People say that there are no stupid questions. Apparently, those people never worked for my old third-party administration (TPA) firm. Here are the 5 stupidest questions I was asked while working as the Director of ERISA Legal Services for that TPA named later.
5. A 401(k) plan administrator asked why I thought it was inappropriate to reconcile a daily valued 401(k) plan on a quarterly basis.
4. Another 401(k) plan administrator asked me about the non-resident alien exclusion, where you can exclude non-resident aliens who receive no U.S. source income from the retirement plan without an effect on the Section 410(b) coverage test. The administrator then asked if that exclusion included Puerto Rico (of course Puerto Rico is a U.S. commonwealth). When I told him about Puerto Rico’s status and that they use dollars, he asked me if they use Puerto Rican dollars.
3. A client relationship manager (who visited the client and reviewed funds) asked me what’s the difference between an age 60 in-service distribution and an age 59 ½ in-service distribution. Of course, the answer I gave, six months.
2. That same client relationship manager was at a meeting with a potential client and their lobbyist. She said she was from Yonkers. The lobbyist said Yonkers was the second-largest city in New York State. She asked what was the largest city in New York State?
1. A salesman asked me whether with a new client that sponsored a 401(k) plan with a large illegal alien employee base, whether it was appropriate for illegal aliens to defer in the 401(k) plan with fake social security numbers. Yes, you read that right. Of course, I told him that even if it wasn’t illegal, it was still unlikely illegal aliens would defer money into a 401(k) plan based on their income and legal status.