Products October 28, 2014

LPL Financial Launches Worksite App

October 28, 2014 (PLANSPONSOR.com) – LPL Financial unveiled a new Worksite Financial Solutions mobile application (app) that extends retirement plan participant and sponsor services provided through the firm’s desktop platform.
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LPL says the app provides plan participants with remote account access, allowing for key account management functions to be performed through a smartphone or other device. The launch of the Worksite Financial Solutions mobile app reflects LPL’s ongoing commitment to delivering flexible solutions that address plan participants’ evolving financial needs, the firm says.

LPL expects to officially launch the app by the end of the year. With the new resource, clients and plan participants will gain access the following features:

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  • End-to-end plan enrollment support to guide users through all phases of the retirement planning process;
  • Access to qualified LPL advisers and the firm’s Retirement Results Team, which both provide education and support for participants on managing their retirement plan accounts; and
  • Numerous financial education tools, including calculators, tutorials, videos and articles on how to manage different phases of the financial lifecycle.

The technology offers significant benefits for advisers as well, LPL claims, as the app can be co-branded for use in each adviser’s practice. The app can also be used to help enhance the adviser-participant relationship by providing additional opportunities for communication and interaction on a regular basis.

“Retirement plan participants demand the ability to make financial decisions when they want, where they want,” adds David Reich, executive vice president of Retirement Partners.

LPL Financial LLC is an independent broker/dealer (B/D), a custodian for registered investment advisers (RIAs) and a wholly owned subsidiary of LPL Financial Holdings Inc. Worksite Financial Solutions is a retirement plan platform offered exclusive to LPL Financial and its adviser partners.

More information on the firm is at www.lpl.com.

Ask the Experts October 28, 2014

(b)lines Ask the Experts – Reporting Participants Who Have Withdrawn Accounts

October 28, 2014 (PLANSPONSOR (b)lines) – “I noticed in our recently filed Form 8955-SSA, we report individuals who terminated employment, but who retain account balances in our 403(b) plan.
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“However, there is a Code in the same section of the form for reporting individuals previously reported who have since withdrawn their account balance. Should we be reporting people who fall into this category? What are the consequences if we fail to report such individuals?”  

Michael A. Webb, vice president, Cammack Retirement Group, answers:

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This is an excellent observation; great to see that you take the time to review the annual forms that you file! There is no Internal Revenue Service (IRS) requirement to report individuals who no longer maintain a vested balance in your 403(b) plan due to having received a distribution, but you may save quite a headache for those who are administering the plan 20 to 30 years from now if you do take the time to report such individuals.

To understand why this is the case, a review of why Form 8955-SSA information is reported in the first place is in order. As detailed in a past Ask the Experts column (see “(b)lines Ask the Experts – Form 8955-SSA Data from Vendors”), Form 8955-SSA information is reported by the IRS to the Social Security Administration (SSA), which stores the information and uses it to notify individuals of the possible existence of a retirement benefit from the 403(b) plan that you sponsor when they reach retirement age. Of course, it is possible, even likely, that the individual withdrew his benefit between the time he/she was reported on Form 8955-SSA and the time of retirement many years later. However this may not be clear from the notification the participant receives from the SSA, and the participant may then firmly believe he/she is entitled to a benefit from your organization, and it is then up to the organization to disprove this claim. Often, it becomes an arduous exercise to research such a claim, since the employee may have terminated employment with your organization decades ago (see “Decades-Old DB Benefit Payments Being Questioned”).

In order for the plan sponsor to avoid the need to research decades-old claims, an alternative would be to take advantage of the voluntary reporting on Form-SSA for previously reported individuals who no longer maintain vested account balances with the plan due to distribution. Such reporting does require a bit of effort each year, but it will most certainly reduce the number of future claims of employees seeking to be provided with a retirement benefit that does not exist.

Thank you for your question!

 

NOTE: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.

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