AAPA cheat sheet

Document the who/what/when/why of every client instruction: date, channel, decision, and the data on which it relied.

Fee disclosure must be written, plain-language, and delivered before or at engagement; oral explanations require written follow-up.

A conflict-of-interest disclosure states the nature of the conflict, the affected parties, and the mitigation or consent step taken.

Retain records per the stricter of firm policy or regulator rule; ERISA-related records generally run six years from filing.

Engagement scope documents list services included, services excluded, compensation basis, and termination terms.

Client risk-tolerance and time-horizon answers belong in the file before any recommendation, not reconstructed afterward.

Corrections to a client record require a dated addendum; never overwrite or delete the original entry.

Meeting notes should separate client-stated facts from adviser interpretation so the record distinguishes the two.

Match formula: employer contribution = match rate × lesser of deferral percentage or the capped percentage of compensation.

Safe harbor basic match: 100% on the first 3% of pay plus 50% on the next 2%; safe harbor nonelective: 3% of pay to all eligible.

ADP test compares HCE average deferral percentage to NHCE average; the HCE result may not exceed the greater of 125% of NHCE or NHCE + 2 percentage points.

Top-heavy minimum is generally 3% of compensation for non-key employees when key employees hold more than 60% of plan balances.

Vesting schedules: 3-year cliff or 2-to-6-year graded for employer nonelective contributions; safe harbor contributions are 100% vested.

Compensation definitions drive every limit and test; confirm whether the plan uses total comp, W-2 wages, or a plan-specific subset.

Deferral limits are per person across all plans of one employer, while the annual additions limit is per unrelated employer.

Payroll-deduction and bonus structures change deferral timing; election changes take effect per plan document terms, not retroactively.

Contribution limits and testing thresholds are indexed annually; apply the limit in effect for the tax year of the contribution.

Form 5500 filing is due the last day of the seventh month after plan year end; extensions add 2.5 months via Form 5558.

Late deferral deposits create a prohibited transaction; correction uses lost earnings and Form 5330 excise tax on the prohibited transaction amount.

Required minimum distributions begin April 1 of the year after the later of retirement or the applicable age threshold.

ERISA fiduciary duties: loyalty, prudence, diversification, plan-document compliance, and reasonable fees.

Prohibited transactions include self-dealing, conflicts of interest, and certain party-in-interest service arrangements absent an exemption.

Participant fee disclosures use the 404a-5 format; plan-level disclosures use 408(b)(2) service-provider format.

A plan document must be amended for law changes within the remedial amendment period; operational compliance precedes the amendment.

Eligibility tracking: apply age and service conditions as written, including breaks-in-service and rehire rules.

Loan administration: confirm amortization schedule, repayment frequency, maximum amount, and default cure window against the plan document.

Reconciliation control: compare payroll deferral totals, recordkeeper deposits, and trust statement activity each pay period.

Distribution processing checklist: eligibility event, spousal consent if required, tax withholding election, and Form 1099-R coding.

QDR0 (qualified default investment) applies to participants with no investment election; confirm notice and mapping rules.

Blackout notices are generally required at least 30 days before a blackout period affecting participant-directed investments.

Beneficiary records must be reviewed after life events; a valid prior designation controls absent a later valid one.

Error correction follows a documented sequence: identify, quantify, correct, notify, and document the root-cause fix.