The client wants to get money ASAP to invst in a solar system that will be installed on his personal farm property. The solar panels will NOT provide any electricty that is used by him personally. The electricity is only sold back tot he power company. Anyone do this? Is it an ok investment or are there PT issues?

I have so little contact with Governmental Plans that I'm unsure of what I think I know.

I have very little information to go on here, other than a brief conversation. The new director of a governmental entity, which has a 457 plan and a 401(a) profit sharing plan, wants to make elective deferrals to the profit sharing plan. He said his prior governmental employer allowed him to do this. That's the sum of the information I have at this point. His prior plan may possibly have been a grandfathered 401(k) plan.

Let's assume that the current 401(a) plan is post-TRA 86 and is not a "grandfathered" 401(k) plan.

I think the current plan could allow employee voluntary after-tax contributions, and that these would count against the 415 limit.

I think the current plan canot allow "deferrals" in the normal sense.

I think a governmental plan may provide for mandatory employee contributions, and "pick up" the mandatory contribution under 414(h).

Agree/disagree? Is there any basis for allowing "deferrals to a governmental 401(a) plan, including a money purchase plan, other than as I mentioned above?

Thanks.

The loan policy requires the reason to be the statutory hardship provisions. A participant took a loan using a foreclosure notice. The same participant would like to refinance her loan and sent a statement showing overdue payments but not an actual foreclosure notice. The reasoning is to be preemptive because a foreclosure notice will be forthcoming next month.

In my opinion I think she would have to wait until she receives the next official notice but wanted to check on other opinions.

Is anyone still doing anything on this?

I remember back when PPA first came out (you know, when we thought we'd actually get real guidance within 12 months), many TPAs took the position that as a good faith statement, we'd provide the asset listing of a pooled account (or a copy of the account statement), and my firm did, too. Now it's five years later, and we're still attaching asset lists, and clients are starting to question it (because they have short memories).

A quick survey of TPAs today revealed that almost none were still doing this. In fact, one mentioned that it was brought up at a recent conference, and Steve Forbes thought it was unnecessary. Thoughts?

H&W plans are not my area of expertise, but I have been asked to complete the 5500 for a client using our software.

They have over 1,000 participants in their medical benefits plan, which included employer funded Dental & Vision benefits for which they have filed 5500s for many years.

They recently changed the Dental & Vision benefits to be 100% employee funded. They deduct the premiums and forward them to the insurance company. They were under the assumption that those two benefits no longer needed to be included in the 5500 reporting. I have been unable to find anything that would support that view. In my ingorance, I assume that since they are choosing the provider, deducating and transmitting the premiums, that it is part of their Health plan and should be reported.

I don't know if the D & V premiums are deducted pre-tax or not, if that makes a difference.

A participant over 70 1/2 refuses to take RMD (for whatever reason).

Is the TPA required to issue a Form 1099-R?

If not -- how will the IRS know that there is a violation of the RMD requirement?

Thanks.

Plan was created for employees to require payment only upon involuntary separation from service. The company decided to include a director in the plan and just slotted him in under same terms as employees. It was not intended to limit payment for director to only involuntary sepration from service as that term would not seem to apply to a Director in the same way as an employee. I would like to change the payment term from involuntary to any separation from service, but it does not appear as though I can do that under the regulations without running afoul of accelleration/re-deferral rules. One potential argument is that this was a scrivener's error or that the term "involuntary separation" is ambiguous and subject to interpretation as applied to a director. Any thoughts?

Can a plan sponsor amend out of a safe harbor match? They currently have a dollar-for-dollar up to 4% plus 50% on next two percent match formula. PYE is 9/30. For the 10/1/2012 plan year, can they either lower this to only the basic s/h match or possibly amend the s/h out of the plan entirely?

Thanks

During the period of 04/2011 through 09/2011, the plan was using the self certify method for hardship withdrawals. As the participant is processing the request via the web or participant services, it is communicated that upon request, the plan can request the backup documentation for the hardship taken at any time. There is a participant in question that cannot produce the necessary backup, so the client is requesting that the participant pay back the hardship amount. Our question is: For what amount is the participant responsible for paying back, the gross or net amount of the distribution? Also, if this amount is paid back to Vanguard, into what source should this be accepted into?

I've read that you don't actually have to fail non discrimination testing to do an 11(g) amendment. Does anyone have a reference or site to support this?

Hello,

I was wondering if anyone knows where I can get a sample SBC for a stand alone HRA that provides medical expense reimbursement. The templates on EBSA's website are not really on point for an HRA.

Thanks!

Adviser suggested a DB plan but that seems too archaic and costly for one participant. He is 58, has nothing in retirement, makes $240K a year and has about $72K to play with annually. I suggested a SEP or Uni-K and/or 412(i) plan. Agree? Disagree?

Plan had a bunch of people who became eligible in 2007-2009 but were not informed of their ability to make 401(k) contributions. They all terminated in 2009 or '10.

In preparation of the 2010 analysis, in 2011, this was realized. Company made the requisite contributions and attendant matches and paid the people out (all were less than $100).

So, when are these people considered having account balances, and thus, participants again? When the deposit is made to the accounts (mid 2011)?

Do they get "retroactive" account balances back to 2007-2010?

This is extremely salient to my open participant count for 2011 form 5500.

A Plan Administrator and actuary take the position that the actuary will not certify the AFTAP unless requested by the PA. Thus, the AFTAP is deemed to be less than 60% and other than de minimis lump sums cannot be distributed even though if the AFTAP were certified it would exceed 80%.

MAP-21 rates apply for funding and AFTAP in 2012 unless the plan sponsor (not the PA) elects otherwise. So, the plan sponsor does not elect to defer MAP-21 for funding and AFTAP determination. The PA still does not request the EA to certify the AFTAP.

Position would be that AFTAP remains under 60%.

Any comments?

P.s. As of 4/9/2013, IRS is still uncomfortable with this consequence but has not publicized that it will be addressed.

I have a plan with a definition of spouse as follows:

“Spouse” means an individual to whom a Participant or Beneficiary is married under the law of the state in which the Participant or Beneficiary is domiciled.

As you can see, the definition doesn't include a reference to DOMA. Some of the plans I work with do include a reference to DOMA or federal law in their definitions of Spouse, but certainly not all, and not the plan at issue.

The IRS, as part of its determination filing review, is asking the plan to amend the definition of Spouse to comply with DOMA. Have you seen this before? This is the first time I've had an agent make such a request, and given the several recent court decisions on DOMA (among other reasons), I'd prefer not to amend the definition.

If you've seen this from an IRS agent, I'd appreciate hearing about it and what your response to the IRS was. Thanks.

For a traditional annuity plans that pays lump sums under 417(3), the regs had indicated that the lump sum conversion basis in your valuation should equal the funding segment rates. So for a 1/1/2012 valuation using a September lookback, the lump sum conversion basis and the funding segment rates are both set to be equal to 2.06% 5.25% 6.32%.

Does that still apply under MAP 21. So for a 1/1/2012 valuation for a sponsor that elects to take advantage of MAP 21, would the lump sum conversion basis be 5.54% 6.85% 7.52% (same as the 2012 funding segement rates)? If not, then MAP 21 would not have a significant impact for a plan that pays 100% lump sums at decrement.

Obviously none of this would impact the actual amount of benefits paid since those would still be determined under 417(e).

Thanks

To utilize a Hardship for Funeral Expenses of a deceased parent, is that parent required to be a biological parent, or is the option also available for a "step" parent?

Quick question that I think (hope?) I know the answer to but just want to confirm: I'm aggregating a Partner DB/DC plan arrangement with a Staff DC-only plan. In the Staff DC plan all participants receive an allocation of 7.5% of pay. This provision was put in to specifically avoid any minimum gateway issues. However, the plan's eligibility is 1st of the month after 1 year of service. Therefore, an employee hired 6/30/2011 would not enter the plan until 7/1/2012, and his allocation would be based on 7.5% of pay earned after DOP (i.e., roughly 3.75% of total year pay).

I believe this allocation is okay and would still satisfy the minimum gateway requirements, based on comments I've read in the Coverage and Nondiscrimination Answer Book, specifically the following paragraph:

"The definition of compensation set forth in Code Section 415©(3) is to be used for purposes of determining applicable limits on benefit accruals (the 100 percent of average compensation/$160,000 (as indexed) limit) and allocations (the 100 percent of compensation/$40,000 (as indexed) limit). It is important to note, however, that the definition is also used for certain other purposes, including determining key employees, determining top-heavy benefits or allocations, establishing which employees are to be considered HCEs, and the minimum gateway allocation (through date of participation only)."

However, I do not see anything in the Code or the Regs that state this. Can someone please confirm if the Staff plan in my example is okay with regards to the minimum allocation gateway?

What are the rules pertaining to terminated participants over the age of 65 with account balances greater than $5,000? Can they be forced out of the plan and required to take their account balances?

Right now I have a whole life with Colonial and I've been hearing that term is better to get. I've for whatever reason thought whole was better. Is whole life kinda like a savings account? I've been putting into it for about 3 years. Is it possible to just pull the money I have in it out and open up a term policy? FWIW I"m 30. Which do ya'll think is better, whole or term? I really can't afford to have both policies since I'm maxing out a 457b and my wife's Roth IRA. We have another baby on way, and I was thinking I could pull the money in my whole insurance policy out.