Is Your Pension Money Protected From Creditors?


If you owe money to a credit card company, bank, or other creditor, can they attach your pension or 401(k) account? In other words, can they take what you owe them out of your pension account before you receive it?  In most cases, the answer is a definite "NO."  Pension plans covered by ERISA (the Federal pension law) must contain the "anti-assignment and alienation rule," which states that money in the plan is not available to creditors. Similarly, creditors of the employer sponsoring the plan cannot attach plan assets, which are held in a trust and are not part of the employer's assets.  

As usual, there are exceptions to the rule. For example, someone who commits fraud or a fiduciary breach that causes financial damage to the plan can have his or her account attached to repay the plan for the damage. Certain tax liens can be paid from plan assets. And pension assets can be considered part of the amounts to be split up during a divorce, using an agreement called a QDRO.


In a bankruptcy, pension assets are not considered as part of the "bankruptcy estate" to be split up among creditors. But the anti-assignment and alienation rule also means that you generally can't use your pension assets as collateral for a loan or other debt. And once the money is distributed from the plan, it is no longer protected.


Generally, retirement plans covered by ERISA afford broader protection than IRAs. State laws, rather than Federal laws, apply to the protection of the benefits in IRAs.


Overall, retirement plans can provide a very effective way to shield assets from creditors, as long as you're aware of the exceptions.





Math Tricks

If you ever have to multiply a number by 5 in your head, here's a shortcut: Multiply by 10, then divide by 2. For example, how much is 84 times 5? It's easy to multiply 84 times 10 and get 840, and then cut 840 in half and get 420.

In Memory of Jay Driver


On August 23, 2016, Preferred Pension Planning lost one of our brightest stars, Jay Driver. Jay tragically passed away on his way into the office that morning. Jay was 41 years old. Jay was not only a great pension consultant; he was a wonderful human being. He always had a huge smile on his face and brightened every room the moment he entered. Jay was a man who cared deeply about his family, friends, and co-workers. He deeply loved his wife, and adored his four children and his dog. He spoke lovingly of his parents, brother, and sister. While Jay always had a joke or funny comment, underneath there was truth and wisdom at all times.

Jay's knowledge of the pension field was tremendous. He achieved the highest professional designations in our field, and loved his work. Whenever anyone in the office had a tough technical question, Jay was the man to turn to, as he could analyze the situation and determine the best course of action.

Jay's antics kept us all amused. At work, Jay always had a story to tell at staff meetings that made us laugh at the same time we were learning. Jay was incredibly patient and loved to mentor his colleagues and our clients. At home, he loved to post entertaining videos on Facebook. He posted a video of himself in the shower singing Happy Anniversary to his wife. He posted a video of himself doing an imitation of Louis Armstrong singing "What a Wonderful World."

The world lost a compassionate and brilliant man this week. We are fortunate to have worked with Jay during the past 8 years. We will never forget the contributions Jay made to Preferred Pension Planning as a pension consultant, and how he made us all better human beings.

The Value of the CEFEX Certification


When you work with an organization that provides service to you, you want to make sure that the organization is not only technically competent, but that they also have procedures and safeguards to protect any information you provide them. You want to know that their employees are properly trained, that the organization is properly structured, and that procedures and safeguards are not only established, but followed. The American Society of Pension Professionals & Actuaries (ASPPA) & the Centre for Fiduciary Excellence (CEFEX) have put together a rigorous program to provide certification for retirement plan service providers. Retirement plan service providers may voluntarily submit to the certification process to provide assurance to their clients and other professionals that they have met the standards needed to obtain the certification.

We are pleased to announce that Preferred Pension Planning Corporation obtained our certification from CEFEX in May 2015, and completed our first annual recertification in May 2016.

Having this certification gives us an edge in a competitive industry where clients are discerning about who to trust. With an in-depth set of rules to follow, employees are motivated to be aware of their procedures and be rigorous in their documentation. By being transparent about our policies and procedures, we develop a relationship with our clients and their advisors as providing excellent service, a valuable reputation to have in an often tumultuous financial world.

The certification is comprised of four elements:

  • Organizational business structure

  • Formalized process and controls

  • Implementation

  • Monitoring procedures for continuous evaluation

The first section covers the organization and structure of a business and it goes beyond just verifying that the business is following the rules. This aspect delves into whether or not the company has a successful business plan, a competitive benefits plan for their employees, and that formal review sections are in place.

The second portion of the certification reviews the marketing sales practices of the company. It assesses whether the company is transparent with their clients, they are compliant with all fiduciary standards, and that they follow through with their plans discussed in the first portion of the review.

The third portion relies on how processes are implemented and that there is a sense of efficiency throughout the process. This section explores the administrative and recordkeeping practices to ensure that systems are easy to navigate, well-explained, and actualized by employees.

The last section is a periodic review to be sure that the company is meeting the client’s needs on a regular basis and staying in compliance with all of the previously examined areas.

The analysis is completed by an Accredited Investment Fiduciary Analyst with specific stipulations for their qualifications. The certification process heavily relies on a company’s documentation. The process is systematic, comprehensive, and covers many factors that are important when choosing a retirement plan provider.

The certification strives to deliver a sense of credibility and promotes a community that focuses on providing a service with impeccable structure and organization. It relies on employees monitoring their practices and reviewing their work to be sure they are meeting the certification standards. Companies who are meeting these criteria are seen as reliable, trustworthy, and are known for having high-quality procedures and practices.

When choosing a retirement plan professional, this certification should be a staple on your “pros” list!


Fiduciary Rule


The Department of Labor (DOL) has been working since 2010 on regulations that would impose a new set of fiduciary standards for those in the investment advisement industry (consultants, brokers, insurance agents) who provide retirement advice. Regulations for retirement advice had not been previously updated since 1975. Finances have changed dramatically since 1975, and the DOL recognized the need for an update. After six years of comments and public hearings, the new final fiduciary regulations were issued in April of 2016. Any recommendation to follow a particular course of action – for example, to buy, sell, or hold an investment, or whether to take a rollover from a plan and how to invest it -- becomes fiduciary advice that is subject to the new regulations if the person giving the recommendation is being paid to do so.

Some forms of communication are excluded from the fiduciary rule. These include general education or communications that a reasonable person would not view as investment advice, such as newsletters, speeches, research and news reports, or prospectuses and performance reports. Platform providers are allowed to market funds on their platform as long as it is not aimed at the individualized needs of any particular plan or participant, and it is specifically noted that it is not intended to be advice.

Fiduciary advisors will be deemed to have violated the "prohibited transactions" rules under ERISA if they receive compensation that varies depending on how a participant's account is invested. This rule is intended to eliminate the possibility that an advisor will steer investments into those that provide higher compensation. However, there are occasions when completely level compensation may not be possible. In those instances, an advisor can still be in compliance by following the terms of a complex rule known as the "Best Interest Contract Exemption," or "BICE."

There are several different types of best interest contract exemptions. In order to fully comply with the BICE, an advisor needs to issue a written statement disclosing his or her fiduciary status and adherence to the best interest standards. The advisor must disclose his or her compensation, provide transaction disclosures for each recommended investment, disclose any potential conflicts of interest, and provide a warranty that the advisor's firm has adopted compliance policies to mitigate any conflicts.

Most of the new fiduciary rules are required to be implemented no later than April 10, 2017. There is a phased implementation until January 1, 2018 for some of the rules under the BICE.

The new rules provide for a set of fiduciary standards that allows advisors to receive fair compensation for their services, but ensures that they maintain advice that is in the best interest of plan sponsors and participants. The overall goal is for Americans to receive competent, unbiased retirement advice at a reasonable price. However, the rules are extremely complex and may not be well understood by the average retirement plan participant.

Over the past few weeks, there have been at least five lawsuits challenging the validity of the regulations. The lawsuits allege that the regulations overstep the Department of Labor's authority, are unlawful, and create unwarranted compliance cost burdens and liabilities on advisors and retirement plan providers that will increase the cost of retirement advice, and undermine the interests of those saving for retirement.

It will be interesting to watch how the new rules and lawsuits develop over the next year.



June is Conference Month for PPPC!


Preferred Pension Planning Corporation is excited to announce we are exhibiting at various upcoming conferences in the area! We are preparing for events chock full of the latest and greatest industry news as well as informative games. Industry Leaders and CPAs from all over will be in attendance sharing insight and progress in abundance and we are ecstatic to take part in the action.  

We will be showcasing at the following local conferences:

The 2016 New Jersey Accounting, Business, and Technology Show & Conference Meadowlands Exposition Center located in Secaucus, NJ

Wed. & Thurs., May 18 & 19, 2016

We will be located at Booth #207.


2016 NJCPA Convention & Expo

Borgata Hotel, Atlantic City, NJ

Wed.-Fri., June 15-17, 2016

We will be located at Booth #210.


2016 Somerset County Business Partnership BizFest

The Imperia, 1714 Easton Ave., Somerset, NJ 08873

Thurs., June 16, 2016


Come out and support your pension experts while being exposed to many enthusiastic conference attendees ready to share their knowledge. We will have multiple giveaways including beach balls, note pads, candy, and more!

Welcome To Our New Site!


Preferred Pension Planning has upgraded our corporation’s website! We are excited to present to you our revamped branding!

We have been working diligently over the past few months to craft our new look, and we are proud to serve you with a more modern design. Our new custom site allows our clients to manage their plan easily and securely. Delivering a quality experience to our clients on our site is a priority for us, so we came up with a revised layout that is both easy to navigate and rather stylish, if we do say so ourselves!

You can find newly updated information on all of the types of defined benefit and defined contribution plans we design and administer for our clients. We now have a full News Page, where we will provide the latest news on PPPC happenings, pension information and plan changes, expert advice, and anything we think would benefit our clients. We are excited about this new feature because it helps us keep you well-informed. And we can’t forget about our new team photos!

You'll notice we have a new logo that looks like a sparkling diamond. We chose the diamond shape because it represents the best service you can get, and the sparkle lets you know that we'll take special care to make sure everything is done with some extra polish! We're redesigning our stationery, brochures, and business cards to include our new logo.

Let us know what you think about the changes we’ve made; we’re eager to hear your feedback! Please send an email to, or contact your pension administrator with your comments. Thanks!