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

If an eligible participant has a loan but then becomes part of an excluded class, is the employer still obligated to withhold and submit his loan repayments? I think yes.

A plan was originally designed years ago with a 5-year cliff schedule and a 3-year cliff for top heavy years. When the plan was restated for EGTRRA in 2010 the vesting provisions were changed to say that a participant's interest will vest according to a 2/20 schedule, but for amounts contributed prior to 2007 the original cliff schedules would apply, specifically stating that the 3-year cliff schedule would apply for top heavy years prior to 2007. The plan actually operated liked this beginning with the 2007 plan year, although the doc wasn't amended until the EGTRRA restatement (the TPA said an amendment wasn't needed at the time and it was OK to wait until the restatement). The plan first became top heavy in 2011.

There's a participant who terminated in 2008 with a very large account balance, the great majority of which was allocated to him prior to 2007. At the end of 2006, he only had 3 years of service and his entire balance was 0% vested under the old schedule. The small contribution he received in 2007 was vested under the 2/20 schedule and when he terminated in early 2008 he had a total of 4 years of service. From 2007 through 2010 he was shown being 0% vested in the large pre-2007 amount and 40% vested in the tiny 2007 amount. Now that the plan became top heavy in 2011, I am wondering if the vesting language, which is literally written as simply as I've described above, is adequate and whether it would be correct to still consider the pre-2007 amounts 0% vested? All help is greatly appreciated.

When the employer funds a QNEC to correct a missed deferral situation, how is the deposit allocated?

I am being told that the 50% (of missed deferral) portion is allocated to the participant's Deferral Source, the 100% match portion is allocated to the match source, and only the earnings portion is allocated into the QNEC source.

If the whole correction is referred to as the QNEC, shouldn't it all be allocated into the QNEC source? Aren't there certain restrictions on QNECs that requires them to be separately recordkept?

Any IRS guidance/citations would be most appreciated. Spent more time than I could afford to already in rev proc 2008-50

thanks!

The elective deferral limit for 2012 (under age 50) is $17,500. That is across all plans, correct? So if an individual had the ability to participate in both a 401k and a 403b plan, the most she could deposit in 2012 is $17,500 total, not $17,500 to each plan, correct?

Thanks

Can I waive elgiblity for anyone hired on a specific date (i.e., 11/15/2012). There 3 other employees not eligible who would not benefit from this amendment (because they were hired on some other date), though the benefiting employee would NOT be an HCE (salary is $50,000). Is this OK?