References to the hilariously un-PC movie Airplane set the stage for That 401(k) Conference at Coors Field in Denver Friday morning.
In a demonstration of the value ERISA attorneys provide, ERISA attorney Ary Rosenbaum (coincidentally) kicked it all off with a reference to Barbara Billingsley’s scene stealer, in which she translated jive for a confused stewardess in the 1980 disaster parody.
“Stewardess, I speak ERISA,” conference host Rosenbaum deadpanned.
Claiming that ERISA is unique federal tax law, almost all non-ERISA attorneys don’t know what it is, and some may actually tell you they don’t know.
“You need an ERISA attorney who speaks English, not ERISAee. Also, the TPA’s attorney cannot provide you with an attorney-client relationship.”
Importantly, he added, “watch that billing. Billing by the hour is the power to destroy. You have no idea about costs until the end of the month.”
Turning specifically to the Department of Labor, Rosenbaum noted DOL and IRS audits are now a “big thing,” and one of the biggest mistakes is “allowing clients to handle an audit on their own.”
And due to recent changes, the DOL is asking new questions.
“This results in compliance issues of which plan sponsors were never aware. Late deferrals, especially, are a big thing for DOL auditors.”
401(k) sponsor fear
Once again referencing Airplane, and the woman who became hysterical while proclaiming “I’ve got to get out of here!” Rosenbaum argued plan sponsors—and many ERISA attorneys—are reactive, and not proactive.
“They’re afraid of attorneys and, based on many billing habits, rightly so. Plan sponsors would rather not know about potential issues, like ‘If I don’t go to the doctor, then I’m not sick.’ This is the attitude. When are problems discovered? When there’s a TPA change or during an audit, which is very costly at that point.”
Rather than hourly (and potentially astronomical) billing, ERISA attorneys like Rosenbaum offer flat fees.
“Yes, you can use an ERISA attorney for plan documents, amendments and plan mergers,” he concluded. “Some TPA documents don’t fit plan sponsors needs, the client relationship might not be appropriate with other attorneys, and the fees might not be reasonable. It’s a shameless plug, but this is why ERISA attorneys are critically important.”
Join the next That 401(k) Conference, Friday, September 20, 2019, 9:00 am – 2:00 pm at Progressive Field in Cleveland, Ohio.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
