Employee Fiduciary 401k - WWYD? [What Would You Do]

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Topic Author
Seeker401
Posts: 5
Joined: Mon Mar 11, 2019 4:46 pm

Employee Fiduciary 401k - WWYD? [What Would You Do]

Post by Seeker401 » Mon Mar 11, 2019 5:03 pm

Our company signed up for Employee Fiduciary's Safe Harbor 401k late last year. After a company meeting, only 2 of the owners signed up in time for 2018. Initially everything was fine, but things started to go downhill after they handed us off to our dedicated rep. In January, we asked them when the true-up would occur. They told us that we needed to complete the forms they emailed to us weeks earlier in December for testing. We searched for, but could not find the email they were referring to. Our rep checked on this and said that for some unknown reason, the email was never sent to us. She then emailed the forms to us and we completed them. In March, as we are getting closer to business tax filing deadline (3/15), we asked her for the status of the testing and true-up. She said there was no guarantee that it would be completed on time unless we paid an expedite fee; otherwise we could file a tax extension. We asked about future years, and the answer was the same; no guarantee to be on time unless an expedite fee is paid. This is unacceptable as we don't like filing extensions nor paying our accountant extra to do so. This feels like being blackmailed. If we had known this upfront, we would have chosen to work with another company. Very bad to lure customers with low fees, but not disclose hidden charges until after they've signed on.

Questions:
(1) Is this normal with other 401k companies (that testing is not guaranteed to be completed in time to file taxes unless you pay an expedite fee)? (2) Does the safe harbor status of our 401k reduce or eliminate any compliance testing requirements? (3) Is there a deadline (e.g. 3/15) to complete our company true-up match without penalty? (4) What would you do?

Thanks in advance!

smitcat
Posts: 4358
Joined: Mon Nov 07, 2016 10:51 am

Re: Employee Fiduciary 401k - WWYD?

Post by smitcat » Mon Mar 11, 2019 6:07 pm

Seeker401 wrote:
Mon Mar 11, 2019 5:03 pm
Our company signed up for Employee Fiduciary's Safe Harbor 401k late last year. After a company meeting, only 2 of the owners signed up in time for 2018. Initially everything was fine, but things started to go downhill after they handed us off to our dedicated rep. In January, we asked them when the true-up would occur. They told us that we needed to complete the forms they emailed to us weeks earlier in December for testing. We searched for, but could not find the email they were referring to. Our rep checked on this and said that for some unknown reason, the email was never sent to us. She then emailed the forms to us and we completed them. In March, as we are getting closer to business tax filing deadline (3/15), we asked her for the status of the testing and true-up. She said there was no guarantee that it would be completed on time unless we paid an expedite fee; otherwise we could file a tax extension. We asked about future years, and the answer was the same; no guarantee to be on time unless an expedite fee is paid. This is unacceptable as we don't like filing extensions nor paying our accountant extra to do so. This feels like being blackmailed. If we had known this upfront, we would have chosen to work with another company. Very bad to lure customers with low fees, but not disclose hidden charges until after they've signed on.

Questions:
(1) Is this normal with other 401k companies (that testing is not guaranteed to be completed in time to file taxes unless you pay an expedite fee)? (2) Does the safe harbor status of our 401k reduce or eliminate any compliance testing requirements? (3) Is there a deadline (e.g. 3/15) to complete our company true-up match without penalty? (4) What would you do?

Thanks in advance!
"(1) Is this normal with other 401k companies (that testing is not guaranteed to be completed in time to file taxes unless you pay an expedite fee)?"
This has been our 4th year with Employee Fiduciary - we have never had this problem or paid or heard of an expedite fee.

"(2) Does the safe harbor status of our 401k reduce or eliminate any compliance testing requirements?"
Yes to some extent but they still need to confirm a number of items with your employees, all basic info that you must provide.

"(3) Is there a deadline (e.g. 3/15) to complete our company true-up match without penalty?"
IDK the true up date deadline - we paid out the match for 2018 in early February.

"(4) What would you do?"
We are very happy with Employee Fiduciary and small issues have been handled rather quickly. Are you the one actually in contact with them?
Are you getting this information first hand? Who is performing the weekly or biweekly payroll file deductions?

Topic Author
Seeker401
Posts: 5
Joined: Mon Mar 11, 2019 4:46 pm

Re: Employee Fiduciary 401k - WWYD?

Post by Seeker401 » Tue Mar 12, 2019 12:53 am

Smitcat, thank you for your reply. Following up on your responses:

"(1) Is this normal with other 401k companies (that testing is not guaranteed to be completed in time to file taxes unless you pay an expedite fee)?"
Your respone: This has been our 4th year with Employee Fiduciary - we have never had this problem or paid or heard of an expedite fee.
Question: Our rep mentioned the expedite fee several times - seemed like they really wanted us to just pay this. Do you have a safe harbor 401k? From your 4 years of experience with them, how long does it normally take them after you submit your forms? When have they been completing all your compliance testing (e.g. end of February)? (I wonder if we've been put at the end of the line since we're a new client.)

"(3) Is there a deadline (e.g. 3/15) to complete our company true-up match without penalty?"
Your response: IDK the true up date deadline - we paid out the match for 2018 in early February.
Question: Did EF do the true-up matching (and calculations) or did your company take care of that in-house? Every time I ask our rep about the true-up, she says that the compliance testing needs to be done first. Really worried that their testing will be delay us in doing the true-up and result in late penalties.

"(4) What would you do?"
Your response: We are very happy with Employee Fiduciary and small issues have been handled rather quickly. Are you the one actually in contact with them? Are you getting this information first hand? Who is performing the weekly or biweekly payroll file deductions?
Answer: Yes, I'm the one talking to them. Our accountant has been handling the deductions. She completed our business tax return a month ago, but is now waiting for the true-up from EF before amending the return. Maybe we should be asking for a new rep?

smitcat
Posts: 4358
Joined: Mon Nov 07, 2016 10:51 am

Re: Employee Fiduciary 401k - WWYD?

Post by smitcat » Tue Mar 12, 2019 9:33 am

Seeker401 wrote:
Tue Mar 12, 2019 12:53 am
Smitcat, thank you for your reply. Following up on your responses:

"(1) Is this normal with other 401k companies (that testing is not guaranteed to be completed in time to file taxes unless you pay an expedite fee)?"
Your respone: This has been our 4th year with Employee Fiduciary - we have never had this problem or paid or heard of an expedite fee.
Question: Our rep mentioned the expedite fee several times - seemed like they really wanted us to just pay this. Do you have a safe harbor 401k? From your 4 years of experience with them, how long does it normally take them after you submit your forms? When have they been completing all your compliance testing (e.g. end of February)? (I wonder if we've been put at the end of the line since we're a new client.)

"(3) Is there a deadline (e.g. 3/15) to complete our company true-up match without penalty?"
Your response: IDK the true up date deadline - we paid out the match for 2018 in early February.
Question: Did EF do the true-up matching (and calculations) or did your company take care of that in-house? Every time I ask our rep about the true-up, she says that the compliance testing needs to be done first. Really worried that their testing will be delay us in doing the true-up and result in late penalties.

"(4) What would you do?"
Your response: We are very happy with Employee Fiduciary and small issues have been handled rather quickly. Are you the one actually in contact with them? Are you getting this information first hand? Who is performing the weekly or biweekly payroll file deductions?
Answer: Yes, I'm the one talking to them. Our accountant has been handling the deductions. She completed our business tax return a month ago, but is now waiting for the true-up from EF before amending the return. Maybe we should be asking for a new rep?
Summary - requesting to speak to a supervisor would be my first choice right now. Having specific set of questions for that supervisor ready ahead of the call would help a bunch.
True up-we have never had a correction to make , once we confirm the yearly files we were done except for the matching fund payments which we made a while back for 2018.

We have 2 small companies and I do all the weekly (yes -we are still weekly payroll) payroll file transfers to EF (takes less than 10 minutes a week)
Yes - we have a safe harbor plan
Time to get reply after sending in yearly employee spreadsheet - I believe it was near 3 weeks on our first year 4 yrs back as we started late that first year (our delay) when all the other companies would be sending in theirs.
Since then we can easily do this early in the year before most other companies have sent theirs in so the reply is less than a full week.
We do all of our "true ups" (none required actually) - we have those yearly totals in our payroll report so its rather simple to pull them out for EF.
Our accountant does not touch the weekly or yearly EF requirements - this is really book keeping and he just receives our outputs for completing taxes.

Before we were with EF we had a much more costly 401K service which did more of this for us - since we switched it takes us a bit longer but there is no comparison in costs - and we needed to know how all this works anyway.
I am guessing that your payroll to > accountant to > EF handoffs are not so smooth and maybe generating more work and confusion then necessary , but I cannot tell from here.
Do you folks run the reports for employees available as well? Are you comfortable with the online tools you can access with your sponsor log in?
Did you have a good onboarding process and fund selection event? Who do your employees go to for answers to questions your accountant or you?

Topic Author
Seeker401
Posts: 5
Joined: Mon Mar 11, 2019 4:46 pm

Re: Employee Fiduciary 401k - WWYD?

Post by Seeker401 » Wed Mar 13, 2019 8:08 am

Smitcat - thank you sharing your experience and information. It was very helpful. We have spoken to an EF supervisor who is expediting the testing for us. He also apologized for the incorrect information that was being given, and for the frustrating process that we've had to endure. Hopefully we'll experience better service from here (will come back and update this thread if this is not the case).

smitcat
Posts: 4358
Joined: Mon Nov 07, 2016 10:51 am

Re: Employee Fiduciary 401k - WWYD?

Post by smitcat » Thu Mar 14, 2019 8:40 am

Seeker401 wrote:
Wed Mar 13, 2019 8:08 am
Smitcat - thank you sharing your experience and information. It was very helpful. We have spoken to an EF supervisor who is expediting the testing for us. He also apologized for the incorrect information that was being given, and for the frustrating process that we've had to endure. Hopefully we'll experience better service from here (will come back and update this thread if this is not the case).
Glad I could help....

Just for benchmark purposes I am more or less a Neanderthal with a computer lacking the speed or knowledge that came with the generations that grew up with them. Yesterday I timed my EF inputs for the week - it took me just over 6 minutes to complete the weekly EF download with one person interrupting me along the way. Here is a weekly submission summary:
- take the weekly payroll report for input
- type 11 participating employees inputs into a premade shell spreadsheet
- open the EF site with admin (sponsor) clearance
- download the file and record the confirm number
- enter total 401K transfer $$ into QuickBooks
From there I can always view or print any reports that I like but about 99% of the time I am done. When it comes to the yearly tests and confirms it is very similar but it takes about 10 minutes for every 5 employee adds or for every 5 employee separations if you had any at all.
So its really not tine consuming or complicated to interface with the EF site and provide the payroll data you need for this 401K program.
FWIW - based upon your posts it appears that you have many people involved and no one is actually the overall responsible person who sees the big picture. It appears you have these participants : Payroll / Accountant / EF / Yourself / and maybe one other at your company. Each handoff will provide another opportunity for confusion and complication - this is not accountants work and its not hard to do.
EF will be waiting for your input and sending someone emails - who they go to may be a/the problem.
Whomever is the overall person responsible for the 401K program should know the limited target dates and process steps and be the champion for the program at your company. Whatever help or training that person needs can come from EF during onboarding , their website, phone calls and other help but with so many people involved I am wondering if this information has been split up with not correlating skill & responsibility.
Food for thought - make it easy because it is easy.

ERISA Stone
Posts: 1625
Joined: Tue Jun 24, 2014 8:54 am

Re: Employee Fiduciary 401k - WWYD?

Post by ERISA Stone » Thu Mar 14, 2019 10:31 am

I have the same issue with EF. they send me emails and phone calls demanding that I have my info in by 1/31 or they can't promise the testing will be done in a timely manner. This year and I pushed back and told them they had to give me a timeline - I didn't care if it was 3 months - that it would take them to finish the testing. They refused unless I paid the expedition fee. I told them I would get to it when I got to it. I'm not putting myself in a rush just to provide them information so they can sit on it.

They give priority to plans with contribution calculations but for some weird reason, they don't consider a true-up calculation to be a contribution allocation. I think it's to push people to pay the expedition fee.

I've expressed my dismay at EF several times on this website. If I didn't have prior industry experience, I would stay far, far away from them. They are exactly the story that I dealt with professionally many times in which we would end up cleaning up messes prior TPAs created for our clients.

FYI - most TPAs guarantee a 6-8 week turnaround on year-end compliance once they have all of the information needed.

smitcat
Posts: 4358
Joined: Mon Nov 07, 2016 10:51 am

Re: Employee Fiduciary 401k - WWYD?

Post by smitcat » Thu Mar 14, 2019 11:45 am

ERISA Stone wrote:
Thu Mar 14, 2019 10:31 am
I have the same issue with EF. they send me emails and phone calls demanding that I have my info in by 1/31 or they can't promise the testing will be done in a timely manner. This year and I pushed back and told them they had to give me a timeline - I didn't care if it was 3 months - that it would take them to finish the testing. They refused unless I paid the expedition fee. I told them I would get to it when I got to it. I'm not putting myself in a rush just to provide them information so they can sit on it.

They give priority to plans with contribution calculations but for some weird reason, they don't consider a true-up calculation to be a contribution allocation. I think it's to push people to pay the expedition fee.

I've expressed my dismay at EF several times on this website. If I didn't have prior industry experience, I would stay far, far away from them. They are exactly the story that I dealt with professionally many times in which we would end up cleaning up messes prior TPAs created for our clients.

FYI - most TPAs guarantee a 6-8 week turnaround on year-end compliance once they have all of the information needed.
FWIW - 3 years running now and we get it back in less than 2 weeks without calling or pursuing them.
YMMV

ERISA Stone
Posts: 1625
Joined: Tue Jun 24, 2014 8:54 am

Re: Employee Fiduciary 401k - WWYD?

Post by ERISA Stone » Fri Mar 15, 2019 8:24 pm

smitcat wrote:
Thu Mar 14, 2019 11:45 am
ERISA Stone wrote:
Thu Mar 14, 2019 10:31 am
I have the same issue with EF. they send me emails and phone calls demanding that I have my info in by 1/31 or they can't promise the testing will be done in a timely manner. This year and I pushed back and told them they had to give me a timeline - I didn't care if it was 3 months - that it would take them to finish the testing. They refused unless I paid the expedition fee. I told them I would get to it when I got to it. I'm not putting myself in a rush just to provide them information so they can sit on it.

They give priority to plans with contribution calculations but for some weird reason, they don't consider a true-up calculation to be a contribution allocation. I think it's to push people to pay the expedition fee.

I've expressed my dismay at EF several times on this website. If I didn't have prior industry experience, I would stay far, far away from them. They are exactly the story that I dealt with professionally many times in which we would end up cleaning up messes prior TPAs created for our clients.

FYI - most TPAs guarantee a 6-8 week turnaround on year-end compliance once they have all of the information needed.
FWIW - 3 years running now and we get it back in less than 2 weeks without calling or pursuing them.
YMMV

MMDV. Last year I turned mine in prior to 1/31 and I received the report sometime in late April. No issues with my census. No follow up from them.

Topic Author
Seeker401
Posts: 5
Joined: Mon Mar 11, 2019 4:46 pm

Re: Employee Fiduciary 401k - WWYD?

Post by Seeker401 » Wed Mar 20, 2019 5:36 am

ERISA Stone wrote:
Thu Mar 14, 2019 10:31 am
FYI - most TPAs guarantee a 6-8 week turnaround on year-end compliance once they have all of the information needed.
That sounds more reasonable than the response we received from our rep, that they could not provide an estimate for how long the compliance testing would take (unless we paid the expedite fee).

Topic Author
Seeker401
Posts: 5
Joined: Mon Mar 11, 2019 4:46 pm

Re: Employee Fiduciary 401k - WWYD?

Post by Seeker401 » Wed Mar 20, 2019 5:39 am

ERISA Stone wrote:
Fri Mar 15, 2019 8:24 pm
MMDV. Last year I turned mine in prior to 1/31 and I received the report sometime in late April. No issues with my census. No follow up from them.
What?!! That shouldn't happen, based on the supervisor I spoke with. He said that if all your information is received by 1/31, then they guarantee that the testing will be completed by 3/15. Did they give you a reason for the delay?

ERISA Stone
Posts: 1625
Joined: Tue Jun 24, 2014 8:54 am

Re: Employee Fiduciary 401k - WWYD?

Post by ERISA Stone » Wed Mar 20, 2019 8:42 am

Seeker401 wrote:
Wed Mar 20, 2019 5:39 am
ERISA Stone wrote:
Fri Mar 15, 2019 8:24 pm
MMDV. Last year I turned mine in prior to 1/31 and I received the report sometime in late April. No issues with my census. No follow up from them.
What?!! That shouldn't happen, based on the supervisor I spoke with. He said that if all your information is received by 1/31, then they guarantee that the testing will be completed by 3/15. Did they give you a reason for the delay?
I followed up with them, probably around the beginning of March. I was told that since my plan didn't require a contribution calculation (not even true), it was not given priority. I was given the option to pay the expedition fee to have the results by 3/15.

smitcat
Posts: 4358
Joined: Mon Nov 07, 2016 10:51 am

Re: Employee Fiduciary 401k - WWYD?

Post by smitcat » Wed Mar 20, 2019 9:17 am

ERISA Stone wrote:
Wed Mar 20, 2019 8:42 am
Seeker401 wrote:
Wed Mar 20, 2019 5:39 am
ERISA Stone wrote:
Fri Mar 15, 2019 8:24 pm
MMDV. Last year I turned mine in prior to 1/31 and I received the report sometime in late April. No issues with my census. No follow up from them.
What?!! That shouldn't happen, based on the supervisor I spoke with. He said that if all your information is received by 1/31, then they guarantee that the testing will be completed by 3/15. Did they give you a reason for the delay?
I followed up with them, probably around the beginning of March. I was told that since my plan didn't require a contribution calculation (not even true), it was not given priority. I was given the option to pay the expedition fee to have the results by 3/15.
We left our last plan almost 4 years back due to high fees and also problems like this. If we had these problems now with EF we would be looking elsewhere for another 401K program. Perhaps informing the supervisor of those intentions in an email would go a long way to solving your problem.

JollyAbby65
Posts: 1
Joined: Tue Aug 20, 2019 8:28 pm

Re: Employee Fiduciary 401k - WWYD?

Post by JollyAbby65 » Tue Aug 20, 2019 8:43 pm

ERISA Stone wrote:
Thu Mar 14, 2019 10:31 am
I've expressed my dismay at EF several times on this website. If I didn't have prior industry experience, I would stay far, far away from them. They are exactly the story that I dealt with professionally many times in which we would end up cleaning up messes prior TPAs created for our clients.
Any suggestions for a "mom and pop and son" business?

We're 3-4 years away from retirement and have means to live independent of our salary. Our intention is to pay ourselves just enough to maximize contributions to a 401k (we're small but a full blown C corp). Our SEP limits us to 25% of salary so we can't invest as much as we'd like. A 401K seems like it would give us much of what we want. My wife and I would not be considered high income so I'm not sure we'd require any sort of special tests. We'd probably be paying our son more than we pay ourselves.

I read your initial review and your 15 month followup. Sounds like things have gone a little south?

smitcat
Posts: 4358
Joined: Mon Nov 07, 2016 10:51 am

Re: Employee Fiduciary 401k - WWYD?

Post by smitcat » Wed Aug 21, 2019 8:08 am

JollyAbby65 wrote:
Tue Aug 20, 2019 8:43 pm
ERISA Stone wrote:
Thu Mar 14, 2019 10:31 am
I've expressed my dismay at EF several times on this website. If I didn't have prior industry experience, I would stay far, far away from them. They are exactly the story that I dealt with professionally many times in which we would end up cleaning up messes prior TPAs created for our clients.
Any suggestions for a "mom and pop and son" business?

We're 3-4 years away from retirement and have means to live independent of our salary. Our intention is to pay ourselves just enough to maximize contributions to a 401k (we're small but a full blown C corp). Our SEP limits us to 25% of salary so we can't invest as much as we'd like. A 401K seems like it would give us much of what we want. My wife and I would not be considered high income so I'm not sure we'd require any sort of special tests. We'd probably be paying our son more than we pay ourselves.

I read your initial review and your 15 month followup. Sounds like things have gone a little south?
Definitely sounds like ERISA Stone has had some real problems with EF.
Just as another data point we are in our 4th year now with them and no issues.

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