PLANADVISER - Summer 2023 - 38
Case Sensitive
The Question Stands
Must one tell all eligible workers if their employer offers a 403(b) plan?
CAN A RETIREMENT plan's sponsor and adviser be held
liable for not applying the universal applicability rule-i.e.,
Section 403(b)(12)(A)(ii) of the Internal Revenue Code-to a
non-Employee Retirement Income Security Act 403(b) plan?
The case that prompted this question, Robert Roton and
Jacqueline Juarez v. Peveto Financial Group LLC and Legacy Counseling
Center Inc., was dismissed with prejudice by agreement
of the parties, " with prejudice " meaning the court has
made its judgment and the plaintiffs may not refile their
claim. Claims against the plan sponsor were dismissed by
the court, though not initially against the adviser, which
could potentially face a reckoning with the IRS.
The Case
Robert Roton and Jacqueline Juarez, two employees of
Legacy Counseling Center Inc., a mental health and addiction
counseling service with offices in seven counties in the
Dallas area, alleged that they were unjustly excluded from
participating in Legacy's 403(b) defined contribution plan.
They argued that their exclusion violated the universal
applicability requirement for 403(b) plans and claimed they
lost $231,000 and $58,347, respectively, as a result.
The two sued Legacy, and the plan's financial adviser,
Peveto Financial Group. They alleged that they were never
informed of the plan's existence and should have been
allowed to participate if they chose to. The 403(b) plan sponsored
by Legacy is a non-ERISA plan.
The case raises important questions about the responsibilities
of an employer that sponsors an ERISA-exempt 403(b)
plan, as well as those of its adviser. First among those questions
is: Must a plan adviser inform all eligible employees of
a plan's existence and make enrollment available to them?
Unfortunately, this question remains unsettled since the
parties decided to dismiss the case.
The plaintiffs alleged, in a complaint brought this
past December, that the plan was offered only to higherpaid
employees and that the " rank-and-file " were never
permitted to participate or even told about the plan. They
said this violated the IRC's universal availability requirement.
The UAR essentially means that otherwise qualified
38 planadviser.com | Summer 2023 | Awards & Innovation
Art by Dan Page
http://www.planadviser.com
PLANADVISER - Summer 2023
Table of Contents for the Digital Edition of PLANADVISER - Summer 2023
Leadership in Practice
SECURE 2.0 Insecurities
The Need for NQDC Support
Advisers’ Huge Opportunity
Do 3(38)s Assume More Risk?
Match for Student Debtors
'The Question Stands
PLANADVISER - Summer 2023 - C1
PLANADVISER - Summer 2023 - C2
PLANADVISER - Summer 2023 - 1
PLANADVISER - Summer 2023 - 2
PLANADVISER - Summer 2023 - 3
PLANADVISER - Summer 2023 - 4
PLANADVISER - Summer 2023 - 5
PLANADVISER - Summer 2023 - 6
PLANADVISER - Summer 2023 - 7
PLANADVISER - Summer 2023 - 8
PLANADVISER - Summer 2023 - 9
PLANADVISER - Summer 2023 - 10
PLANADVISER - Summer 2023 - 11
PLANADVISER - Summer 2023 - 12
PLANADVISER - Summer 2023 - 13
PLANADVISER - Summer 2023 - 14
PLANADVISER - Summer 2023 - 15
PLANADVISER - Summer 2023 - Leadership in Practice
PLANADVISER - Summer 2023 - 17
PLANADVISER - Summer 2023 - 18
PLANADVISER - Summer 2023 - 19
PLANADVISER - Summer 2023 - 20
PLANADVISER - Summer 2023 - 21
PLANADVISER - Summer 2023 - 22
PLANADVISER - Summer 2023 - 23
PLANADVISER - Summer 2023 - 24
PLANADVISER - Summer 2023 - 25
PLANADVISER - Summer 2023 - 26
PLANADVISER - Summer 2023 - 27
PLANADVISER - Summer 2023 - SECURE 2.0 Insecurities
PLANADVISER - Summer 2023 - 29
PLANADVISER - Summer 2023 - 30
PLANADVISER - Summer 2023 - 31
PLANADVISER - Summer 2023 - The Need for NQDC Support
PLANADVISER - Summer 2023 - 33
PLANADVISER - Summer 2023 - Advisers’ Huge Opportunity
PLANADVISER - Summer 2023 - Do 3(38)s Assume More Risk?
PLANADVISER - Summer 2023 - Match for Student Debtors
PLANADVISER - Summer 2023 - 37
PLANADVISER - Summer 2023 - 'The Question Stands
PLANADVISER - Summer 2023 - 39
PLANADVISER - Summer 2023 - 40
PLANADVISER - Summer 2023 - C3
PLANADVISER - Summer 2023 - C4
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