ERISA-Bubs

Registered
 View profile
  • Content count

    127
  • Joined

  • Last visited

 See their activity

ERISA-Bubs last won the day on July 3 2013

ERISA-Bubs had the most liked content!

Community Reputation

7 Neutral

About ERISA-Bubs

  • Rank
    Registered User
  1. As I read it, the language has to do with what form of benefit the AP can choose with respect to the AP's separate interest. It is basically saying the AP can choose any form of benefit except the AP cannot choose a JSA and name her current spouse as the survivor. This shouldn't affect the Participant's separate interest in any way. Once the account has been divided between the AP and Participant, whatever form the AP chooses shouldn't have any affect on the Participant's account. So I guess the question is, can the Order limit AP's form of payment election options once the account has been divided?
  2. We received a separate interest Order for our Pension (Defined Benefit) plan that allows the Alternate Payee to elect any form of benefit available under the plan an applicable law except that "the Alternate Payee may not elect a joint and survivor annuity where her current spouse, at the time of election, is designated to be the surviving spouse." Have you seen this? Is there any issue with accepting the Order as a QDRO with this language that limits the Alternate Payee's distribution options?
  3. We have a few executives that want to max out their 401(k)'s as early as possible in 2017. This basically means they will be deferring 100% of their first 2 or 3 paychecks. The problem is, under our system 401(k) contributions are deducted first, and then we deduct for other things, such as health plan premiums. So once we take 100% of their paychecks to cover their 401(k) contribution, there is nothing left to fund the other deductions. Is there an easy way around this?
  4. We have an specified employee who made a subsequent change to his election. He changed his election to receive payment upon separation from service to receive payment 5 years following separation from service. Should we pay: 1) exactly 5 years following separation, since the 6 month delay will automatically be satisfied, or 2) 5 years + 6 months following separation, since the payment would have originally been paid 6 months after separation due to the specified employee delay? I'm inclined to go with 2, because the regulations state a subsequent change should "be deferred for a period of not less than five years from the date such payment would otherwise have been paid," and that date would have been 6 months following separation. Anyone agree/disagree?
  5. We were informed that a QDRO would be forthcoming on a Participant's account, so we put a lock on the account. Now the Participant is due to receive a required minimum distribution. Should we make the RMD even though the account is currently locked?
  6. We have a plan that allows certain employees to purchase equity interests in our company. Is that an ERISA plan? Would any of the following features make it an ERISA plan: Right of first refusal. Employee required to sell stock back to company upon separation from service. Employee required to sell stock back to company upon death. Thanks in advance for any help!
  7. Does anyone know of a good resource for how to apply the 409(p) test when the S-Corporation has subsidiaries and certain participants own stock in the subsidiaries? The guidance is clear that an option to purchase the stock of a related entity should be counted as synthetic equity. But what if the participant owns the stock outright, rather than an option to purchase the stock? Is that included in the test? If so, is all of the stock in the subsidiary included in the denominator when determining a nonallocation year? I don't necessarily need someone to answer these questions, but if anyone knows of a good 409(p) resource that includes guidance on these kind of questions (even if it costs money), I'd be incredibly grateful. Thanks everyone.
  8. I agree with JPOD's line of thinking. What if, instead of dropping the SROF on the last day of the plan year in which the bonus is earned, you drop the SROF on the first day of the plan year following the plan year in which the bonus is earned. That would buy you an extra year by just waiting one day.
  9. I posted this once before without luck. I'm hoping someone can help me on this because I appear to be stuck. The 409(p) regulations define "related entity" as: "any entity in which the S corporation holds an interest and which is a partnership, a trust, an eligible entity that is disregarded as an entity that is separate from its owner under § 301.7701-3 of this chapter, or a qualified subchapter S subsidiary under section 1361(b)(3)." Is a subsidiary of a subsidiary considered a "related entity"? For example, the S Corporation owns Subsidiary A and Subsidiary A owns Subsidiary B. Is Sub B a "related entity" to the S Corporation? I appreciate any help / thoughts / answers anyone can provide. Thank you!
  10. Our ESOP is maintained by the Holding Company and the ESOP has borrowed from the subsidiary directly under the Holding Company. We are restructuring to put a new entity between the holding company and the current subsidiary that is the lender to the ESOP. Is it OK for the same entity to continue to be lender (the sub of the sub of the Holding Company that maintains the ESOP)? Or should be get the loan transferred to the new subsidiary?
  11. Sorry, should have specified. It is a 457(b) top-hat plan for a nonprofit corporation.
  12. Our plan currently provides distributions will be made in the form determined by the Committee in one of the following forms: 1) lump sum 2) monthly or annual installments (not to exceed life expectancy) 3) monthly payments based on single life annuity, paid until the account is exhausted. 4) another option requested by participant and agreed by the committee. We want to change it so for people separating from service next year there are only two options: 1) lump sum 2) installments that are accelerated to lump sum upon death of the participant. Anyone who is retired or retired before next year still get the original (4) options above. Is this permissible?
  13. I know this post hasn't received a response yet, but I thought I'd try with a follow up. Is there any threshold to determine when an entity is a related entity? Say, for example, the S Corp only holds a 30% interest in an entity -- is it still related? The definition above doesn't require a percentage ownership, but I'd be surprised if the ESOP had to take into account equity earned in a subsidiary only .5% owned by the sponsoring S Corp.
  14. "Synthetic equity" for purposes of 409(p) testing includes equity compensation in a "related entity." The regs define "related entity" as: "any entity in which the S corporation holds an interest and which is a partnership, a trust, an eligible entity that is disregarded as an entity that is separate from its owner under § 301.7701-3 of this chapter, or a qualified subchapter S subsidiary under section 1361(b)(3)." Is a once-remove subsidiary considered a "related entity"? For example, the S Corporation owns Subsidiary A and Subsidiary A owns Subsidiary B. Is Sub B a related entity to the S Corporation? Second question -- the synthetic equity in a subsidiary is taken into account, "to the extent of the S Corporation's ownership." So if S Corporation is 70% owner of Sub A and Sub A is 70% owner of Sub B, then would we take into account 49% (70% of 70%) of the synthetic equity granted at the Sub B level?
  15. OK, so we should classify it as a non-catch-up contribution regardless of what happened in any other plans and give him match. Do you see any issues with waiting to the end of the year and re-classifying it then, or should we be matching every pay period and go back and fix earlier pay periods?