John is over the age of 59.5 and is permitted to take a withdrawal.

He is still under employment and would like to cash out his account, keep it active and keep repaying back on his loan.

Can John cash it out completely and repay per payroll or must he keep enough in his account to cover the loan balance?

If you have a DCAP consisting of employer contributions (assuming not under Section 125 cafeteria plan), can a participant carry over the employer contributions to the following year?

What are the requirements for Insurance complanies having to supply Schedule A information? I am working on a large welfare benefit plan that has individual AFLAC policies for those employees who have elected for such coverage in addition to their Life and AD&D policies. I have Schedule A informaiton for the Life and AD&D policies but not for the AFLAC policies. Is this because the AFLAC policies are all individual policies and not a group policy? Should I expect any schedule A information for the AFLAC benefits?

Thank you.

Plan has fixed interest credit credited at year end. Assume it satisfy's reasonable rate. Pay credits frozen in past so not an issue.

Plan terminates partial year, say 6 months.

How is intrest credit done in final year?

Though date of termination?

Through date of pay out?

Through end of Plan year, even if a futre date?

We don't want a prohibited cutback issue to crop up.

Co. A will be purchased by Co. B in a stock sale on 10/01. We found out today.

Co. A has a 401(k) safe harbor plan. Can they freeze the plan at 09/30 & maintain safe harbor status for the short plan year due to the acquisition? The Co. A employees will become immediately eligible in Co. B’s non-safe harbor plan. Co. A’s plan won’t be terminated because of successor plan questions that just can't be resolved in less than a week; it will just merge into Co. B’s plan at some point.

I'm fairly confident that a safe harbor plan can be terminated mid-year & maintain safe harbor status if the termiantion is due to a business acquisiton, but I do not know that it can merely be frozen and retain safe harbor status.

Thanks in advance for any guidance.

Is a plan sponsor required to provide a copy of the plan document to a former participant upon request (i.e. participant is terminated and complete balance has been rolled out of the plan)?

John gets paid $3,000 in gross wages on a bi-weekly basis. He has a 5% deferral election, in which case $150 is contributed to his 401(k) every pay period.

John's employer has a restricted stock program. The stock will vest on 11/1, and the value will be reported on John's first paycheck on November - and then subsequently reported on the W-2 at the end of the year.

The 401(k) plan uses W-2 as the definition of pay - in which case restricted stock is counted as plan compensation. And the plan does not exclude anything from the compensation used to calculate deferrals. Therefore, the 5% election for the first paycheck in November must be applied to the gross comp for that pay-period, which will include the value of the restricted stock.

If the value of the stock is $15,000 - then you take 5% x $18,000 to come up with a 401(k) deduction $900. So John's paycheck is going to be a little less this pay period.

But what if the value of the stock is $120,000? 5% of $123,000 is $6,150. What do you in that situation? Take out any other pre-tax deductions and then put the rest into the 401(k) plan? So John wouldn't get a paycheck for this pay period? Do you have to take out the rest on the next paycheck? or the paycheck after that?

We'll assume the employer doesn't want to amend their plan to exclude this pay from the calculation of deferrals.

When a DB plan terminates, participants are offerred lump sum, which has always been an option.

If they choose another form as allowed in the plan, i.e. J&S or Life with 10 yrs guaranteed, and are still employed, do they have to have the lump sum option still available to them in the future? Any difference if they have terminated employment? Or are working past NRD?

Hi - Now that we've made it past the August 30, 2012 deadline, what is the due date for the next annual report under the 404(a)-5 Regs? Thanks

Can an employer have a Safe Harbor POP and an HSA? Would it depend on if an employer helps fund the HSA?

Thanks for any advice!

Michele

Here's the situation:

husband owns 100% of his company with existing qualified 401k SH 3%/PS plan and 2 NHCE non key employees

wife starts new company has one NHCE non key

Wife and any of her employees (as they become eligible) will all participate in husband's existing plan.

Companies are completely different types of businesses and they do NOT share NHCE employees.

Both husband and wife have self-employment income only each from their respective business.

For Sch C purposes for the NHCE $$ deduction, does each of them deduct only the portion of the contribution that goes to their NHCE(s)?

Does it matter as long as no NHCE contribution is deducted more than once?

Situation - employer has safe harbor nonelective 3% formula, with a discretionary PS contribution, currently allocated on a proportional basis. Wants to amend, for 2012, to a rate group tested allocation.

I know the IRS has taken a rather (in my opinion) asinine view of this at some past ASPPA conferences, essentially opining that mid-year amendments aren't permissible, other than those already specifically granted, for example, in IRS Announcement 2007-59.

While I won't bore you with why I think they are being unreasonable on this, I just wondered if anyone actually heard the 2011 discussion from the podium? If so, did they just reiterate their tired old "logic" as to why mid-year amendments aren't permissible, or did they provide any substantive discussion?

To use an extreme example, if the plan currently excludes fork lift operators, and they want to amend to include fork lift operators, they should be able to do so. And amending the PS allocation method shouldn't matter, as they will get their safe harbor nonelective 3% regardless. (I could perhaps see a convoluted devil's advocate argument for safe harbor matching issues)

Thanks.

I mostly post in the 401k voard. Not sure if this is the right board but I'm trying to findout if there is a text book regarding the long term disability insurance claims process, such as information on important case law and regulations. In 401k world we have Erica outline book, which codifies almost everything you would want to know... Anything like that for lt disability?

Does anyone know where I can find some sample language to "disengage" from a client who consistently won't provide requested information or make plan corrections based on our recommendations? Thanks.

Just taken over a sole participant (owner-only) DB plan. The plan has NRA of 62 years.

As at 1/1/2012, participant's AA was 61 years and years of service as participant were 9.

While going through the plan documents I noticed that the accrued benefit formula was as follows:

100% of average compensation * completed YOS as a participant/YOS as a participant at NRA

In this case participant's YOS at NRA would be 10.

Does this satisfy the 401(a)(4) safe harbor section?? Most other plans I have seen (in my limited DB plan exposure) have had a denominator of atleast 25. Or since this is a owner-only plan it can get away with this benefit formula??

Thanks for your help in advance!!

Just curious as to whether clients are looking at the fee disclosures and are they taking action?

In 2010, a plan sponsor missed a regular deposit of $1,700. This oversight was discovered nine months later (before end of plan year). At that point, it was immediately deposited; and lost earnings of $50 were calculated and deposited.

Sponsor recently received a letter from EBSA stating that the situation needs to be corrected. VFCP was recommended. Is VFCP required in this case?

Can a particpant take a loan, and suspend making loan payment while currently on a leave of absence?

The regualtions and plan loan policy address if the participant were to go on a leave of absence and have a loan for suspending loan payments. But, is it different if the particpant is currently on a leave of absence, wants to take a loan out, and suspend payments?

Thanks in advance for all you input on this issue.

The participant was divorced over 10 years ago. At that time the Separation Agreement stated that spouse was to get 50% of 401(k) balance (total balance was about $6,000 at time of divorce). Participant did not present a QDRO, and because he was still working, he did not qualify for a regular distribution at the time of the divorce (loans were not permitted at that time, but are now). Participant paid the ex-spouse $3,000 using non-plan assets and she signed a statement (not notarized and not dated) that he paid her in accordance with the Separation Agreement. Now participant is applying for a plan loan. The account has about $150,000 now and participant wants to borrow $50,000. As plan administrator, we think that the outstanding award in the old Settlement Agreement prevents us from making a loan. We think that the "release" by the ex-spouse is not valid (and wouldn't be even if it had been notarized and dated) and that the only way to validly make the loan would be for the participant to get a revised Separation Agreement that states that the ex-spouse has no rights in any amounts in the participant's 401(k) plan. HOWEVER, since the amount that was due to the ex-spouse was $3,000 and since even if the requested loan were made the account would still have about $100,000, we think that we can make the $50,000 loan but tell the participant that the $3,000 in question can't be loaned or distributed to him in the future until he gets a revised court-approved Settlement Agreement clearly stating that ex-spouse has no rights to the 401(k) plan. To complicate matters, the participant has no contact with the ex-spouse and doesn't know where she is, so it would be difficult to get her consent to a revised Settlement Agreement -- not to mention attorney fees for getting a revised Settlement Agreement. --- So the main question is whether an old Separation Agreement "hanging out there" awarding an ex-spouse part of the 401(k) account makes it impossible for the participant to get a subsequent loan or distribution.

A few years back, sometime from 2004 to maybe 2009, there was a case where a plan - and I believe it was a multiemployer plan - had a COB provision that provided the plan would be secondary for claims in excess of $1,000 if the participant was also covered under another plan. I believe the case was in Minn. or Michigan, but I'm not sure of that.

Does anyone by chance know the name of that case?