Say a participant takes maximum loan of 50% of their vested balance. A few months later, they request an in-service withdrawal having met the plan's age 59 1/2 requirement. The investment provider is limiting the participant's withdrawal amount such that their remaining balance after the withdrawal is still equal to the remaining outstanding loan balance, stating the participant must maintain the collateral on the existing loan balance. We do not agree with this. The 50% limit should only apply the day the loan is originally requested. A participant should be able to take an in-service withdrawal assuming they have met the plan requirements in any amount that they want, regardless of their current loan balance. Does anyone agree/disagree?

Any thoughts on the following situation would be much appreciated. I'm getting a headache.

1/1/2009 participant takes out general purpose loan, term 5 years.

1/1/2010 participant refinances this loan as a principal residence loan, term 10 years.

5/1/2013 participant requests to refinance this loan again, for a new principal residence. Additional principal will be borrowed. The 10 year maturity date from the first refinance will be retained.

Some additional facts:

Vested account balance including all outstanding loan balances = $80,000

Outstanding loan balance immediately prior to new refinance request = $24,000

Highest outstanding balance in prior 12 months = $26,000

Is this new refinance permissible? I would be a lot more comfortable with it if the original loan hadn't been for a 5 year term.

Dog

Where can I find a 1982 Social Security Covered Compensation Table?

Thanks

Does anyone have a good write-up of what a temporary agency needs to be concerned with in order to comply with ACA? ACA seems to impact them in a wholly unusual manner. Have the "big boys" (Manpower, Kelly) come out with anything about what their intentions are?

If someone processes a request for distribution from their IRA a few days prior to turning age 59 1/2, does that mean there could be a 10% penalty or does the date of receipt of the funds mark the date if not received until after 59 1/2?

Hi all! The answer to this may be black and white and I apologize in advance if it has been asked before (I did my due diligence searching for the answer on here prior to posting)

Basic info: 1 HCE, 13 NHCEs, multiple contrib allocation groups all of which get a contribution (no zeros), last day employment requirement so all terminees didn't get an allocation

Plan passes ABPT but fails 410(b) ratio percentage at 60%. I understand that the plan can pass coverage with ABPT only, given "Reasonable Classification" was utilized in assigning allocation groups. Given the following excerpt, I would say it's okay to skip the 410(b), however one issue is not clear to me: Is giving a zero allocation to terminees due to the last day employment provision of the plan, not make a "Reasonable Classification" thus requiring us to pass the ratio test??

In a question posed in 2001 by the Joint Committee on Employee Benefits of the American Bar Association, the IRS was asked whether it would be acceptable to name each participant as a separate allocation group under a profit sharing plan and have the employer declare a separate discretionary contribution to each participant (with a view toward using cross-testing to prove the employer contribution is nondiscriminatory). The IRS noted that if a 0% allocation were to a participant, it might be interpreted as excluding a participant by name, in which case the plan would have to satisfy the ratio test for this to be acceptable. However for a plan that is relying on the ratio test to pass coverage, but is naming individuals as excluded from the plan, it is advisable to request a determination letter [...]

Thank you.

New variable hour employee changes employment status during their initial measurement period, to permanent full-time position. The proposed regulations require that they be "treated as a full time employee" by (a) the first day of the fourth month following the change in employment status or, if earlier and the employee has averaged at least 30 hours/week during the initial measurement period elapsed to date, (b) the first day of the first month following the end of the initial measurement period (including any optional administrative period associated with the initial measurement period).

The question is, does "treat as a full time employee" mean to offer immediate enrollment in coverage, or to apply a 90-day (or less) waiting period as applicable to other full-time employees?

I think that the (a) and (b) periods are meant to serve as the equivalent of waiting periods (i.e., no additional waiting period applies) but would be interested in comments on the meaning of "treat as a full-time employee" in this context.

If a plan is offering a service through a service provider that provides investment advice for a fee as allowed by ERISA section 408(b)(14) (as introduced by PPA to not make it a prohibited transaction), and the investment advice is offered for free to those participants over age 55, is it potentially discriminatory? The thrust of the question: is investment advice considered a "other right or feature" under 1.401(a)(4)-4(e)(3)?

There appears to be little guidance on the issue. If anyone has a thought or direction to point, please share.

Took over a first year cb plan (2012) where the interest credit is defined to be actual return on assets.

The resulting deduction limit is far less than the contribution credit since the IC is zero and the Plan does not have a floor other than IC cannot be zero.

Is there a way to increase the deduction limit equal to the contribution credit for 2012?

Tried at-risk but it's not enough. Plus, there's no prior service cost so I have no FT.

Any ideas?

DB plan with no hours requirement for entry but 1000 requirement for accrual.

So, those employees that have never had 1000 hours are still in testing population but aren't benefitting. I'm not passing a26.

Can I apply a26 to statutory group and OEE group separately? Since nobody in the OEE group is benefitting in the DB, would it matter?

Code says:

(B) The plan under which the otherwise excludable employees benefit satisfies section 401(a)(26), both by reference only to otherwise excludable employees and by reference only to employees who are not otherwise excludable.

I have no clue what that means.

Thanks.

I have a client that uses a 3% safe harbor non-elective contribution plus a discretionary profit sharing contribution. Last day of employment allocation condition applies to the discretionary p/s. P/S is pro rata based on comp. (Not cross tested/new comp allocation).

Is it correct that I must pass the general test since a terminated participant receiving the 3% safe harbor but not part of the profit sharing eliminates the "uniform allocation" forumla of the plan?

I think I heard this in class or in a webinar, but can't find my notes.

Thanks!

A national company sponsors a vision plan. In one rural location, there is no local vision plan provider (have to drive 30 miles away). The Company contacts the vision plan provider and gets them to add a local eye doc. Can the company now allow employees in that rural location to elect the vision plan with pre-tax $$$ without running afoul of the 1.125-4? In other words, do you think that this qualifies as a significant improvement to a benefit package option under 1.125-4(f)(3)(iii). Does the IRS answer calls on this?

An S Corp with 4 owners. 2 owners are looking to be bought out in the next 3-5 years. Additional options outside qualified retirement plans are being considered. Is there a nonqualified deferred compensation plan that would work in this scenario - possibly having remaining 2 owners pay the deferred compensation out of future earnings or fund it through life insurance? If so, can you please provide a general explanation of how this would work?

Thank you!

Outside of the Medicare Secondary Payer rules, are there any rules out there that would prevent a company from either (1) excluding employes from coverage if their spouse works for a company that offers them coverage, or (2) offering cash incentives to not take coverage with the employer and instead take it with spouse's employer?

I'm also aware of the pay or play effects (1) would have under ACA -- wondering if there is anything else in the universe to worry about.

Thanks for the help.

I have a multiemployer db plan that covers both collectively bargained and non-collectively bargained employees. One of the participating employers fails the ratio percentage test for its non-collectively bargained employees (for multiemployer plans, the test does not apply for collectively bargained employees). I have a couple of questions on this:

The testing has been done on an employer by employer basis for this plan. Can we aggregate all the employers together that cover non-collectively bargained employees and then test? The plan might pass on a plan wide basis.

It appears the employer may have failed this test for several years. If so, what is the proper correction procedure?

Any help would be appreciated.

One of my clients, a partnership, filed their tax return on 3/15 without the 2012 top heavy minimum contribution. I understand that for 2013, i'll need to include that in my annual additions testing and for the 25% company deduction.

My question is.....what is the due date for this deposit since the tax return has been file? Is there a penalty due since it wasn't made by the due date of the tax return?

Once upon a time I had heard that if a 401k plan has loans, it had to have a trust/trustee to "hold" the loans. Is this true? Or can any plan funded exclusively by insurance contracts claim exemption from the Trust Requirement?

I have a client who has been checking the box for the exemption for small pension plans under Reg. 2520.104-46 in order to waive the annual audit requirement. However, the client has not been providing the requisite information to the participants as called for by the regulation. Does that mean the exemption is blown and we would have to go back and audit for the past decade? Any insight would be appreciated.

I have noticed two things.

1) There are flex bene plans filing 5500s but only submitting the first two pages with no schedules, checking General Assets. Is this still required? I think not as per Notice 2002-24, but then why are they still being filed?

2) There are small flex bene plans filing 5500s checking Trust, with only Schedule I, showing account balances that are relatively small I think due to timing of payment of premiums. I am guessing this may be a checking account issue or whose name the checking account is in? Is there a way around this?