It's been a long time since I determined a PBGC annuity factor at 120% and I can't remember if there was a setback on UP-1984 unisex. Can someone confirm that I'm on the right track? Using a rate of 4.75%, I get a factor of 11.1038 at 65 using a setback of 6.

Thanks

Small 401 offers a 5% non-elective 100% vested to all eligible participants. Can it still satisfy Safe Harbor requirements?

Cash Balance Plan cross tested with a DC plan. According to the plan document the accrued benefit will be reduced by the value of the vested portion of the account balance attributable to Employer contributions in the DC plan. The offset percentage is 1.25%.

The DC plan is providing a 3% safe harbor and a 4.5% profit sharing.

Not an actuary, just work for one. Never had an offset plan before. My boss doesn't know either.

Couple Questions:

1. When i do the valuation, what do i do with the 1.25%? If it's being provided in the DC plan then it wouldn't show up really for valuation purposes right?

2. When i do the 401(a)(4) testing - I'd just treat as DC money like it is right?

3. What about the 401(a)(26) test? Am i supposed to test to make sure that the 1.25% would satisfy the meaningful benefit formula requirement?

Thanks in advance for the help.

I have a client telling me that they have been assured by a vendor that even though ALL of the vendor's funds are available (hundreds of them) the employer does not have any fiduciary liability related to these funds, because it is not up to the employer which funds are offered. So even though fund ABC might be a dog, the employer/fiduciary does NOT have the ability to pull the fund.

Are there any articles on point about this? I tried to explain that it is a fiduciary train wreck, but need something to back me up.

There is a three owner Professional Association. Two of the owners bought out the third member mid-year (June). The PA will file two short taxable years. One from January through June. The other July through December.

The PA has a Calendar Year 3% Non-elective Safe Harbor with a discretionary profit sharing piece. How do these two entities allocate the deduction for employer contributions? Is it allocated as of the end of the plan year and thus only to the second taxable year? Is it pro-rated? Are the Safe Harbor and Discretionary contributions treated differently?

Thanks!

Hi,

I was hoping someone could help me out here. In my MSA it states the following:

The parties acknowledge that at the time of separation, the marital share of the account equaled $xx,xxxx.xx. The Wife shall be entitled to one-half (1/2) of the marital share plus any earnings or lossess on said share as of the date of separation on February 28, 2011. The Husband shall be the sole owner of any deposits to this account after February 28, 2011.

I have Fidelity for my 401k plan and they want a "Valuation Date" which I see (based on the above) as February 28, 2011. Then they want to know if the alternate payee is entitled to gains/losses. The way I read the above language it states that she is entitled to gains/losses as of February 28, 2011. The way Fideility states it is usually gains/losses are from the valuation date up until the date of segregation. My agreement does not state that. It states as of the date of separation. So basically the date of segregation for me (as I read it) is also of February 28, 2011.

In a nutshell even though she is entitled to gains/losses the valuation date and segregation dates are the same so she is not really entitled to anything since it is the same day. Am I reading that correctly?

Thanks,

Rich

Assuming that the allocation percentages are decellerating, do these intervals satisfy the smoothly increasing gateway for a service based allocation schedule: 0 to lessthan 8 years, 8 years to less than 12 years, 12 years to less than 16, 16 years to less than 20 years, 20 or more years. I don't work on these plans as much as i used to, my question is regarding the first group. I know 0 years of service doesnt' count, but does that first grouop have to be the same period as the others? Thanks.

Is anyone hearing about prototype sponsors doing interim amendments for Friday's Hurricane Sandy Relief announcement??

Can you tell me if federal tax WH is required on Required Minimum Distributions to the owner of a company with a profit sharing plan ?

THanks

Participant leaves job A for job B. She has a loan from Plan A payable over 10 years as a primary residence loan. She rolls her account over to Plan B and takes a loan from Plan B on day 1 to make a contribution to an IRA to "repay" the loan, so that there is no taxable distribution. We are not transferring the loan.

Question: Are there any tracing rules that would allow her to continue the 10 year repayment period in the new plan?

With the ending of the IRS letter forwarding program and the SSA's limited ability to find people ("We normally would have the current home address only if the person is receiving benefits") I was wondering what search options some of you are using to find missing participants.

Thanks

If an employer establishes a salary-reduction HSA with employee contributions made through a cafeteria plan, and no employer funded contributions, should the employer monitor the employee's HSA maximum limit? If so, how does the employer know about the spouse's contributions?

A terminated employee is saying they sent in COBRA premiums. However, we never received them. In previous communications via email, the employee said they were going to wait to elect COBRA since they had 60 days to do so. The 60 days passed, and now they are saying they want to be enrolled. They say they sent in the election notice and premiums before the election period ended.

Everything I have on file says that they didn't send in the notice. Anything I can do here to enroll the employee into COBRA? It's just here "word" that she sent it. Thoughts, advice?

BNA reported in early November 2012 on a question that was posed to an IRS area manager at an ASPPA conference regarding the ability to prepay expenses with forfeitures. The manager apparently characterized this as a trust accounting rather than tax issue.

Does this create any accounting problems? I assume that a 501(a) trust uses an accrual method of accounting, such that the prepaid expense would not be recognized until the services were performed. I aslo assume the fiduciary would have to exercise prudence in prepaying expenses, particularly where expenses are paid more than one year in advance (e.g., for several years of 5500 reporting).

Has anyone ever seen this done?

A Plan Sponsor has an age graded schedule set up for their Cash Balance credits which are flat dollar amounts. They would like to change the lowest age group amount to be equal to the 401k deferral limit. For example, the 2012 credit would be $17,000, the 2013 credit would be equal to $17,500, etc. Does anyone see a problem with stating in the Plan Document that this agre group's credit is equal to the 401k deferral limit in effect for that year, as opposed to possibly having to amend the PLan each year the limit changes?

Do you use Calendar Year-end or Plan Year-End in calculating an RMD? I have a plan with Plan year-end of 9/30 and need to know if I use calendar year-end or plan year-end. Thanks.

Can this be done? So all HCE's are excluded from SH Match, with the exception of Owner Employees?

I would think so. Sounds like an amazing design in the correct situation (i.e., lots of non-owner HCE's).

Dental office has a full time dental assistant that enters SH 401k plan in 2006. She terminated employment in early 2009 to go to school to become a dental hygenist. Is returning to work for client again in Janury 2013 but only part time (all of their hygenists are part time - only a few hours a week). The plan has 1 YOS, dual entry for eligbility.

Client would like to keep her out of the plan and I am trying to figure out if this can be done. Right now, there is immediate entry upon rehire in document. I know it is not advisable to add a BIS rule to 401k plans to make rehired participants complete a YOS upon rehire, but maybe it would work in this case?

I also thought of excluding hygenists from the plan, but I believe that would solve one problem and create another as I think I would still have to include her for testing...correct? (This is a small plan and I wouldn't pass coverage testing - only 1 other nhce)

Thoughts? Any other options I'm not thinking of?

Thanks in advance.

BTW, please don't respond with "do a search - there are other posts on this". I read posts for 2 hours yeasterday and couldn't find what I need.

Participant balance is over 200K. Participant took a $15,000 loan in March 2012. The loan balance is currently $12,000.

1) Am I correct that even if the 12,000 loan is fully repaid, the max loan available will still be just $35,000?

2) Further, if the participant did NOT repay the $12,000, they could still get the $35,000 loan. So what that means is there is actually a disadvantage to repaying the loan (in terms of how much money they would net). Is that correct?

IF AN EMPLOYEE IS REHIRED , LESS THAN A YEAR AFTER HE TERMINATED....WHAT PERCENTAGE DOES HE COME BACK IN WITH? THE 3% MINIMUM....OF IF HIS YEARS OF SERVICE INDICATE HE SHOULD BE AT 6%...DOES HE COME IN AT 6%?

AND DOES HE COME IMMEDIATELY BACK IN AT THE PERCENTAGE? or DOES HE HAVE TO WAIT UNTIL THE BEGINNING OF THE FOLLOWING PLAN YEAR (1/1) ...WHICH IS THE DATE THE REMAINING POPULATION HAS AN INCREASE?

WE WOULD PREFER THAT HE COME IN IMMEDIATELY AT REHIRE, INSTEAD OF WAITING