404(c) / Fiduciary responsibilities
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I have done little to no research or business on retirement plans thus far in my career. In reality, I've started and stopped more times than I care to think about. But I'm getting bored with what I'm currently doing and I'm looking for a new challenge. Retirement plans seem to be something that no other EDJ guys in my area are even thinking about, so it might be something for me to do that's different than everyone else.
So, I've been looking through Larkspur and have seen references to plans that have no 404(c) election indicated. Am I interpreting correctly that if you don't make your retirement plan 404(c) compliant, you are leaving yourself open to lawsuits for losses taken by an employee who decides to sue you? In essence by not making that election you are saying that you are taking on a fiduciary relationship with your employees. Not that an employer has a fiduciary responsibility to it's employees, but you are open to being sued which can be awfully expensive and damaging to your reputation in town even if you win. Am I thinking correctly on this one?
A company can have a non ERISA plan. PPA 2006 allows for suits from individual plan participants for losses.
If you don't know K plans - one way to start is to make appointments in small plans and screw up - a lot. Bring in wholesalers to help you on the discovery - leash them from talking product on discovery meeting. Tell them you will allow them to bid on the business. Do the same with 2 or three local TPA firms that ARE NOT SELLING TPAs. (find out first...or they will take your prospects with a smile)
When you start, pull lots of quotes until you are very comfortable with the pitches. Always have an apple pitch, an orange pitch and what I refer to as a kiwi. Show something similar to what they have, something different and be prepared with an outlier idea. ALWAYS.
If fewer than 20 employees and large account balances, no reason to not suggest breaking the plan down to a SIMPLE. Less overhead cost, employees have more choices. match is sometimes a hurdle - but not always. Fills your pipeline to the brim with October 1 business.