Employee Incentive Plan Inc.

Complaint: ***
I am rejecting this response because:I have reviewed the response made by the business in reference to complaint ID ***, and find that this resolution is unsatisfactory to me.
Regards,
James Grabowski

Thank you for reaching out to our firm – we value feedback and appreciate client concerns.   With regard to recent correspondence received by our office, we wish to provide additional information which may serve to clarify timelines and steps taken.  ...

Important background information: Employee Incentive Plans, Inc (“EIP”) is a third party administration and recordkeeping firm specializing in retirement plans qualified under the Employee Retirement Income Securities Act of 1974 (“ERISA”).  Periodically, participants who maintain retirement accounts through a client retirement plan (e.g. 401(k) profit sharing plan, ESOP, etc.) undergo a distributable event whereby the Department of Labor allows participant accounts balances to be paid out of the applicable retirement plan.  Until a distributable event occurs, the Department of Labor does not allow distributions from the plan.  Furthermore and in general, a retirement plan provider may not process a distribution until authorized to do so by the Plan Sponsor (i.e. Employer).   In the correspondence referenced above, said consumer stated the original request for distribution was requested on May 22, 2016.  According to the Plan Sponsor, the participant did not terminate employment, and thus reach a distributable event, until May 31, 2016.  Our office received the request for distribution (dated June 1, 2016 by the consumer) on June 7, 2016.  Immediately, the Authorization Request was sent to the Plan Sponsor for approval, and the authorization approval was received by EIP on June 8, 2016.   In the meantime, the consumer’s retirement plan required, by law, a Benefit Election Option signed and notarized by the consumer’s spouse, which was timely communicated to the consumer.  Spousal signature and applicable notary public seal (dated June 20, 2016) was received by our office June 21, 2016.   Once the required paperwork was received in good order, the “sell” transactions were processed on June 23, 2016.  Once the sell transactions settled (which generally requires three business days for most New York Stock Exchange transactions), the check was issued – process date of June 27, 2016.   Commonly, participants who request distributions from retirement plans may receive additional employer-funded contributions into the retirement plan resulting in a balance due.  Procedures are taken on a quarterly basis to review for participant balances due.  In this instance, the consumer contacted our firm before a quarter had elapsed requesting the payout of his balance due.  Fortunately, our procedures do not require participants to go through the approval process once again if received within a 180-day window.  Therefore, the distribution process was completed and check processed on July 29, 2016.   It has been and will continue to be our goal to provide service well in excess of client expectations.  Unfortunately, laws, rules and regulations from time to time cause confusion and concern for individuals that do not have an active understanding of Department of Labor requirements.  We strongly feel this issue is a prime example.   Respectfully Submitted,   Employee Incentive Plans, Inc

Hello,   Again, we appreciate this feedback, however we must also stress the importance of the particular facts in this case.   From the time the final contribution was made until the distribution was processed, the investment itself grew by 5.5%.  We did not assess a distribution charge, asset fee or other provider-related expense on the amount for the period in question.   As allowable under the participant and custodial agreement between the Plan Sponsor, participant and custodian, the regulations allow participants to be “made whole” for any damages suffered.  In this case, the “damages” would have amounted to a negative $57.72 (-$57.72).  In other words, the custodian is well within its rights to request the $57.72 to be returned by the participant.  Given the custodian has chosen not to do so, we are unsure exactly what remedy the consumer is requesting.   Sincerely,   Employee Incentive Plans, Inc