Participant is a salaried employee whose regular work schedule is 35 hours per week. The person is paid for 35 hours per week, with no overtime.

Participant terminated on June 14th. Hours at 35 x weeks is under the 1,000 for vesting. If equivalency has to be used, at 45 hours per week, person has 1,000 hours.

Since hours are not actually tracked, is it required to use equivalency?

Plan uses standard definitions:

(1): The term Hour of Service means (1) each hour for which an Employee is paid, or entitled to payment, for the performance of duties for the Employer or an Affiliated Employer

(2): Use of Equivalencies. Notwithstanding paragraph (a), the Administrator may elect for all Employees or for one or more different classifications of Employees

Thanks for your help with this.

A participant wants to retire and enter pay status with an annuity. Then, come right back to work part time for the employer in two weeks. He is 68. The Plan does not allow for in-service withdrawals, except RMDs. I know the IRS has said you cannot simply quit to enter pay status and come right back to work. Does anyone have any IRS guidance on this?

I've just gotten hold of some internal IRS guidance on the application of vesting requirements to plans governed by section 411(e)(2). While the guidance was primarily directed toward governmental plans, it indicates that it would also be applicable to church plans. For anyone who is interested, I've put a copy up at this link.

We've had some discussion here in the past regarding what vesting requirements applied to qualified governmental plans. The confusion arises because Code section 411(e)(2) says that governmental plans are required to comply with pre-ERISA section 401(a)(4) and (7), but Code section 401(a)(5)(G) says that 401(a)(4) does not apply to a governmental plan.

I've now gotten a copy of an internal IRS directive on the subject, and have posted a copy of it at this link. Essentially, it is applying pre-ERISA section 401(a)(4) to the vesting standards of governmental plans, notwithstanding section 401(a)(5)(G). My analysis of the guidance can be found at this link.

Are government plans (federal and non-federal) subject to the uniform coverage rule or is they exempt from this under ERISA? I have a broker telling me that govt plans can get out from under uniform coverage because of ERISA, I don't agree. I've read several of the posts on the website, but don't see anything, but I could have missed this. Your help is much appreciated.

Question about whether or not a plan is eligible for a VCP filing. (Takeover plan, of course).

• 401(k) Plan was established effective 1/1/2003.
• The original plan document was NEVER SIGNED and no required amendments have been done since the plan was first established. The partner that was supposed to sign the document is long gone so there is no chance of getting his signature on any documents.
• The plan has always had less than 20 participants.
• The employer handled the administration of the plan on their own.

Questions:

• Can we do a VCP filing for this plan to bring the plan document up to date? I am concerned that since the plan document was never signed it may not even be eligible for a VCP filing.
• If we can file under VCP would the user fee be $750? This assumes the plan document issue is the only problem.

Thanks in advance for any thoughts.

Because I administer just a few plans, I use IFile with Sungard Relius and use the "actuary signs" option. I note that system will not generate xml file if attachments are a completion of SR templates. It will generate xml if attachments are pdf add-ons. Before I contact the vendor,

Is anyone else experiencing this issue? If so, please indicate if you have a fix.

If you don't use IFile, would appreciate anyone just attempting to generate an xml where you've use the SR template (e.g., for retirement age) rather than adding a pdf. Even if you could try with an existing filing where you don't use IFile, your efforts will be appreciated.

Thank you.

andy t.a.

Because I administer just a few plans, I use IFile with Sungard Relius and use the "actuary signs" option. I note that system will not generate xml file if attachments are a completion of SR templates. It will generate xml if attachments are pdf add-ons. Before I contact the vendor,

Is anyone else experiencing this issue? If so, please indicate if you have a fix.

If you don't use IFile, would appreciate anyone just attempting to generate an xml where you've use the SR template (e.g., for retirement age) rather than adding a pdf. Even if you could try with an existing filing where you don't use IFile, your efforts will be appreciated.

Thank you.

andy t.a.

I know that you can apply statutory exclusions when giving the Safe Harbor contribution, provided your eligibility is less than 21/1. In relation to that topic, can a plan have immediate eligibility for 401k but a one year requirement for safe harbor?

Or would they both need to be immediate, but then the company could apply the stat exclusion for safe harbor?

Calendar year plan was frozen 12/31/08. Participant terminates employment 4/30/13. Does participant's compensation earned after the freeze date get considered in the 415 compensation limit? Thanks.

I have a takeover plan where many years ago a failed ADP test was semi-corrected. The TPA issued 1099s for the corrective distribution amounts and the HCE's paid their taxes however, the assets were never physically removed from the trust.

The old TPA's solution for the years since the failure was to just reduce the trust assets on the 5500 by corrective distribution amounts. We discovered all this when reconciling the trust for 2012.

Objectively, I look at this and think "VCP - one to one correction", but it's a rather large sum of money so the prospect of a one to one correction under VCP is not desirable. Is there any chance the IRS has ever viewed taxation of corrective distributions as sufficient correction?

An ESOP is being terminated and assets being distibuted 50% in 2013 and 50% in 2014. Does the termination of the plan constitute a termination of employment? If yes, must a pp in the ESOP who will be 70 1/2 this year, must an RMD be taken from the ESOP before the distribution is rolled over to an IRA?

Amazingly, after over one year, my ex's employer and health insurance provider, have agreed to implement the QMCSO! I was repeatedly denied by both the employer (who kept pushing it off to the insurance carrier - Isn't it their responsibility to ensure the Order is followed?) and the insurance carrier (who claimed they COULDN'T follow the Order and did NOT have to follow the Order).

I provided the employer and the insurance company with a listing of claims that I did not receive reimbursement; they, in turn, have had the insurer send me a listing of all claims paid to my ex in which the checks were cashed by the ex, and want me to indicate what claims I was not reimbursed by anyone. Is there a reason they are doing this? I provided them a list. Insurer has indicated they will go after the ex for a refund of those items I identify.

Insurance company now indicates their legal department agrees they have to follow the QMCS - last year I was told their legal department indicated they did not have to comply and that I should take my ex to small claims court (among other "recommendations..)

Yesterday I received two checks - the claims were not on the list I provided and the reimbursement is now a higher amount! (I have no idea how they balance their books.)

Why are they asking me to review a listing of reimbursements?

Just in case you have not seen this, IRS Notice 2013-49, http://www.irs.gov/pub/irs-drop/n-13-49.pdf.

(Sorry, have not seen the tables posted in spreadsheet format yet.)

Leaving aside nondiscrimination testing issues, can an employer provide its CEO (and only its CEO) with a medical expense reimbursement plan that reimburses deductibles, copays, etc. under the employer's self-insured health plan? That is, will the reimbursement plan be "integrated" with the employer's health plan such that it is not subject to the ACA's restriction on annual limits even though only one individual can receive the benefit?

Under a DB/DC combo plan

Only 2 of the HCs are covered under the DB Plan

to pass cover, the employer would need to cover 15 NHCEs.

Can the employer just pick the 15 to cover?

Plan will be amended to show the names of HNCEs to cover

Is there any discrimination issue with picking 15 participants?

Plan's definition of post-severance compensation counts compensation paid for unused vacation paid after termination of employment. Assume ee' terminated on June 10th and worked 950 hours. She is paid for 60 hours of unused vacation. Does she have 1,000 hours for vesting that year?

(I think hours stop at termination of employment even if compensation does not. But I don't know - just my interpretation, What do others think or know?

Thanks for any opinions (or answers).

Craig Schiller

We know that there are limited amendments that can be made mid-plan year. Any thought on this situation?

Safe Harbor, with the "maybe" 3% nonelective contribution.

Profit Sharing allocation conditions require last day employment.

The Safe Harbor Notice is given 30 days before the beginning of the next plan year stating the Employer "might" contribute the 3% safe harbor.

A follow-up notice is given 30 days before the plan year end stating no safe harbor.

Question - could the Employer amend the Profit Sharing allocation formula before the end of the plan year?

Have a plan that was a controlled group because the owner owned 100% of two similar firms. He is selling one of them completely and will have no interest any longer. What do I do with this Plan now. The other employer would like to maintain the Plan. Because they are similar firms, both rehabs, can we have a Multiple Employer Plan and have one firm be the sponsoring firm? Or is this a Spin off situation. I basically need ABC instructions on what to do Plan Doc wise and best way to approach.

Thank You.

Hello,

The sponsor of a 401k safe harbor was purchased via a stock sale. The participating employer was not purchased. There is no longer common ownership between the new sponsor and the participating employer. The purchaser wants the participating employer to stop participating immediately. It is not cost effective for the participating employer to create its own plan (but may be necessary).

Question: I know safe harbor plans can be terminated for cause if the employer is involved in a merger, acquisition, change of controlled group... However, the plan is not being terminated immediately, the participating employer is terminating participation immediately and they don't want to start a new plan. I am thinking that they would have to set up their own plan, and then terminate it. Otherwise no distributable event exists?? Any other thoughts?

Thank you