Products March 20, 2017

Pentegra Offers Fiduciary Education to Plan Sponsors and Advisers

The report is designed to help readers understand fiduciary responsibilities and corresponding liabilities, and offers recommendations and guidance for managing these duties.
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Pentegra has introduced the Pentegra Fiduciary SmartPath, a report detailing best practices and strategies for business owners, plan sponsors and advisers to use to help navigate the shifting fiduciary landscape.

The report is designed to help understand fiduciary responsibilities and corresponding liabilities, and offers recommendations and guidance for managing these duties.

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Pentegra Fiduciary SmartPath details each fiduciary role in a retirement plan and focuses on helping plan sponsors and advisers clarify the many nuances associated with fulfilling their obligations, addressing some of the most important concerns of plan sponsors today. The report also tackles why outsourcing these responsibilities may be the trend of the future.

Pentegra notes that retirement plan administration and the oversight of plan assets involve complex processes laden with compliance burdens. For many plan sponsors, the level of self-education and the commitment of time and energy required to effectively fulfill their fiduciary duties is an unwelcome concern that too often distracts from the more critical responsibility of running a business.

“Today, business owners, plan sponsors and advisers are extremely concerned with the changing regulatory landscape and overall plan administrative burdens. There is a strong desire to reduce workloads, fiduciary liability and risk. They want retirement plans to deliver successful outcomes for the sponsor as well as the participant. Our new tool, the Fiduciary SmartPath, is an invaluable resource at a very important time in the industry,” says Rich Rausser, senior vice president at Pentegra,

As part of the launch of the Fiduciary SmartPath, Pentegra will present a free PENTalk webinar on this topic Tuesday, March 21, 2017, at 11:00 am EST. Click here to register. To view the Fiduciary SmartPath click here.

Compliance March 20, 2017

Surge in Wrong VCP User Fees Prompts IRS Reminders

Mentioned in the list of reminders includes suggestions about how to avoid incorrect voluntary compliance program user fees; determining the right user fee; and qualifications for reduced fees.
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After noticing a surge of incorrect high user fees, the Internal Revenue Service (IRS) Employee Plans Voluntary Compliance function (VC) has released a reminder on ways plan sponsors can evade an overpayment of fees, such as determining the correct voluntary correction program (VCP) submission user fee, and specific qualification for reduced fees.

In order to find the right VCP user fee, the VC mentions the number of participants will usually determine user fees for 401(a) and 403(b) plans. These sponsors may review Rev. Proc 2017-4, Appendix A. 08 to find the correct fee number; or also visit the Voluntary Correction Program (VCP) Fees webpage. Additionally, the VC stresses plan sponsors to—when viewing the user fee table—utilize the fee number that correlates with the number of participants.

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For 401(a), 401(k) and 403(b) plan sponsors, the VC suggests keeping an eye out on eligibility for reduced fees. According to the VC, circumstances in which these specific sponsors may qualify for a lower fee include:

  • “If you maintain a 401(a) or 401(k) IRS pre-approved defined contribution plan and didn’t amend it by April 30, 2016, for the Pension Protection Act, you’re eligible for a 50% reduced fee if you correct the failure and mail your VCP submission to the IRS by April 30, 2017.
  • If your submission is limited to participant loans that didn’t comply with Internal Revenue Code Section 72(p), lower fees may apply. See Rev. Proc. 2017-4, Appendix A.08.
  • If your submission is limited to a failure to make minimum required distributions, lower fees may apply. See Rev. Proc. 2017-4, Appendix A.08.” 

To completely avoid an overpayment of user fees, the VC reminds plan sponsors and representatives of the following:

  • “The current Employee Plans Compliance Resolution System (EPCRS) Revenue Procedure 2016-51 no longer lists Voluntary Correction Program (VCP) user fees.
  • Plan sponsors need to refer to Rev. Proc. 2017-4, Appendix A.08 to determine the appropriate VCP user fees for submissions made in 2017.
  • As of February 1, 2016, we lowered the user fees for many types of 401(a) and 403(b) plan VCP submissions.
  • Only use the 2016 version of Form 8951 (Rev. September 2016), Compliance Fee for Application for Voluntary Correction Program (VCP), to determine specific user fee amounts; don’t use the pre-2016 versions of this form as they contain inaccurate information.”

More information about avoiding overpaying user fees from the VC can be found here. 

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