MCB Accounting Blog

Join MCB at the Fairfax County Chamber GovCon Symposium - February 7, 2012


Never before has our country seen such an uncertain economic and budgetary environment. Government contractors that stand on the front lines providing services for the world's largest buyer  the U.S. federal government  are poised to be among the most affected by our country's budgetary distress.

Yet, today's fiscal crisis does not spell doom for the industry. These headwinds make this a more important time than ever for contractors and the government to collaborate and find new and better ways to drive innovation. 

MCB will be an Exhibitor at the event.  Please join us and the Chamber for a half day symposium to learn from the brightest leaders and explore how the government contracting industry can seize new opportunities to weather the storm.


MCB has been serving government contractors, venture capitalists and small business investment companies for over 50 years with their business, tax, accounting and compliance needs. Contact an MCB Tax Adviser for your tax and accounting needs at 703 218.3600 or at info@mcb-cpa.com.


Comments Comments (0) | Print Print | Send Send | 26 Views | Bookmark and Share

Fee Disclosure Deadline for 401K Plan Sponsors Extended to July 1, 2012

The U.S. Department of Labor's (DOL) Employee Benefits Security Administration (EBSA) enacted two new regulations that are intended to reduce costs and assign fiduciary responsibilities in 401k plans.  These new regulations were originally scheduled to become effective July 2011 and then were extended to April 1, 2012.  The DOL just released another extension for compliance of 401k plan sponsors to July 1, 2012.  

The EBSA amended the effective date of Service Provider Fee Disclosure Requirements under Employee Retirement Income Security Act (ERISA) § 408(b)(2) to July 1, 2012. This is the regulation that requires all plan providers who receive compensation greater than $1,000 to provide reports to the plan sponsor indicating the amount of compensation, the services provided and whether or not the provider is serving as a plan fiduciary.

Covered service providers include the following:
  • Persons who provide services as an ERISA fiduciary or under the Investment Advisors Act of 1940;
  • Persons who provide certain recordkeeping or brokerage services and make available investment options to be offered by the plan; and
  • Persons who receive or may receive indirect compensation for the following services: accounting, auditing, actuarial, appraisal, banking, consulting, custodial, insurance, investment advisory (plan or participants), legal, recordkeeping, brokerage, TPA, or valuation. 
Covered service providers not in compliance as of July 1, 2012 will be in violation of ERISA's prohibited transaction rules and subject to penalties under the Internal Revenue Code.

Direct compensation is compensation received directly from the covered plan. Indirect compensation generally is compensation received from any source other than the plan sponsor, the covered service provider, an affiliate, or subcontractor. Therefore if the plan accounting, audit, recordkeeping or other services are paid directly by the plan, plan sponsor, the covered service provider, an affiliate, or subcontractor, then the disclosure requirements of 408(b)(2) would not apply to the service provider.

EBSA also announced that in the near future it intends to publish for public comment a separate proposal that would require service providers, in addition to providing the required fee and investment expense information, to furnish a guide or similar tool to assist plan fiduciaries in identifying and locating the potentially complex information that must be disclosed and which may be located in multiple documents.

The effective date of the final rule works in conjunction with the compliance date of EBSA's participant-level disclosure regulation at 29 CFR § 2550.404a-5 which requires plan administrators to provide participants in participant-directed individual account plans information about plan and investment costs. Plan administrators for calendar year plans now must make the initial annual disclosure of "plan-level" and "investment-level" information (including associated fees and expenses) to participants no later than August 30, 2012, and the first quarterly statement (for fees incurred July through September) must be furnished no later than November 14, 2012. 

Click here to view the DOL's sample 401K Plan Fee Disclosure Form that organizations may use for compliance with these new regulations.   If you have questions or concerns regarding 401K plan fee disclosure of fiduciary requirements, please contact MCB Employee Benefit Plan Practice Leader, Greg Askey at 703.218.3600.  MCB is a member of the AICPA Employee Benefit Plan Audit Quality Control Center.




Comments Comments (0) | Print Print | Send Send | 52 Views | Bookmark and Share

President Elevates SBA Chief, Proposes Changes

President Obama has announced that he is elevating the head of the U.S. Small Business Administration, Karen Mills, to a Cabinet-level position.  The move was greeted with applause by small-business owners present at the White House for the announcement. According to Mr. Obama, the purpose of the move was to ensure that "small-business owners have their own seat at the table."

Mills is credited  with reducing lender paperwork for SBA-backed loans, enforcing stricter oversight of government contracting and rolling out several laws that facilitated more lending to small businesses.  Other administrations have elevated people to cabinet-level status, which is mostly a symbolic way of saying they and their subject areas are considered important.

The announcement accompanied a broader proposal to combine the SBA with five other government offices to become a single, streamlined agency.  The proposal would merge the Department of Commerce's core business functions with the Small Business Administration, the Office of the U.S. Trade Representative, the Export-Import Bank, the Overseas Private Investment Corporation, and the Trade and Development Agency. The new agency would replace the Department of Commerce.

Under the broader plan, the SBA administration would no longer be in the Cabinet following the reorganization.

Closely held businesses are the backbone of MCB's success.   We understand the pressures you face today.  We work together with our clients as accounting, business, and tax advisers to navigate the current economic difficulties.  Contact an MCB adviser for your tax and accounting needs at info@mcb-cpa.com or 703.218.3600 to start building a relationship with a CPA firm who strives to earn your RESPECT and CONFIDENCE as a TRUSTED business adviser.

 

Comments Comments (0) | Print Print | Send Send | 24 Views | Bookmark and Share