Does anyone know if I am allowed to invest in a Roth IRA while on disability (private LTD insurance + social security insurance) or invest in any kind of tax advantaged retirement plan?

Thanks.

We have a safe harbor plan using the basic safe harbor match formula. Plan is top heavy.

The plan is considering amending for 2013 to allow the discretionary non-elective contribution to be allocated putting each employee into their own class.

Assume Participant A defers 5% and receives a 4% safe harbor match.

Assume Participant B does not defer.

Participants A and B are NHCEs. Each meet the allocation requirements for the non-elective contribution, and assume the employer wants to give $0 to each in the non-elective allocation.

Since the plan is top heavy, each must receive a top heavy minimum.

Am I correct in that:

Participant A's top heavy minimum is satisfied with the 4% safe harbor match, does not benefit under the non-elective, and thus is not eligible to receive the gateway?

Participant B must receive the 3% top heavy minimum and thus must also receive the gateway?

If that is the case, then I am assuming the employer could opt to provide $0 non-elective to any participant who receives at least 3% match, and would not need to provide additional gateway, assuming coverage and non-discrimination passes?

Thank you for your assistance.

I read that Potrezibie Consulting claimed they are a leading force behind the reemergence of defined benefit plans across the country.

I wondered which country?

Is it possible for an individual to participate in both a governmental 457(b) and a non-qualified deferred compensation plan of a private employer? Can an individual contribute the maximum annual deferral to the gov't 457(b) and for example $20,000 to the non-qualified deferred compensation plan?

I'm posting this in the multiemployer section because I'm not sure anyone else would have any idea what I'm talking about.

A Taft-Hartley defined benefit plan changed its accrual formula in 2009 to provide that a certain portion of each hourly contribution rate would be "outside" the accrual formula. In other words, for each $1 in contributions, only $.75 would actually earn the member a benefit. The extra $.25 would support the funding of the plan.

This rule was properly put into place for those working under the primary collective bargaining agreement. However, the reciprocal monies received on behalf of those employees who were working out of the area was applied on a dollar for dollar basis.

The group is now trying to figure out how to address the situation. Arguably, the plan could be read to be silent on the reciprocal money. Therefore, the easiest path would be to adopt a clarifying amendment, send notice and deal with the issue prospectively. Others would like to go back to 2009 and retroactively change the allocation formula. This seems like it would invite a host of headaches as some folks have already retired, benefit statements have been mailed and 5500's filed.

Suggestions?

A company is considering terminating a Cafeteria Plan a the end of the year because "participation is low". Despite the obvious fact that more should be done to communicate the plan because it is such a great benefit to the ee's and employer let's say they decide to go through with it. Election frustration and pain over the new $2500 max is driving this one so there is not much I can do to alleviate the insanity at the moment.

Is it as simple as amending the plan document, communicating it to the employees, making sure a 5500 is filed (if required in this case), and distributing any left over funds? What are the ramifications if their new plan year begins 1/1? They are certainly outside the 60 day guideline for communications of this type.

I am completing the PBGC Schedule 501 for a Defined Benefit plan that has terminated. During the distribution process, we performed a diligent search for 19 missing participants whose lump sums were less than $5,000 and then automatically rolled over the money to Millennium Trust, providing them with the participant information, etc. Do I answer "No" to question 5 on Form 501 ("Were you able to locate all participants and beneficiaries?") If so, would I need to complete a Schedule MP for them? I don't know how I would do that, as the Schedule MP seems to assume that you either purchased annuities or are transferring the money to the PBGC.

Any help would be appreciated.

Thanks!

Plan A is safe harbor 401k with a match ( 100% vested safe harbor match).

Plan B is 401k non safe harbor with a match subject to vesting schedule

Plan A is going to merge into Plan B ( Employer B acquired Employer A).

Do the participants in Plan A have to maintain 100% vesting on all future match contributions to Plan B? Does the merger mean it is an amendment to the vesting schedule? OR can the Plan A safe harbor match contributions merge into their own source in Plan B ( remain 100% vested) and then the match for all participants ( Plan A and Plan B merged together) be subject to a vesting schedule?

Has anyone ever heard of first filing a late 5500 thru DFVC and then going back to the DOL to ask that the penalty be refunded if we can demonstrate reasonable cause for the late filing?

5500s were timely extended to 10/15; however due to some technical problems, 5500 was not filed until several days after the 15th.

Without considering a reasonable cause letter, we filed thru DFVC. (Small plan)

Thanks!

Hello all,

I have a strange situation wherein there was a master trust with a few different plans participating. However, all of the plans but one have pulled their assets and are using a different trust.

1) Is the trust still considered a "Master Trust" event though there is now only one plan? I am assuming it is, since that is how it was set up.

2) If so, is the master trust still required to file it's own 5500?

3) If not, what would be deemed to be the "end" of the master trust? The date all of the other plan's assets left the master trust, or the end of the current year?

Thanks!

I just recieved a call from a sole prop solo DB prospect who is having a really good year (900k) and wants to max his 2012 deduction. Unfortunately, he already contributed 50k for 2012 in 2012 to a solo(k) plan. Because 50k is over 6% of pay, he would be limited to 31% of pay on a combined basis. I can't think of a legitimate way to get that money out in a manner that won't get him in trouble so he can open a DB plan and get the full DB maximum.

Besides the discussion of "is he going for a one year deduction or is it indefinite" which I already had with him, is there anyway to make this work. I'm lost.

Does anyone recall the regulation that discusses discontinuing all contributions in a defined contribution plan, and essentially the dangers of not 100% vesting all account balances? Are there any IRS Q&A's on this subject?

Thank you

2011 ADP test looks like it's going to fail so the plan is amended before year-end (let's say 12/21/11) to impose a limit for 2011 on the deferrals of two named HCEs (let's say $15,000) so as to pass the ADP test and not have to make corrective distributions to other HCE's who are either not 50 or had already put in their $22,000 for 2011.

1) Any problems with this?

2) If not, any time constraint on when the amendment needs to be adopted?

Company A sponsors a 401(k) plan with 10,000 employees.

Company A is selling off a piece of their business to another company.

This is an asset sale.

Company B sponsors their own 401(k) plan.

Company B is buying a small portion of the assets of Company A.

As part of this transaction, approximately 500 employees of Company A will terminate employment with Company A and be rehired with Company B the next day.

Option 1 - The 500 employees are sent a distribution form and they can do what ever they want with their 401(k) at Company A.

There are no protected benefits, no crediting of prior service, everyone is a new hire at Company B.

Option 2 - Is there an option 2? Can these 500 employees be spun out of the Company A 401(k) plan and be transferred as a plan-to-plan transfer and not be given the opportunity to take a distribution?

Please let me know your thoughts in as much detail as possible.

Thank you for your assistance.

In the case of a multiemployer plan where every participant is a collectively bargained EE or alumni, there is no need for the nondiscrimination testing. While DB plans are subject to the annual benefits limitation, I believed that an ER could theoretically contribute as much as the ER wants so long as it meets the minimum funding rules and recognizes that overfunding a DB plan may result in excise taxes on the excess contributions. I can't think of any rule that says the ER is limited in the amount it can contribute on behalf of the EE based on the EE's compensation when you're dealing with a DB plan like this... In other words, if the ER wants to pay $500 in wages, but contribute $1000 to the plan, as long as the EE's AB is limited to $500, there's no problem. I feel like there is something missing here...

Without getting into too much detail, we have a handful of employees who we have over withheld premiums for their health insurance. We would like to cease deductions until the deduction bucket is empty (meaning we have spent or applied their deductions to the premium amount due) and restart the deductions at a future date (2 to 4 weeks). Is this allowable, or are we better off refunding as a taxable distribution the over withheld amounts?

ok, inherited a target benefit that goes way way back, with an unconventioanl formula. they want to go safe harbor target, so I know enough I have to create a theoretical serve. But if someone could translate what the govt indicates into something I can understand it would greatly help. (e.g. so if the benefit through the new formula is $1000, and the interest rate is 7.5% and the person has 9 years to retirement then....

(The theoretical reserve for the first plan year following any plan year in which the plan failed to satisfy this safe harbor is also zero. However, if the plan was adopted and in effect on September 19, 1991, and met the qualification requirements for target benefit plans under prior law, it may be allowed to take into account years of service for years in which this safe harbor was not met. In this case, the theoretical reserve as of the determination date for the last year before the plan satisfies this safe harbor is the excess, if any, of the actuarial present value of the stated benefit the employee is projected to have at NRA over the actuarial present value of future employee contributions required through NRA.)

Can someone confirm if this is true? A 401(k) plan that also has company match allows hardship withdrawals from any money type provided that the participant is 100% vested. At my previous employer, we operated such that if the hardship amount was withdrawn entirely from the employer money source, then the 6 month deferral suspension does not need to be enforced and the participant is allowed to continue deferring.

I tried researching this and can't seem to find any guidance which has me second guessing the process at my old company. Any insight is greatly appreciated!

Plan Year: 5/1/11 -4/30/12

Eligibility: 21/ 1 YOS

Entry: quarterly

Employee DOH 9/6/10 DOB 8/6/80

Met eligibility: 9/5/11

Terminated: 10/21/11

Employee would have entered the plan 11/1/11, plan doc states that rehired employees who met eligibility but did not become a participant enters the plan on the later of 1) entry date on which they would have entered the plan or 2) the date of their reemployment, which was 4/30/11 (last day of plan year). My software is wanting to give this participant a SH non elective allocation based on compensation earned during the 2011 plan year, but I think that is erroneous. The plan excludes comp before the participant actually enters the plan. Thoughts would be appreciated.

A client is thinking about investing in "pink sheet" stocks, which as far as I can tell are certain over-the-counter stocks that don't have to file with the SEC. Other than the normal Fiduciary prudence rules, etc., etc., is there any regulatory prohibition against a plan investing in these? I don't believe there is, but I never heard of them until today...