rarely is he on time.
So I think that if you're late in depositing salary deferrals once, you're liable to do it again and again. It's just a nature of life. Whether you are late once or multiple times, my rule of thumb is that you have to put a procedure in place to deal with late deposit of salary deferrals. Otherwise, you will likely have an epidemic of late deferrals, which won't make the Department of Labor happy.
So consider that upon the first late deferral, you might do it again. That's why you should a procedure in place to avoid further later deposits. If you implement a procedure and follow it, you're likely not going to deposit deferrals late again.
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Sometimes, the litigators want a piece of you
.
Some times, it's all about the bills.
 Many years ago, I represented a defined benefit plan sponsor being investigated by the Department of Labor (DOL). The DOL thought the plan sponsor had embezzled money from the plan because the deceased actuary never provided any valuation reports and he gave the advice to the owner of the company that it was no problem to write a check from the defined benefit plan to prop up another related company because the owners had the bulk of the benefit.
Based on the evidence (or lack thereof), I thought the plan sponsor should come to a deal with the DOL. I'm not a litigator and I wanted to recommend litigators I knew. However, the owner of the company had a relationship with a litigator that had no ERISA experience. They wanted to fight the DOL and I thought that was the wrong tactic. Let's just say that I was pushed aside and 3 years later, the owner had to shell out $4 million to the DOL and agree that an independent fiduciary be appointed. The only one who made out on the deal besides the DOL was the litigators, who know how much the plan sponsor had to fork over in needless litigation bills.
Always be wary when litigators want to litigate with the government, resistance might be futile.
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Check out That 401(k) Podcast.
The podcast you should listen to if you have the time.
 Please check out That 401(k) Podcast, where I co-host with Dan Venturi of Bright Worxx. We tackle important 401(k) subjects for both plan sponsors and plan providers. In addition, we talk about all the events I'm hosting. as well as important cultural allusions.
Find it
here and on Apple Podcasts
here.
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The Rosenbaum Law Firm Review, October 2019
734 Franklin Avenue, Suite 302
Garden City, New York 11530 Phone 516-594-1557 Fax 516-368-3780
Attorney Advertising. Prior results do not guarantee similar results.
Copyright 2019, The Rosenbaum Law Firm P.C. All rights reserved.
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