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Bob Toth has more than 35 years of experience in employee benefits law. His practice focuses on the design, administration and distribution of financial products and services for retirement plans.

None of the MEPS, PEPS, GoPs or CITs are silver bullets in and of themselves; but instead they are all tools to an end with substantially different features. But they all do commonly use the aggregated power of a collection of plans of unrelated employers to provide (each in different measure) advantageous investment pricing and selection; professional fiduciary services; and reduced compliance costs to a sorely underserved market.  Benefit professionals have been educating themselves to familiarizing themselves with each of these arrangements, but this is not particularly a simple task. This is reflective of the fact that successful operation of MEPS, PEPs and GoPs (in particular) are  heavily dependent on technology which is not easy to either build or maintain. They actually require a high level of sophistication and a substantial investment in technology to pull effectively accomplish.  This “meptech” is at the heart of it all,  used for the unique sort of data collection, manipulation, consolidation and control which is fundamental to success with these platforms. There a couple of  “meptech” developments worth noting. I am hopeful to occasionally post developments here from time to time as they arise.
Continue Reading “Plan Aggregation” Update: Find Pooled Plan Providers In E-Fast2; SECURE Act Section 202’s “Group of Plans” Comes to the Forefront

The federal government’s response to widespread personal tragedy has nearly always involved adjusting the rules to retirement plans. So many of these rule changes come at benefit professionals with great speed and little guidance, yet we need to make them work. This is because the work we do is critically important to people’s lives, though we rarely see it because of the focus on making the damnable rule changes somehow fit into our already overburdened processes and systems.  This impact also shows up when the tragedy is personal and not just societal.  So I invite you to reflect,  during this holiday season of celebration, on the actual, real, individual impact  of what we do. Beyond the administrators, the lawyers, the actuaries, the accountants, the writers, and the consultants is buried very real meaning.
Continue Reading The Hidden Importance of Plan Administration in Time of Tragedy

PEPs become a real thing as of the first of the year, though there is still one heckuva paucity of guidance related to them. Many of you may now be pressed as to the question of whether or not you or your clients should choose this road.   I had published a version of the following back in January, but it seems timely to provide it again (in slightly different form), as a hopefully useful tool when you try to weed through your own assessment of these arrangements. It is a Glossary we had put together, which is more topical now as ever.  Keep this as a (hopefully) handy guide when you find yourself caught in the middle of a conversation about “PooledEmployer Plans” and need to quickly summarize the different MEP types:
Continue Reading Pooled Employer Plans Are Nearly Upon Us: A Review of the Glossary May Help With Your Assessment

The DOL’s new ESG rules may have a curious impact on some church related organizations which utilize faith based standards in their retirement plan investments. Their ability to continue do may now turn on the manner in which they handle their status as a “church plan.” It arises because the ESG rules will NOT apply

We spend a lot of our time focusing on ERISA’s “Prohibited Transaction” rules, which extensively cover the manner in which compensation is paid under retirement plans, and how it is disclosed. Lurking darkly in the background behind all of our  discussions of fee disclosure and how the prohibited transaction rules apply under 408(b)(2), however, is something most of us in the benefits world typically pay little attention to: the U.S. Criminal Code and 18 USC 1954.
Continue Reading Remember, Some Sorts of Compensation Is Flat Out Illegal, Not Just “Prohibited”

The resource guide looks to be a very useful tool. It not only links to the statute and each of the regs, it also links to the IRS Manual sections on 457(b) plans. It does have its limitations (such as providing no guidance on how one corrects failures in tax-exempt’s 457(b)plan), but it should be a permanent part of the practitioner’s research tool list.
Continue Reading The IRS’s New 457(b) Resource Guides on Non-Compliance

A common misunderstanding between 408(b)(2) and 404(a)(5) is the nature of the requirements: 408(b)(2) requires the service provider’s contract with the plan’s fiduciary contain certain, specific terms. It does NOT require that those fees be disclosed to participants, nor does it require annual disclosure. It is simply a business matter between the fiduciary and the service provider. The only time a follow-up “disclosure” is ever required is if there is a material change in the contract’s terms (including the service fee), and then that disclosure is only required to be made to the plan fiduciary.
Continue Reading The Use, and Impact, of 408(b)(2) and 404(a)-5 Are Often Confused

With few notable exceptions, the statutory and regulatory references we need in the administration of plans are at our fingertips from a number of easily accessible internet resources, a great deal of them actually available for free. One of the most annoying of those “notable exceptions” is found under Code Section 411(e) (6) of the Code, the vesting standards which apply to governmental and church 401(a) plans. Section 411(e)(2) states, in pertinent part, that these plans “shall be treated as meeting the requirements of this section, for purposes of section 401(a), if such plan meets the vesting requirements resulting from the application of sections 401(a)(4) and 401(a)(7) as in effect on September 1, 1974.” You can find those here.


Continue Reading The Hard-To-Find “Pre-ERISA Vesting Rules” for Church and Governmental Plans

There is no “vesting on partial termination” for 403(b) plans, and no need to track the “20%” rule for vesting on partial terminations for a 403(b) plan. That rule simply does not apply. This his true for both ERISA and non-ERISA 403(b) plans.
As a practice note, if you have mistakenly applied that “partial termination” vesting rule to a 403(b) plan, you may have an operational error.
Continue Reading Are There “Partial Terminations” of 403(b) Plans ?

The new PEP rules do not add any new services to the marketplace. Rather, PEPs merely reorganize existing services to be provided in a different format, with the one exception is that it now permits unrelated employers to be able to file a consolidated Form 5500. The Department’s issuance of guidance as to the allocation of these different authorities (consistent with in ERISA Section 3(44)(C) which requires the Department to ‘‘(i) to identify the administrative duties and other actions required to be performed by a pooled plan provider…”) is a required condition precedent to the determination of whether any prohibited transaction exemptive relief is necessary in the operation of a PEP.
Continue Reading PEP Comment to DOL Outlines the Structure of PEPs