The 8/10 issue of Forbes had two articles benefit planners and their clients might profit from.

The first article, Keogh Panic (click), detailed the importance of documentation and the penalties the IRS has available to impose.

The second article, The Price of Simplicity (click), compared the price paid in choosing a "simple" plan v. a more complex but more controllable and liberal plan.

The URL is www.forbes.com


[This message has been edited by Dave Baker (edited 08-20-98).]

Thanks for the note, Bob. I'll check that article out. Recently I did a comparison for a small employer on the various options available to them... it will be interesting to see how closely we agree

Peg

One of the traps many small business firms fall into is looking at the initial charge for setting up a plan. The qualified retirement plan is intended to be in existence for a long time and should accumulate a large amount of assets. A prudent owner should spend some money up front, analyzing her/his options, including the manner in which benefits can be distributed at a later date, BEFORE making any decision based solely on the initial administrative costs.

I say this in spite of the fact that a lot of our firm's income comes from helping small business owners clean up the messes in which they became enmeshed when they went to prototype or canned plans.

We've also found that "straightening out messes" is something we get involved with when clients rush into canned plan that someone pushed on them. It is important that options be considered carefully up front, with realistic expectations of the costs to run the plan.

The real fun occurs when a new client comes in that has a plan and we ask to see the plan document. It's amazing how difficult that seemingly simple request is for many of those clients to handle.