MASSACHUSETTS RETIREMENT PLANS CONSORTIUM
MINUTES OF SEPTEMBER 20, 2007 MEETING
Meeting Location:Anne O’Neil
Eastern Bank, Lynn, MA
In attendance: Darlene Accardi, East Cambridge Savings Bank; Louise Mallett, Salem Five; Rhonda DiStasio, East Boston Savings Bank; Louise Carvalho, Jeanne D’Arc Credit Union; David Hammond, SBLI Retirement Services and Arlene Bradley, Randolph Savings Bank.
Darlene called the meeting to order. Rhonda gave the Treasurer’s Report indicating a current bank balance of $2,310.18.
Dormant Accounts and Abandoned Property issues were discussed with the age old dilemma presenting itself of when is an Ira account considered “dormant” by the Commonwealth of Massachusetts. The Commonwealth takes the position of assuming an Ira account abandoned: if an Ira account holder starts taking distribution after age 59 ½ and then stops for a period of 3 years or longer or if the account owner attains age 70 ½ and there is no activity on their Ira account for 3 years.
Some of us are being contacted by retirement form vendors and are being told that we should send notification to our customers/members regarding amendments to the Ira plan document. The 5305 series of forms was last amended in 2002 per REV.Proc 2002-l0.
Historically, disclosure statement amendments are only required when the plan document goes through a revision. The IRS has not revised the 5305 forms as of yet. This may take place in 2008.
We are not required to send out a disclosure/amendment at this time. If you do, you may be opening your institution up to sending a notification now and another one when the IRS does revise the 5305 forms. This is double the work and double the expense and not double the pleasure……This will also undoubtedly confuse your customers/members unnecessarily.
Qualified Plans are scheduled to be restated in 2009….the IRS proposes to do this every 6 years with Defined Benefit Plans on a cycle, Defined Contribution Plans on another cycle with perhaps something changing each year. It is becoming more difficult to find vendors who offer the documents to restate these plans and it is also becoming an expensive process that most institutions do not want to put themselves through. These plans are not as popular as they were years ago since the introduction of 40l(k) Plans and the increased contribution limits for Sep/Ira Plans.
Death claims pertaining to Ira beneficiaries were discussed. The never- ending question of whether to allow a beneficiary to name a beneficiary or to allow a beneficiary to transfer in or out their beneficial interest in an Ira Plan. Each institution feels differently about this and has to adopt their own policies and procedures to minimize any liability they would incur as a result of this situation. The instance of these situations is only going to increase in the future with younger people inheriting retirement plans that have grown to substantial balances over the years. These beneficiaries want to grow their inheritance more aggressively than a 4 or 5 percent certificate of deposit can offer them.
The subject of attendance at the MRPC meetings came up. We all seem to be buried with work and controlled by time and budget constraints. What is the answer or is there an answer?? If you have any suggestions or ideas, please share them with Darlene Accardi, President or Liz Turner, Vice President or Rhonda or myself. We all want the group to continue and prosper. The group is made up of seasoned members and newcomers to the retirement plan arena. We all have so much to give to one another and learn from one another. Remember, we are the only ones who understand and see the value in what we do!
Look forward to seeing you at the October 18th meeting hosted by David Hammond at SBLI Retirement Services in Woburn. Please take a minute of your time to let Dave know if you will be attending the meeting so he can plan for seating, refreshments, etc. You can either email him or call him at (888)438-7254, Ext. 5459.
Respectfully submitted,
Louise J.T. Carvalho
Secretary