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We regularly contribute Benefits Law and Retirement Plan Articles to the Journal of Pension Benefits (JPB) and other publications. Ilene serves as co-Editor-in-Chief of the JPB, a quarterly journal for pension professionals.

2012

ONLY TURKEYS FORGET THEIR DECEMBER 1 NOTICE DEADLINES

By Ilene H. Ferenczy

Certain notices have to be provided to participants of calendar year plans on or before December 1. We want to make sure that you take care of those even though you may have visions of turkey and stuffing dancing in your head.

If more than one of the below notices applies to your plan, feel free to combine the notices into one document. Remember: All of these need to be provided by December 1.

> View the entire article in PDF format.

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ERISA 404A-5 REGULATION: ARE YOU ON FIRST?

By Ilene H. Ferenczy
As the compliance deadline with Department of Labor Regulation Section 2550.404a-5 is now upon us, it's time to get really serious about how our clients are going to meet these participant-level disclosure rules. We have seen among practitioners a considerable amount of confusion and "deer-in-the-headlights" lack of preparation for this deadline. This article will go over (in summary fashion) the rules for compliance, as well as actions benefits practitioners should take, even if they are not responsible for providing these disclosures.

> View the entire article in PDF format.

ERISA SECTION 408(B)(2) FOR PLAN SERVICE PROVIDERS: COULD THIS BE A GLASS HALF FULL KIND OF THING?

By Ilene Ferenczy and James C. Paul
If you are in the benefits industry (and perhaps even if you are not) and have not been living in a cave for the past several years, you know that the deadline for a service provider to disclose his or her compensation from working with a retirement plan is July 1 of this year. This has been something of a combination of Chicken Little (''The sky is falling!''), the Emperor's New Clothes (''There's nothing there! My broker is stripped naked!'') and business optimism (''Let's make lemonade out of lemons, shall we?''). Nonetheless, as we come to the waning months of the ''catch-up'' part of this project, if we remove the hyperbole, we may just find that this is a better way for us all to do business.

> View the entire article in PDF format.

THE RIGHT WAY TO SPONSOR A MEP

By Ilene Ferenczy
When the idea of doing an Open Multiple Employer Plan (MEP) first became popular, a few of my TPA clients approached me about it. I thought it was a great idea from their perspective. It's a way to improve compliance on the things that normal TPAs leave to their uninformed clients, and also helps create a tighter relationship between the clients' plans and the TPA than a normal engagement. My clients asked me to research MEPs to look for any problems of which they were not aware. At that point, I came across the issue of the DOL's historic rulings on multiple employer plans (i.e., that many do not constitute a single plan, but a grouping of individual plans), asked a DOL representative about Open MEPs in a meeting between the DOL and ASPPA's Government Affairs Committee, and the rest is – at least in the small plan community – something like history.

> View the entire article in PDF format.

DOL REVISES INTERIM POLICY ON ELECTRONIC DISCLOSURES

By James C. Paul
In October 2010, the Department of Labor (DOL) published final regulations requiring fiduciaries to disclose certain plan-related and investment-related information to participants and beneficiaries in participant-directed individual account plans (the "Participant Disclosure Rules") [29 CFR §2550.404a-5]. In response, ASPPA and others in the pension industry requested that the DOL update its rules governing the use of electronic media to make it easier for fiduciaries, plan sponsors, and vendors to comply with the new Participant Disclosure Rules.

> View the entire article in PDF format.

2010

UNCASHED CHECKS: THE BILLION DOLLAR QUESTION?

By Ilene Ferenczy and Peter E. Preovolos
Ilene and Peter tackle a vexing new problem for plan administrators–unclaimed benefits. Neither ERISA law nor DOL regulations adequately address this issue, so the burden is on the fiduciary to determine the appropriate course of action.
> View the entire article in PDF format.

2009

OY, ANOTHER CONVERSION? CAN IT BE PAINLESS?

By Regina L. Farmer
The plan conversion (and deconversion) process depends on assembling the right team for the job, devising a course of action, and digging into the details of the plan. Presented in this article are a few helpful guidelines for plan sponsors facing the challenges of executing a successful conversion.
> View the entire article in PDF format.

2008

THE QUANTUM LEAP: CHANGING THE 401(k) PLAN INVESTMENT LANDSCAPE

By Ilene Ferenczy
What is the best way to run a retirement program? Employers want employees to properly plan for their retirement futures, but overloading employees with investment information may not be the trick. It’s time to stop treating plan participants like the 401(k) gurus they will never be. QDIAs may be the smartest first step for many participants.
> View the entire article in PDF format

2007

Automatic Enrollment: What Was Old Is New Again… with a Twist?

By Ilene Ferenczy and Regina Farmer
Abstract: Like the proverbial kid in the candy store, automatic enrollment looks good, it smells good, it sounds good, we want it. As a smart mentor once told me, however, "Let's slow down and think about this for a minute."
> View the entire article in PDF format

2006

Roth 401(k) Plans… and We're Rounding Third Base

By Ilene Ferenczy
Abstract: This is a sequel to last issue's column on Roth 401(k) plans [" Roth 401(k) Features: Treasury Takes Us All the Way to…Um…Second Base," 13 J. of Pension Benefits 3], which discussed the finalized regulations in relation to the creation of a designated Roth provision in a 401(k) plan. The IRS also issued proposed regulations in January of this year, providing additional guidance on the distribution and taxation rules for Roth accounts. These proposed regulations are discussed below.
> View the entire article in PDF format

Roth 401(k) Features. Treasury Takes Us All the Way to… Um… Second Base

By Ilene Ferenczy
Abstract: Now that Treasury has issued final regulations regarding adding Roth features to our 401(k) plans, we have the answers to some of our questions on this new and anxiously awaited plan provision.
> View the entire article in PDF format

2005

Unraveling the Tangled Web of Compensation for 401(k) Plans

By Ilene Ferenczy
Abstract: This column is not meant to be the latest in a long line of writings differentiating the fine line between the various definitions of Section 415 compensation and the alternate compensation definitions. This column concentrates specifically on the various compensation rules for 401(k) plans, and identifies the rules that apply to particular circumstances
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Bones of Contention: Controversial Provisions of the Final 401(k) Regulations

By Ilene Ferenczy
Abstract: Final regulations issued by the Treasury in December 2004 to replace prior 401(k) and Section 401(m) guidance contain some unanswered questions and reinterpretations of the law that practitioners will find unsettling. Issues covered here include amendment deadlines, contribution timing, gap period income, the use of QNECs and QMACs in ADP and ACP testing, hardship withdrawals, and safe harbor matching contributions and notices.
> View the entire article in PDF format

2004

The Enron Litigation: Lots of Noise, Only a Little Substance… So Far

By Ilene Ferenczy and David S. Thomas
Abstract: As practitioners, we must spend more time advising our corporate clients of the duties that the board of directors, the administrative committees, and the trustees assume when they sign on the dotted line, so that they approach their jobs with more solemnity than they may have in the past. It is incumbent upon those hearing this advice to listen and to act on it.
> View the entire article in PDF format.

Sidestepping the Pitfalls of Plan Administration

By Ilene Ferenczy and Frances-Ann Moran
Abstract: It is impossible to draw a complete roadmap to what it takes for a plan and a TPA firm to run perfectly. However, acknowledging and addressing the pitfalls in this article can give both the plan sponsor and the service provider an edge on having a good result.
> View the entire article in PDF format.

Be Careful What You Wish For: The Proposed 401(k) Regulations Are Here.

By Ilene Ferenczy and Janice M. Wegesin
Abstract: It is good to have additional guidance about 401(k) plans. Nonetheless, much of the proposed regulations appear likely to make administering these plans more complicated, and plan administrators are left with no resolution to commonly asked questions. It will be interesting to see how much credence the government gives to practitioner written and oral comments about these rules.
> View the entire article in PDF format.

Privatizing Social Security: The Answer to Retirement Woes or Enron to the Nth Power?

By Ilene Ferenczy
Abstract: Social Security was enacted to provide working people with a safety net when they retire. The current call to privatize Social Security sounds promising, but does it really deliver?
> View the entire article in PDF format.

Paying the Administrative Fees of a Qualified Plan

By Ilene Ferenczy
Abstract: In today's economy, plan sponsors are less likely to pay all costs of plan administration, leaving the plans themselves to pick up a greater share of such expenses. Fiduciaries now have a greater duty to determine the expenses properly paid out of plan assets.
> View the entire article in PDF format.

Revenue Ruling 2004-11: The IRS Starts Climbing the M&A Ladder

By Ilene Ferenczy
Abstract: It is encouraging to see the IRS and the Treasury attempting to tackle some of the complex issues raised by company acquisitions and dispositions. Practitioners have had to deal with these questions for years in an uncertain environment. Probably the most positive development is that the government is seeking practitioner input on these issues. Nonetheless, we recognize that the Section 410(b) transition period rules are just the tip of the M&A iceberg.
> View the entire article in PDF format.

2003

Congress Avenges Corporate Fraud: The Sarbanes of a Benefit Professional's Existence

By Ilene Ferenczy and Frances-Ann Moran
Abstract: Intended, at least in part, to protect 401(k) plan accounts from the effects of corporate fraud, the Sarbanes-Oxley Act has missed its mark. Many of its benefits-related provisions merely impose burdensome administrative requirements on plans without offering plan participants any real protection.
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Murder on the M&A Express: How Benefits Killed the Deal

By Ilene Ferenczy
Abstract: "How are we doing resolving the problems with the acquisition"? I asked. Bang! And then a shot rang out. …"The deal is dead," my client told me. "We decided not to pursue it." This was the first time that I had ever witnessed a deal being killed by benefits problems. I'd heard stories. It wasn't pretty.
> View the entire article in PDF format

Would Someone Decide What to Do with This Stuff, Already?

By Ilene Ferenczy
Abstract: Clear guidance is needed, or at least acknowledgement that plan sponsors have the flexibility, to safely select among alternatives.
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Creatively Working With Bundled Products

By Ilene Ferenczy and Frances-Ann Moran
Abstract: Since 401(k) plans have become popular, it is increasingly common for retirement plan sponsors to seek out a single company that can provide them with the full spectrum of plan administration and compliance services. In response, financial institutions have positioned themselves to fill that role by providing bundled service products. However, in our experience, it is common for a gap to arise between the plan sponsor's expectations and the services the bundled providers can give. This gap has led, for several of our clients, to an unhappy situation in which the plan has fallen out of compliance with the law, and each party is pointing fingers at all the other parties in the process.
> View the entire article in PDF format

2002

Everything Old Is New Again: Changing Employee Status Issues in an Acquisition

By Ilene Ferenczy
Abstract: In corporate transactions, who is a new employee and who is an old one? This article answers that question for asset acquisitions and for stock acquisitions—as well as current guidance allows—and then explains who ought to be a new employee and who ought to be an old employee, and why.
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What's New in M&A: Scrambled EGTRRA with a Side of Enron

By Ilene Ferenczy
Abstract: EGTRRA's repeal of the same-desk rule and addition of catch-up contributions created problems unique to 401(k) plans in an M&A context—problems that Treasury has addressed in an IRS notice and proposed regulations. Meanwhile, the lawsuit by participants in Enron's 401(k) plan is serving as a reminder to all plan sponsors and administrators of the necessity to scrutinize all decisions relating to 401(k) plans—particularly in an M&A situation, when employees are likely to be hypersensitive to anything appearing to be a fiduciary breach.
> View the entire article in PDF format

2001

Welcome to the Family… Assimilating Benefits for New Employees in an Asset Acquisition

By Ilene Ferenczy
Abstract: In this time of nonstop mergers, acquisitions, and buyouts, frequently one of the "forgotten sons" is the employee benefits plans. Rife with pitfalls, thorny issues, and complications, these programs are often left unattended until the transaction is complete. With the short time frames required by law for transitioning employees and their benefits plans, it pays to plan ahead.
> View the entire article in PDF format

Buying the Company from the Employees: Stock Acquisitions from an ESOP

By Ilene Ferenczy
Abstract: When an ESOP owns the selling company, benefits issues become paramount. This column explores the key issues that arise in such a transaction, including voting rights and conflicts of interest.
> View the entire article in PDF format

2000

MUT Made Easy: Yes, Really!

By Ilene Ferenczy, Cynthia A. Grozkiewics, and Richard A. Grozkiewics
Abstract: This article is the collaboration of two actuaries and an attorney. Needless to say, we needed to hold ourselves back from using a lot of calculus and "herewith." For those who have a low tolerance of either, let us come to a point: the next several pages will provide you with a one-step formula to calculate the maximum multiple use test (MUT). In many cases we will demonstrate that the MUT is automatically passed and, therefore, does not apply.
> View the entire article in PDF format

1999 - 1994

THE QUANTUM LEAP: CHANGING THE 401(k) PLAN INVESTMENT LANDSCAPE

401(k) Loans—The Economic Perspective

By Ilene Ferenczy, Jonathon K. Cook, and W. Philly Jones
Abstract: Before deciding to tae a loan from a 401(k) plan, participants should carefully consider whether a hardship distribution or bank loan would be a better choice.
> View the entire article in PDF format

Now the Question Is: To 401(k) or 403(b)?

By Ilene Ferenczy
Abstract: Which plan is better? The answer will vary for different organizations and individuals depending upon each unique set of circumstances.
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Who's on First? A Strategy for Analyzing 401(k( Distributions in Asset Sales

By Ilene Ferenczy
Abstract: Anyone who has tried to figure out what happens to 401(k) accounts when a plan sponsor is sold or sells a division or subsidiary know what a shell game this analysis can be. The rules are so complex that you find yourself doing some sort of pension version of the Abbott & Costello "Who's on First" routine:
"Did the terminate employment?"
"Yes, but the still work there!"
"So the seller's the employer?"
"No, the buyer's the employer!"
"Then they terminated employment?"
"No, they still work there!" ("A-a-a-bbott!")
> View the entire article in PDF format

403(b) Plans: The More Things Change…

By Ilene Ferenczy
Abstract: The new TVC program has gotten off to a slow start, and some TSA issues remain unresolved.
> View the entire article in PDF format

403(b) Plans: Washington, We Have a Problem

By: Ilene Ferenczy and C. Frederick Reisch
Abstract: How viable is the new TVC program for employers? Like the other voluntary compliance programs initiated by the IRS, it is an amalgam of good news and bad. On the one hand, it helps employers to clean up their 403(b) programs, and to go forward knowing that they are not at risk for large taxes and penalties in the event of an IRS audit. On the other hand, TVC contains requirements with which some employers cannot reasonably comply and which may be too costly an option for some tax exempt entities.
> View the entire article in PDF format

403(b) Plan Documents: A Step Toward Compliance

By: Ilene Ferenczy and C. Frederick Reisch
Abstract: For nonprofit organizations, documentation of their 403(b) retirement plans is a smart way to ensure continued tax deferral. PLRs from the IRS give additional security, but the authors suggest several ways to significantly improve the entire process.
> View the entire article in PDF format

The 403(b) Examination Guidelines: A Road Map

By Ilene Ferenczy, David N. Tenebaum, and C. Frederick Reisch
Abstract: This "road map" to the new released IRS Examination Guidelines for tax-sheltered annuity programs highlights the ambiguities and potentially controversial areas in the Guidelines and how the IRS suggest employers comply with them.
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403(b) Plans: The Overlooked ERISA Dilemma

By Ilene Ferenczy and C. Frederick Reisch
Abstract: Although many 403(b) programs are excluded from ERISA Title 1 coverage, employers may find that Title 1 status is a positive feature and should not be avoided. The author explains why.
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403(b) Plans: Is the 403(b) Sky Really Falling?

By Ilene Ferenczy and C. Frederick Reisch
Abstract: The IRS is now paying closer attention to tax-exempt organizations and their compliance with 403(b) rules, but the promised audit guidelines for those plans have yet to appear. Pension administrators should view this an opportunity to offer their valuable expertise to help tax-exempts in this atmosphere of increasing IRS vigilance.
> View the entire article in PDF format