Are amendments required for plan documents that have limited employee contributions to $2,500 or less in previous years?

Quick question - want to see if I'm off base. Say you have a change to the fee information that can be charged directly to participant - adding or increasing loan fees, distribution fees, etc. So you generally have a minimum 30 day notice period before the change can be implemented. Fine. Question: is the SMM an acceptable method of notification? It seems to me that it is - 2550.404a-5(e)(1) allows incorporation into other documents under ERISA 102. Any other thoughts?

Is there ANY possibility of making a tardy election for 2011 plan year funding relief under PRA 2010?

The deadline for the defined benefit plan in question was December 31, 2011. The plan's actuaries prepared the election package, e.g., (i) election letter, (ii) draft notice to participants, and (iii) cover letter explaining how to elect, when to elect, how to provide notice to PBGC and to participant.

But, there was some confusion as to whether the plan's sponsor received the election package.

After reading through IRS Notice 2011-3, and the parallel Code section 430 and ERISA section 303 provisions, it sure looks like there is no possibility of making a tardy election.

Is this worth a call to the IRS and/or PBGC? Or is the answer a clear "too late"?

Thanks.

We have a client that used W-2 Wages (excluding Safe Harbor Fringe Benefits) as contribution compensation. In 2011 and 6 months of 2012, cell phone reimbursement was inadvertently included in compensation in applying employer matching contributions. This is an operational error and would the correction be that the affected participant accounts must be reduced by the overage, adjusted for earnings, and then reallocate or place in an unallocated account (suspense account, I.e., forfeiture account) and use to reduce future employer contributions. NOTE: No further employer contributions can be made to the plan until the suspense account is liquidated)?

A participant who is a More than 5% Owner at any time during the plan year ending with or within the calendar year in which such participant attains age 70 1/2 must get an RMD, even if employed, and must continue to receive RMDs even if they cease to be a 5% owner.

I just want to make sure I didn't miss something else - if a partner sells out at age 65, but continues to work as an employee, then they don't have to take an RMD as long as they are working, right?

Employer has a non-ERISA profit sharing plan. In the past, all profit sharing amounts were deposited into employees' 401k accounts. Under a new CBA employees have an election to take the profit sharing amount in cash or have it paid into their 401k account.

If paid into a 401k account, against which limit is that amount charged? Is it treated like a salary deferral and charged against the $17,000 deferral limit or is it treated as an employer contribution and counted only against the aggregate $49,000 annual addition limit?

Are there any other issue raised by the introduction of the employee election about how to treat the profit sharing payment?

Thanks!

Employer has a non-ERISA profit sharing plan. In the past, all profit sharing amounts were deposited into employees' 401k accounts. Under a new CBA employees have an election to take the profit sharing amount in cash or have it paid into their 401k account.

If paid into a 401k account, against which limit is that amount charged? Is it treated like a salary deferral and charged against the $17,000 deferral limit or is it treated as an employer contribution and counted only against the aggregate $49,000 annual addition limit?

Are there any other issue raised by the introduction of the employee election about how to treat the profit sharing payment?

Thanks!

When Notice 2012-40 states that the $2,500 annual limit does not apply to an employee's share of health coverage premiums, would you agree that premiums for supplemental insurance like cancer policies, premiums for individual health insurance policies and individual dental policies are considered "health coverage" and not subject to limitation?

I appreciate your insight.

I have a plan which is a spin-off from a multiple employer plan. Considering a spin-off is a continuation of the MEP, should the new spin-off plan be numbered #001?

How can I determine if a cash balance plan's benefit is in excess of 415?

Do we just look at the account balance when they retire, or limit the service credit for each year (or both?)

Example, the plan's service credit for someone age age 50 is $125,000, NRA is 62.

Max 415 annuity at 62 is $200,000/year at age 62.

I can determine the max 415 lum at retirement (calculate LS at 5.5%, etc.)m but how do we do it for an individual year?

Suppose a cash balance plan defined its crediting rate as the 3rd segment rate, which was added as a safe harbor rate in the hybrid plan regulations.

MAP21 now adds 430(h)(2)©(iv) which modifies all 3 segment rates, as necessary, to be this new 25 year average, with the "as necessary" referring to the corridor.

If the plan document's language directly referred to Internal Revenue Code Section 430(h)(2)©(iii) for the 3rd segment rate, does the presence of this new rule under ©(iv) now indirectly change the plan's crediting rate to the MAP21 rate?

In order to preserve the old actual 3rd segment rate as the plan's crediting rate, would an amendment be necessary?

Now that we have clear guidance from the PBGC that we cannot use MAP 21 rates for the alternative method. I was wondering about PBGC 4010 filings. For determining either the 80% FTAP or the $15,000,000 shortfall, can MAP 21 stabilized rates be used?

I'm with a company that has just over 500 employees and I am looking for a new Benefits Enrollment/Management system. Currently, I am using Oracle, but it is just painful both for the employees and administrators.

Was wondering if anyone had suggestions. I did a demo of the Benefit Focus system and really liked it, but they recently made a decision to stay away from companies with less than 1000 employees. Any suggestions....here is a wish list of features:

- We are international, hace employees in several countries. Would like to be able to assign different benefit / workflows for different employee groups.

- We are also self insured with self bill, would like the system or provider to handle billing and reconciliation.

- Carrier enrollment....at least for US, I would like the system to pass enrollment info directly to carriers on a weekly basis.

- Easily pass employee benefit costs to ADP.

- Easily pass employee costs to Oracle (I cant get rid of ORacle completely, it is an enterprise wide system.

Thanks.

Eligibility for 401k salary deferrals and the 3% SH allocation is no service required. There is a one year service requirement for the new comparability allocation on top of the 3% SH. Forgetting about statutory elig requirements for now:

Can the participants receiving the 3% SH allocation but not the base be consiered in rate group testing and if so must they then satisfy the gateway requirement which is 4.49% or might they be exempt from gateway since they're not eligible for the new comparability base allocation?

Thanks.

This is my first post ever but I frequently read other posts. I'm not that experienced in plans outside the perverbial box so I'm struggling with this one.

Potential client in Kansas has a 401k/PS Plan for his LLC. Owner is only participant/employee. Uses plan to purchase land but plan takes a mortgage out to pay for land. We understand the PT issues of all expenses/income go thru plan, owner can't be involved in anyway, etc. Also understand that we need to watch for UBTI potential issues. Bank wants the client and client wants bank to take care of plan AND lend the plan the money. Can anyone give me guidance on where in the code sections I might find any reference to how a plan takes out a mortgage?

Currently, owner is trustee. Can owner sign the mortgage papers as trustee and still be considered to keep an arm's length away? Would the loan be a nonrecourse loan to the plan as they can't come back on the plan if land prices dive and can't recoup loan principal in case of default? Is there a limit to how much liability a plan can have?

Probably most important question - does anyone know of a good resource to contact to help navigate thru this in Kansas or Missouri without spending a ton of $$?

Thanks.

We need Congress of yesteryear where some cigar chomping Southern Republican strolls into the IRS Commissioner's office, fingers his goatee, looks out the Pentagon window at the Cherry Trees, and then says to the Commish [Douglas Shulman],

"Shulie, that's a damn nice view you got here. You'd don't really want to go tinkerin' with that old reg? We was just thinkin' of usin' part of the Highway money to name a new stretch of I-80 after the Commish, which we thought would be you."

Have a client where they lay people off over the summer. The people are generally brought back in September (work load follows the school year). Many have loans. Has anyone come up with a good way to address this problem (i.e., they systematically end up behind on their loans).

Doubling up payments when they get back is one that comes to mind, but that can be a tough sell for some employees. Reamortizing the loan every time they leave doesn't appear to be a great solution either seeing as how the recordkeepr chargers a new loan set up fee every time we do that. Anything?

The firm where I am employed established an ESOP in calendar year 2008. Since then, the firm has directed its 3% safe harbor 401(k) contributions into the ESOP.

However, the firm has not yet had an appraisal, and no stock has been purchased. Our safe harbor contributions have been sitting in a cash account since the end of 2008 earning almost zero interest, with substantial expenses related to plan administration eating away at the cash (we're probably really too small to be doing an ESOP, but that's another story).

Since the purpose of an ESOP is to buy company stock, how long can this go on without the ESOP purchasing stock, before the IRS or DOL decides this isn't a real ESOP? I should add that this is a closely held small company, where the primary owner has been reluctant to sell, as the value of the company is probably way less than in 2008, and the owner seems to be holding off on selling to the ESOP in the hope that the company value will increase.

I have been searching and have been unable to find specific guidance regarding what level of disclosure is required for a fund change in a 401(k) plan in light of the new participant fee disclosure rules. It seems clear that general changes within the same fund after the plan has sent it's initial / annual disclosure out do not necessitate republishing the full disclosure with the new information although that information is to be published on the website (if applicable) as soon as possible. In the case where the fees are changing, however, as a result of swapping of one fund for another, it would seem that more detailed interim fee information should be provided. Is it appropriate / sufficient to provide a comparative chart comparing the old and new fund as part of the fund change notice but not redo the complete disclosure for the plan until the next annual statement? Is it arguably possible to do less and not provide fee information on the new fund in some comparative format? Thanks.

One of our clients has a profit sharing plan with pooled investments, valued annually. Some of the participants have very large account balances. The trustees want to create a policy that distributions over a certain dollar amount will be subject to an interim valuation. Does anyone have sample wording?