Participant is redoing her home basement so her monther can move in. One of the largest expenses is retrofitting the bathroom to make it handicap accessible.

Is there any way to call this a medical expense not covered by insurance? Or would these types of renovations and/or medical equipment be ineligible altogether?

LOVE the new web-site!

We have an employee going through a divorce, and her husband was under the impression that he was covered by her insurance here, though he has never been since she started working here 14 months ago. We're a small company, so I don't have a lot of experience with this, but I'm pretty sure that we're allowed to add the husband mid-year if we receive a court order that we must cover him.

The employee has asked me if she could subsequently drop him from coverage mid-year if she received a court order stating that she must. I suspect that it would be permissible, but haven't ever heard of a court order which states coverage must end. Is anyone able to share more information about this with me?

Thanks for your help, and happy new year to all!

Hello All,

I am having trouble accessing my 401(a) pension account from a company I left in 2005. I have called the company, but they say there is no provision for access to the account until age 59.5 and that they did not need to comply to ERISA since they are a Church Plan. This is different than what they told me a few years back when I was planning to roll the funds over into my current pension plan and I have a booklet they sent me back then seems to also provide for withdrawl or rollover upon separation from service, provisional upon payment of a 10% tax penalty. I called the company twice and spoke with two different people. One of them even said that since the account was entirely company funded, that it was their money until I retired. In the "Plan Details" section of my account online, the SPD is missing. When I asked the woman about this, she said that it used to be posted there but it wasn't anymore and she didn't know why. When I asked if I could get a copy emailed to me, she said it was only available to be sent to me by postal mail for $40.00. This whole thing seems really shady to me and I am wondering if I need to hire an Attorney? Anyone have any knowledge on this?

Many Thanks

Lindsay

A client we provide document services to has a non-discretionary Trustee (TD Ameritrade). TD Ameritrade refuses to sign the Volume Submitter document as Trustee of the Plan. How does this affect the Plan Sponsor's reliance on the Opinion Letter for the VS document? Could they use an external Trust Agreement? If so, would they need to submit this with the application for a DL, and they could leave the Trustee signature blank on the actual document?

A plan has a qualifed match. As a result it is combined with 401k in the ADP Test. Historically the test has passed. Now the test fails and refunds will be taken. In the combined test, the refund is $8k. If I were to split the 401k and match separately (ADP and ACP Test), the refund would drop to about $5k.

Can we separate the 401k and match into separate tests this year for the sole purpose of reducing refund?

I really, really, really miss by 'view new posts' button! It was FAR more efficient thatn the new set up!

Facts: Plan is Cycle B, so its cycle ends 1/31/2013; Plan will be terminated as of 1/15/2013.

Am I correct that the sponsor does not need to file a 5300 during its normal cycle, but may file a 5310 in connection with the termination instead? Any suggested approach?

Several plans I am looking at are cash balance plans that have not historically provided Susp of Benefits notices. Several such plans have also frozen service accruals/credits, but not investment accruals. One or more of these plans also have frozen traditional plan portions of benefits payable from the CB plan.

My question has to do with which piece of benefit (ie CB portion or trad plan portion), if either or if both, must give the greater of accrual of benefits or actuarial equivalence? Unfortunately, I'm not finding much info online re: CB plans and SOB notices. Of course, the normal form of benefit for the CB portion of benefits is an actuarially equivalent SLA.

I have been advised that for the CB portion with the frozen service credits, so long as the investment credits continue to accrue, the actuarial equivalence of benefits as of prior year end dates does not have to be calculated.

As a rough example, let's consider an ee who doesn't commence until 68. If as of this ee's NRD, his CB portion of benefits were as follows: $28500 as LS or $217.02 as SLA. At the end of the year including his NRD, and only giving investment credits from NRD to the end of the year, his CB portion lump sum is $29575, which is equivalent to $224/mo as an SLA.

1) Because the ee gets continued investment credits, I don't believe we'd have to calculate the actuarial equivalent of the $217 SLA from his NRD to the end of year including his NRD. That would likely be greater than the $224/mo benefit (which is AE of the CB balance) as of the end of year of the NRD.

2) If however, the plan has a frozen trad portion of benefit and no suspension notice is issued, that portion of benefits has to be actuarially increased, correct?

If possible, please opine on the accuracy of the statements 1) and 2) above.

Thanks much

I haven't had this in a long long time, so I just need to verify that I am thinking correctly.

Plan has deferral and Safe Harbor basic match only for 2012 and is top heavy. Since there are no additional employer contribuitons, the plan is deemed to be not top heavy for this plan year.

The SHMAC is based on entry date compensation, so does this still satify the THM and no additional contribution is due to the participants? Even the ones that do not defer?

Thank you

PArticipant in a defined benefit pension plan retires in 2012 and is 73 years old. The Plan allows for lump-sum distributions and that is what has been elected.

Is a portion of the lump sum ineligible for rollover because of the RMD rules?

If so, does the actuary need to calculate the RMD based on his 12/31/2011 accrued benefit?

That's how it would work on the 401k side, but I don't do a lot with the DB plans... I was surprised that the actuary wasn't sure, so I thought I would ask you guys!

Under my reading of the Code/Regulations, the earliest a 403(b) plan may allow a distribution is upon a "triggering event" (e.g., 59.5, etc.), but a plan may be more restrictive than the code. In other words, a plan is not required to allow a distribution at age 59.5 or a plan may limit distributions upon attaining age 59.5 to 50% of account balance. Is this correct?

Is there anything in the regs that specify at what age (age last, near or completed yrs. and mos.) that must be used in 415 calculations for ages below 62 and above 65?

I have a situation where a 401(k) Plan participant will no longer be "on the company's payroll" and will be working as "contract labor".

For plan puposes, would this be considered a severance from employment?

guess it's a New Years gift to us.

just so you don't have to hunt it down

EPCRS_revproc2013_12.pdf

If an employee has an outstanding loan from his 401K can he still make deferrals while paying off the loan?

I'm thinking about the future for when my 1 employee company dissolves. Would I have to dissolve the 401k too or can it be kept alive?

Also.... I started an Individual 401k thru TDAmeritrade for my company several years back, but have transferred all funds to a different Individual 401k I started (for this same company)....Does my company technically

administer 2 401Ks even though the first one has no funds in it? Should the first 401k be "dissolved" or something?

Thanks for the insights

What is the correction for a safe harbor plan that in years prior to 2012 calculated the safe harbor match on annual pay rather than pay period? They remitted the safe harbor each pay period but then at the end of the year remitted a true up contribution because at one time prior to 2005 I think the plan was at a prior vendor and the document did allow this annualized pay. The plan then switched to payroll based until 2012 when it was amended to use annual. They now want to correct the prior years. Does this blow up the safe harbor and ADP and ACP testing is needed, or can we just forfeit the excess match, which of course is not that easy since some employees have terminated.

Thoughts!

Facts: An employee with 50 years of service accrued a normal retirement benefit of $30,000 on his NRD 1/1/2006. The employees High 3 Year Comp for 415 is $50,000. The Plan does not suspend benefits but rather gives an actuarial increase. The actuarially increased pension is $60,000. Just to complicate matters, the plan offers a COLA and and provides that lump sums shall assume a 3% increase.

Please comment on whether you agree or disagree.

1. Since the employee is not separated from service the 415(b)(1)(B) limit is not adjusted.

2. The Plan while required to actuarially increase benefits, cannot beyond $50,000 because of 415.

3. When the employee terminates, the lump sum cannot include provision for the COLA since in theory you would be providing for benefits that exceed the 415 limit.

4. I believe a way out or semi-out of this mess might be to amend the Plan to provide for a retroactive annuity start date.

I left out all of the good stuff, which is not relevant to the questions, but begs for sympathy: The COLA caps at 50% of the initial benefit and the standard form of payment is a 10C&L but the COLA applies to the actual payment form. To make matters worse, the benefit is payable at the end of the month. The actual retirement date is the first day of the month except for postponed retirement (after 65) in which case it is the last day of the month.

I have two requests, a general one and a specific one.

First, does anyone have a good source for how to handle Pre-409A issues?

Second, we have two pre-409A plans. One participant in both received too much money from Plan 1. Can we take it out of what we owe him under Plan 2?

I know 409A allows an employer to withdrawal amounts from a nonqualified plan for employee debts up to $5,000 per year, but have no idea how to handle this with pre-409A money.

Can anyone shed some light or provide a link with more info on excluding non-benefits employees? Can the exclusion be that simple, provided the employer actually has that "type" of employee and uses it for all of their benefits.

I just wanted to make sure there wasn't something more complicated about that exclusion then say "hourly employees."

I know about coverage