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fischermh

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About fischermh

  • Birthday 11/09/1962

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    http://www.amdgadvisors.com
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    Peninsula, Ohio
  1. On the ERISA side, many times 404© does not apply due to the sponsor not meeting all of the 404© requirements. To the point at hand, for many years I have heard the theory that non-ERISA 403(b) plans may come under the scope of state fiduciary laws. However, I am not aware of a single case that one has. I think it is a red herring, until such a case arises.
  2. California RE Gains tax is also an issue. If you haven't closed on the sales, you may want to look into a 1031 Tenant-in-Common investment. Many are not good,but there are some good ones.
  3. So if an employer types 0.00 in for an employee's wages on a W2, even if he made $100,000, the employer is not liable to withhold taxes on $100,000? Usually when I ask for guidance and the guidance makes sense, I do not ask for cites or a PLR.
  4. Do you have a cite for the Employer not being liable for an excess contribution? I have discussed the issue with the IRS, and they do not concur with your interpretation.
  5. That is great news, an employer is not responsible for withholding income taxes from employees pay. I would advise all school districts based on intruders position to immediately cease withholding taxes from its employees checks. In fact, I believe I heard some arguing that income taxes are unconstitutional. Let's all stop paying them. The government won't throw us in jail. Asking a simple question on a form is very burdensome, and think of all the wasted ink.
  6. Unless you have experienced a distributable event, your money will have to remain with an approved vendor. Setting aside the bias of the decision makers, your 403b plan can have multiple vendors. NFP does not have to be the only investment option. The committee should consider including low cost investment options.
  7. The employers liability for excess contributions are the penalties for under withholding of payroll taxes. There would also be an argument if the excess contributions were egregious, there is a slight chance that the plan would be disqualified. From a practical standpoint, this is an absurd debate. All that is necessary for a SD to do to eliminate the potential liability is to ask if the participant participates in another plan. This can be done on the SRA, in an annual notice or any other number of ways. It is not burdensome or difficult, thus I don't understand why anyone would recommend not to do it.
  8. Steve and Tony, We are going to have to respectfully disagree. In my experience, I know that tactical asset allocation can add value to an investment portfolio. Additionally, for many investors, it is more important to err on the side of safety, than to not miss a move in the market. Tony, your point that the market is not rationale is part of the argument against Modern Portfolio Theory. If CAPM/MPT were to hold true, the market would not be on sale. Finally, be careful with the market is on sale mantra. It is actually a long used broker sales pitch. Back a few years ago was the NASDAQ on sale at 4,000 (20%) off its high?
  9. Scotty is correct. The district must ask for the information. The district is responsible for taking reasonable measures. If they chose to not ask, then they have not taken reasonable measures to maintain plan compliance. If they ask, and the employee lies, then the district will not be held liable. My guess is that the district was pressured to add the funds, and wanted to wash its hand of any liability. Unfortunately, they are wrong. The employee is not the plan administrator. The employee is acting as their own advisor, but that is distinctly different from being an administrator.
  10. If you believe the market is going to be rocky for the next few years, going to short term bonds and or cash is not a bad idea. Keep in mind that if you are wrong, you may miss out on potential arket gains. However, if you sleep better at night, it may well be worth it. Personally, I am also concerned with the economy. From my perspective, it makes sense to lighten equity exposures substantially. Over the next year or two, I think worse case is a serious bear market and the best case is the market bouncing around in a trading range. I do not think that we will see substantial gins in the market over the short term. So from my perspective, there is little downside to standing on the sidelines. That being said, talke my perspective with a grain of salt. I definitely could be wrong. The economy has surprised us before, and it may do it again.
  11. Unlike 401ks, the tax law does not provide for an in service distribution from a 403b. Unless you have had a distributable event, you cannot take a distribution. It is totally a function of tax law and has nothing to do with the vendor. In fact, the vendor is doing the correct thing by not allowing it. If they did, they would be putting the employer at risk. You can take a loan, but make sure you pay it back on time. Buying investment property is not a hardship.
  12. If they are front end load (A Shares) funds, you will not have a charge on the fund side. You may end up with a charge from the trust company maintaining the IRA.
  13. My guess is that lawyers can cite it, and may be successful in applying it to ERISA plans. Non-ERISA plans would not directly apply. Although, as we have speculated in the past, state laws may provide a rationale for a non-ERISA action.
  14. There are two ways to do administration. One is labor intensive, one is initially capital intensive. Big insurance companies will invest millions of dollars to build an automated administration system. In a large part the administration is automated and does not require many people to operate. The capital investment is amortized over a long period of time, so it makes sense from a capital budgeting standpoint. On the other hand, small administrative companies that do not have large capital resources, rely on employees and off the shelf systems that were not designed for 403b multiple vendor administration. This is why it is critical to conduct very thorough due diligence, before contracting with an independent TPA. You may be surprised by what you find. Professionals: How do you resolve the fact that annuity providers have enough profit margin within their products to even offer what is considered an expensive, labor intensive service? The simple fact is their pricing has remained mostly stagnant (high) while their operating costs have plummeted due to technology, and participant longevity. Just look at the rates for term life which are a fraction of what they were 10-15 years ago. If the participants interests were the primary focus, these costs would have come down long ago. But when the people who make the decisions aren't spending their own money, what do we expect? Let me ask again, how do you folks square the unfair practice of allowing some participants to unknowingly pay for an admin service that benefits all participants? Jim EDIT: Note, I used the term "operating" costs, not distribution costs, a completely different matter.
  15. Some of us find it hard to believe that they will act in terms of the agreement.
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