Press Release
Plan Consultant, Are You Practicing Law? North Carolina Bar Says Yes
Revised and updated December 19, 2002
American Society of Pension Actuaries (ASPA) is reporting that the North Carolina State Bar last month sent letters to two firms with ASPA members asserting that many of the retirement plan services provided by the firms constitute the unauthorized practice of law. The firms implicated were a large financial institution as well as a smaller plan administration firm. Specifically, the letters request that the firms "refrain from any future unauthorized practice of law in North Carolina, including:
- advising, counseling, or recommending to any entity that a particular profit-sharing, deferred compensation, pension, or other retirement plan is appropriate to that entity's particular circumstances or that it should adopt and implement such a plan; or
- preparing, drawing, drafting, amending, restating, or aiding in such processes of any documents necessary to implement such a plan."
According to Brian H. Graff, Esq., ASPA’s Executive Director, "The breadth of this restriction would practically necessitate the involvement of a lawyer whenever a business is considering the adoption of a retirement plan, no matter how straightforward the plan. In many cases, this would likely add thousands of dollars in unnecessary administrative costs potentially discouraging the adoption of small business retirement plans. ASPA members both residing in and outside the State of North Carolina and the firms they work for help thousands of businesses in North Carolina provide retirement benefits for their employees. The longstanding business practices of all of these members and their firms would be dramatically affected if the Committee's current position were upheld."
"There is potential great harm to widely accepted practices regarding the qualified plan process if the North Carolina State Bar brushes such a broad stroke against work on retirement plans," said Lisa J. Bleier, Senior Trust Counsel, American Bankers Association.
The Authorized Practice Committee of the North Carolina State Bar is scheduled to have a hearing in January to further consider the issues raised. ASPA is concerned that if the Committee's position is ultimately upheld, these views may spread to other states. If the Committee continues to maintain its current position subsequent to this hearing, the issue will go to a committee of the full Bar, and then potentially to the North Carolina State courts for examination.
Click here for the complete amicus memorandum.
Click here for complete comments of the American Bankers Association in this issue.
Rick Meigs, Publisher, 401khelpcenter.com, LLC
