Apex Pension Strategies the TPA Service 04 / 04
THE INDEPENDENT
VOICE.
Apex publishes one line about this desk: “Retirement plan expertise independent of the assets.” No funds, no commissions, nothing of ours riding on the answer. What is left is the document, the arithmetic and a straight reading of both.
THE FIVE CALLS THIS DESK GETS.
Consulting sounds abstract until the phone rings, and then it is nearly always one of these five. Each arrives as a symptom rather than a question.
- Case 01Stock acquisition
“WE BOUGHT A COMPANY.”
The window Terminating the seller’s plan generally has to be decided before closing. Cheap to decide early, expensive to revisit.
A stock purchase brings the seller’s employees into your controlled group, and their plan with them. Coverage and testing now run on a population that was not on your census in December. The Code allows a transition period for that, ending on the last day of the first plan year beginning after the transaction.
What Apex does
We read both plan documents and the purchase agreement, then set out the three paths: keep the seller’s plan, merge it into yours, or terminate it. Each does something different to vesting, to protected benefits and to the testing.
- Case 02Controlled and affiliated service groups
“I OWN THREE COMPANIES.”
No deadline Nothing puts this on a calendar. A plan written as though one entity stands alone fails quietly.
Common ownership can make separate businesses one employer for plan purposes, so coverage and nondiscrimination testing run across everybody in the group rather than the entity that signed the document. A management company serving a professional practice reaches the same result through the affiliated service group rules, with no common ownership at all.
What Apex does
We map the ownership, the entities and the service relationships, then test the plan against the population the rules name. Where a group turns out to exist, the design usually has to change with it.
- Case 03A test that keeps failing
“OUR PLAN KEEPS FAILING.”
The clock A failed test has two deadlines behind it and the cheaper one comes first. Both live on the compliance page.
Sometimes that is a testing problem. Sometimes it is a design problem wearing a testing problem’s clothes. The pass or fail line tells you less than the three years behind it: a margin that thins every year is describing a workforce that has changed shape.
What Apex does
We read the document, the census and three years of testing together, and tell you which of the two you have. If it is design, the fix belongs in an amendment rather than in another March refund.
- Case 04Winding a plan down
“WE WANT TO SHUT THE PLAN DOWN.”
The last filing A plan is finished when the last account has left the trust and the final Form 5500 is filed.
A termination reads as one decision and is really a sequence: a board resolution and an amendment, full vesting, a final allocation, participant notices, every account distributed, then a final Form 5500. Out of order, any one of them holds up the rest.
What Apex does
We plan the sequence, do the administrative work inside it, and say where you need counsel rather than us. Defined benefit terminations add a funding requirement and a PBGC process, and run longer.
- Case 05A second opinion
“SOMEONE PROPOSED THIS. IS IT REAL?”
Before you commit A proposal can be read before it is signed. Unwinding one that was wrong for the census takes plan years.
Somebody has put a structure in front of you: a redesign, a plan merger, a contribution strategy with a number attached. The person proposing it is usually the person who benefits if you say yes, which does not make it wrong.
What Apex does
We take the proposal apart against your document and your census and say what it would do to contributions, to coverage and to testing. In the firm’s published words, “Apex is the independent voice to confirm your idea or analyze your strategy,” and nothing of ours rides on the answer.
THE STANDING WORK BEHIND THE CASES.
Under the five calls sit six capabilities that run whether or not anything has gone wrong. It is the list the firm publishes for consulting.
- All compliance testing, performed here rather than handed back
- The fiduciaries protected, their decisions documented and defensible
- Forms 5500 prepared and reconciled, delivered ready for signature
- Vesting calculated participant by participant, service and breaks included
- Loan and hardship availability answered against this document, today
- Expertise independent of the assets, and the independent voice with it
THE DOCUMENT, READ AGAINST THE PRACTICE.
The most useful engagement here is the least dramatic: we read the plan document and every amendment, then set it beside the way the plan is run.
Drift is slow. A payroll change, a departure, a provider transition, and a provision that was true four years ago stops being true. Found now, it is administration. Found in an examination, it is a correction with a fee attached.
| Provision | In the documentRead againstWhat drift looks like |
|---|---|
| Compensation | The definition used for deferrals, match and the employer contribution.Read againstThe payroll earnings codes those were actually run on.DriftA bonus or commission code left out of a definition that includes it, on every pay date since payroll changed. |
| Eligibility | The service requirement and the entry dates the plan sets.Read againstThe dates people were actually let in.DriftEligibility run off hire dates where the document counts hours, so somebody entered a quarter late. |
| Vesting | The schedule adopted, and the service it counts.Read againstThe percentages participants have been shown.DriftA schedule on the statement the plan never adopted, found when somebody leaves and disputes the number. |
| Allocation | The formula, the groups it names, the conditions on each.Read againstWhat was allocated, participant by participant.DriftA group that stopped matching the document after a reorganization, allocating on a structure that has gone. |
The third column is what a mismatch looks like, not a finding about your plan.
THE LINE WE DO NOT CROSS.
- Not a registered investment adviser
- We do not select or monitor investments. That conversation belongs to your advisor.
- Not a law firm
- We describe what the rules require. A decision that needs an opinion behind it needs your attorney.
- Not your accountant
- We do not give the tax outcome of a strategy. Your CPA gets the plan facts and the arithmetic to work from.
What that leaves, which is most of the question
Describing precisely what the Internal Revenue Code and ERISA require of this plan. Modeling what each option does to contributions and to testing, in numbers rather than impressions. Handing your CPA and your attorney the plan facts they need.
We do not give legal or tax advice, and we never manage the investments.
“Retirement plan expertise independent of the assets.”
That is not modesty. It is why an answer from this desk has no second motive behind it.
THE QUESTIONS THAT BELONG TO ANOTHER DESK.
Consulting is the reading and the arithmetic. Several of the questions that arrive with it are a different job, and two belong to the other entity in this building. A consulting answer is one you act on; a fiduciary appointment is responsibility taken in writing.
- Who is legally responsible for this decision3(16) Plan Administrator: Apex Fiduciary Services, LLC
- Who sits on the participants’ side of a stock transactionIndependent ESOP Trustee: Apex Fiduciary Services, LLC
- What should the plan look like insteadPlan Design: Service 01 / 04
- Why did this fail, and by when must it be fixedCompliance & Testing: Service 03 / 04
- Who runs the plan once the decision is madePlan Administration: Service 02 / 04
BRING US THE QUESTION.
Describe the situation and send the documents: the plan and its amendments, the last two Forms 5500, the testing history, and the purchase agreement where there is one. We will tell you what the rules require and what each option would do.
- [email protected]
- Telephone
- (770) 410-5022
- PO Box 88208, Atlanta, GA 30356
There is no form here. The call is with the people who would read the documents, and it is Apex Pension Strategies, Inc. you are engaging when you do.
