Self Employed Pension Plans to Consider after APS Receivership
Investors are looking for self employed pension plans after fraud charges were raised against American Pension Services, Inc., a company that claims to offer self directed IRA solutions.
American Pension Services and its founder, Curtis L. DeYoung have lost investors over $22 million in fraudulent transactions and then attempted to cover it up with false account statements. In April 2014, APS was placed under receivership, following a request by the SEC to freeze all its assets.
Over the years, APS had repeatedly advertised its pension services with self-directed options. However, funds from clients’ so-called self directed IRA were all kept in two master trust accounts. APS and Mr. DeYoung still have control over these accounts and started to make investments without consulting the plan holders. This is not supposed to happen with a true self-directed retirement account.
So are there true self employed pension plans for people who want to protect their savings from such frauds? The truth is, self-directed retirement plans have always been available, but are often confused with falsely advertised plans as in the case of APS.
Solutions for Self Employed Pension Plans
Investors are recommended to set up a self-directed IRA LLC instead, which offers true self-directed feature with checkbook control. The custodian of an IRA LLC will merely set up a Special Purpose LLC, and transfer all the funds into the LLC bank account. Plan holder is the one who set up this bank account, and will be the only one who can access and manage the funds. Thus, even with a custodian, owners of self-directed IRA LLC account still retain total control over their retirement savings. This prevents any third-party to access or misuse the funds.
Setting up an IRA LLC is not the only option either. In fact, there is an even better solution for self employed business owners and independent contractors. For this group, a Solo 401 k plan presents a much better self-directed control. Unlike an IRA, where a qualified custodian is mandatory, a Solo 401k or individual 401k allows account holders to manage their retirement funds on their own. There is no need to have a custodian, not even a passive one as in the case of IRA LLC, to watch over the account. With this, the plan holders are truly the decision maker and the only one who can direct their money.
Choosing self employed pension plans or retirement plans can be a crucial decision, which can decide whether investors will grow their wealth effectively or will lose their hard-earned money just over night. To ensure true self-directed control over retirement plans, investors are recommended to choose an IRA LLC or Solo 401k that allows no one else but the account holder to access and control the money.