I have a life & health license and have to take ethics for that as well as for ERPA. Can I count the one ethics class for both?

Have a participant that took out a loan for purchasing a primary residence. At the time he figured he could pay it off in 5 years. He now is having a little financial difficulty and has asked if he can refinance the loan for a longer period of time than the 5 years so he can lower his payments a bit. Although it probably doesnt matter he is not looking to extend the loan for the 15 years but maybe for 10. Does anyone know if this is possible? Any help or direction is most appreciated. Thank you.

Does the annual auto enroll notice need to actually name the default investment?

We have a client who has got it in their head (from who, I have no idea) that they would like to terminate their Cash Balance Plan, pay everyone out, and start a new one right away.

Without going into all the details, there are obviously many reasons they should not do this. One reason I am unsure of though is how quickly could they could establish a new Plan? Are there rules about waiting a period of time before setting up a new plan?

Hello,

I have a plan effective 01/01/2011 with two key employees(each owning 50%) that started the company in 2006. They both are eligible to participate but have hired several new employees in 2011. They use prior year testing for ADP with the first year using the 3% rule. The first year of 2011 passes given its an HCE only plan. Given there are no NHCE's in 2011 what ADP percetage would be used to determine 2012 since some of the new hires would become eligible in 2012(the plan's service is 1 year, 1000 hours semi-annual entry)? If anyone could help I would really appreciate it.

Thank you,

-Brian

I have a client (takeover from another TPA) who has established two plans. One is for employees hired prior to 1/1/07 and the other for employees hired 1/1/07 or later. It appears this was done to avoid audit.

I have never seen this done. Is it okay? Both plans have the same provisions, even a new comparability profit sharing contribution. What has to be tested together?

Thanks for your help.

I am fairly new at my current job. They use FT William for 5500s. I have never used FT Williams before. We use the internet version. (Maybe that is the only version.) When the 5500 is all done and ready to be signed we send an invitation to the client to e-sign the 5500. When they do that it transmits to EFAST2.

Here is the thing I find odd and I am being told by people here this can't be fixed and I wanted to double check to see if this is true. I get no notice if the form has been signed. To me if I were building this system I would have the system send out an e-mail to people who sent the invitation saying "client just signed". On October 15th I had to keep going out ever few hours to see which clients had signed and which one hadn't.

Is there really no way to set the system up to get an e-mail saying client just signed? If nothing else I would like to know so I can double check it was accepted by the DOL or look to see if there are any issues.

Like I said adding a feature like that seems so obvious to have I am hard pressed to believe it doesn't exist.

The measuring period for vesting is the Plan Year. The Plan Year means the 12-consecutive month period which coincides with the adopting employer's tax year . Year of vesting service is 1,000 hours of service (actual hours).

Once the participant was rehired last year what should have been the participant's vested percentage?

I am trying to figure out the vesting for one of our employees who was rehired last year:

2001 – worked less than 1000 hours (original hire date – 9/10/2001)

2002 – worked more than 1000 hours (0% vested)

2003 – worked more than 1000 hours (20% vested)

2004 – worked more than 1000 hours (40% vested)

2005 - worked more than 1000 hours (60 % vested)

2006 - worked less than 1000 hours (employment ended – 6/9/2006))

2007 – not employed

2008 – not employed

2009 – not employed

2010 – not employed

2011 – worked less than 1000 hours (rehired 7/10/2011)

2012 – worked more than 1000 hours (DOES HE NEED TO START FROM 0% VESTING?)

Oh my. I am reviewing plans for the second go around of "correct" PPA/PRA 2010/MAP-21 amendments and I am tangled up. We have some DB plans with automatic lump sum distributions of $1,000 or less and optional lump sum distributions of up to $5,000 with participant consent. 436 exempts the application of the 50% rule for payments that are not subject to participant consent. Colleague here says that the 50% rule would not apply to these plans because the plans could be amended to have the $5,000 automatic distribution/rollover provision, therefore having a LS distribution up to $5,000 made without consent. Before I go further in the amendment process, any one want to weigh in? Does the 50% apply if the LS >$1,000 and up to $5,000 is at the participant's election? I would love to just accept my colleague's position and move along, but I feel like I need to prod this topic a bit more..............Thanks.

We have a client with a DB/DC Offset arrangement. There are 6 participants in the DB Plan, but with the offset only the owner has an accrued benefit. The DB Plan has been filing PBGC premiums each year.

The DB Plan is now going to terminate. As the owner is the only participant with a benefit in the DB Plan in the year of termination, would this be considered as an owner only Plan and therefor not required to file a PBGC premium for the year? Would it be required to file for a PBGC termiantion?

Sorry if I have left anything material to the case out.

Thanks

Assuming a pretty vanilla cash balance plan (age-weighted pay credits & fixed-rate interest credits), are there any special design considerations for rehired participants who have either (i) already received a lump-sum distribution on termination, or (ii) are receiving annuity payments when they are rehired?

In the first case, the right approach seems to be simply to start over with a zero account balance. If so, does that approach work for the second group (those receiving annuities)? That is, can you simply leave the current annuity stream going (no suspension) and start them at zero in a new account? I don't see anything in the final or proposed regs, but I'm not sure what to make of the rules under 411(a)(7) in this context.

The sponsor would like to apply the same rules to those who commence payments before and after normal retirement age (and doesn't want to implement a benefit suspension rule for post-NRA rehires).

Cheers!

We have a situation where an revised ADP test was run, failed and excesses returned. The employer requested that we re-run this test based on revised compensation. The new results still failed, but the excesses were less than the first test. So now we have HCEs which received overpayments of excesses.

Where the amounts are less than $100, EPCRS indicates that the employer is not obligated to ask for those amounts back, nor even inform the HCE that they received any overpayment. If the employer does not make a full correction by requesting these overpayment amounts back from the HCE and making up the shortfall by making an unallocated contribution to the plan (operating under the less than $100 "rule"), I am understanding that the employer should file under VCP due to not making a full correction of the situation.

Can anyone out their share their thoughts and wisdom on handling small overpayments?

Thanks!

What is the risk to an employer in a multiple employer plan due to funding problems of other employers in the plan? The IRS multiple employer plan regulation requires that the plan be a "single plan," meaning that all plan assets are available to pay all benefits. However, the funding regulations under the Pension Protection Act apply all the rules to multiple employer plans (established after 1988) on a segregated basis, including Code Section 436. At what point (if any) does the "single plan" requirement override segregation of funding obligations or otherwise "bite" other employers due to one employer's inability to fund?

Thanks!

Employer X is an insolvent 501©(3) organization going through state receivership proceedings. X sponsors a 403(b) plan providing for a matching contribuiton equal to 1% of compensation to employees who are accruing benefits under the employer's defined benefit plan (which is going through a distress termination) and are employed on December 31of the plan year. In addition, the 403(b) plan provides a nonelective contribution equal to 5% of compensation for those employees hired after January 31, 2007 and employees who elect out of the defined benefit plan as of April 1, 2007 who are employed as of December 31 of the plan year and are credited with at least 1,000 hours of service for the plan year.

May X amend its plan to cancel the employer contributions since no employee will have yet earned the right to receive the contribution on December 31?

Alternatively, may X amend its plan to further condition the contributions upon there being sufficient funds after satisfying the claims of creditors entitled to greater priority in the state receivership?

DB Plan was amended in 2011 to allow in-service distributions after attaining age 62; prior to the amendment in-service distribution after attaining 65 were permitted. As a result of the amendment, the plan would not meet the Sec 436 adjusted funding target attainment percentage, and because employer did not make make a contribution to attain the required percentage, the amendment did not take effect in 2011 in accordance with Sec 436. Does the amendment automatically come into effect the next plan year if the adjusted funding target is attained or is the amendment dead unless readopted? See Regs: 1.436-1(a)(4)(iv) "If the plan amendment cannot take effect during the plan year, then it must be treated as if it were never adopted, unless the plan amendment provides otherwise."

Can the plan be amended in 2012 to delete the reference to the age 62 in-service distributions without violating the anti-cutback rule on the ground that the amendment never became effective?

BCR

Have a 401(k) Plan with a PYE 10/31 (which of course means the Plan Year began on 11/1/11. What is the maximum compensation level that can be used to calculate the a potential Profit Sharing amount. $245k or $250K? Thanks.

Hoping for a little clarification on the above. Client has self directed broker accounts. I'm trying to get some direction in laymans terms to explain what is required for fee disclosure on the investment side because nothing was provided. There are no designated funds. Everyone can do as they please. I have never agreed with this approach for a 401(k) plan and am looking for amunition to convince the movement of these of these assets to one of the mutual fund/insurance companies. I understand that a FAB was issued offering some relief to what was required by plan sponsors to provide to participants for these I believe I'm just confused by it. Therefore, what exactly are these brokerage institutions/plan sponsers ultimately responsible for providing? And any additional knowledge to help me explain the vulnerability of this Trustee would be helpful. I might add that they can also invest in whatever brokerage house they like.

Doing an amended 2010 5500 today. Should I check the extension box? Getting a validation error from FT Williams because there is an extension created, but the box isn't check. It seems silly to check the extension box for an amended return.

Thoughts?

Plan had late contributions for several payrolls (1 or 2 days late - large plan). The lost earnings are to be deposited this week. No VFCP.

Is the date of correction on Schedule C the date the deposit was made for that particular payroll, or is it the date that the lost earnings were deposited?

Thanks.

Regarding the quarterly fee disclosure for "fees actually charged (whether by liquidating shares or deducting dollars)...to the beneficiary's account..." DOL Reg 2550.404a-5©(2)(ii)

Plan pays quarterly fee for admin services. Participant accounts are valued annually and fee is charged to participants' accounts on a pro rata basis once annual val has been completed based on annual val account balances.

For quarterly fee disclosure purposes of "fees actually charged", do you think fees are charged when paid out of Plan assets (each quarter) or when allocated to the participant accounts (during last quarter or year)?