If I am reading the Treasury regulation right, the cure period that a plan may provide seems to apply only where a participant has missed one or more of their loan repayments. So, basically, the cure period is for curing loans that do not satisfy the level amortization requirement in operation due to the missed repayments. Do I have that right??? If so, then does the cure period not apply to extend the time to repay where a participant has passed their 5 year maximum loan repayment date, since the maximum repayment period is a separate requirement from the level amortization?

On that note, for a 5 year loan, from which date is the 5 year period counted? From the date the loan is issued from the plan? Or the date of the first scheduled loan repayment? (I thought it was the date the loan was issued from the plan, but it seems not everyone is in agreement on this point....)

Assuming that a 5 year loan is amortized from the loan distribution date so that it is scheduled to be repaid before the fifth anniversary of the loan issue date, what result where the participant has missed loan repayment(s) and has not made up the missing payment(s) by the end of the 5 year period? (Assume no leaves of absence.) Is the outstanding amount plus interest deemed distributed? Or is the entire original amount of the loan deemed distributed because it was not repaid within 5 years, even though it was scheduled to be repaid within 5 years?

Hurricane Irene Relief

Does anyone know if the 2010 company tax filing deadline was extended and as a result the time in which a company could make a contribution for 2010?

Everything about this seems wrong to me, but the "trust company" says they do it all the time...

S-corporation sponsors a leveraged ESOP. When the last batch of stock was sold to the ESOP, there was a "price protection" agreement put into place (outside of the ESOP plan document) that said for any participant who terminated employment and received a distribution within 3 years of the sale, that the distribution would be based upon the higher of current FMV at the time of the distribution/liquidation of the shares by the ESOP, or the price per share as of the date the stock was first sold to the ESOP. The purpose, apparently, was to protect retirees in the short term if the stock dropped.

Is this a common thing?

Beyond that, the PLAN DOCUMENT makes no provision for this higher "price protection" distribution. The trust company is asserting that:

1. The Employer can dump into the plan the difference between the current FMV. This will NOT be treated as an "employer contribution" and hence not allocated to all participants. Whether the Employer intends to deduct it or not I couldn't say.

2. The ESOP can then distribute the full "price protection" amount and it will ALL be an "eligible rollover distribution."

They further assert that they have worked with "many top ERISA experts" and have "never had a comment against it."

I'm completely baffled as to how they arrive at their conclusions. But since I'll be the first to admit I'm no ESOP expert, I thought I'd check to see if in fact these are common and accepted practices, and if so, what citation or citations might support it?

When preparing the 404a-5 notice, do I have to list the exact amount of fees that can be charged to the plan? My client is currently paying all the fees outside of the plan so when I list the fees can I just say "The plan may incur certain administrative and operating expenses each year. These expenses are for the following services:

Legal

Accounting

Recordkeeping

or does it have to be

Legal - $5,000

Accounting - $3,000

Recordkeeping - $2,500

Thanks

Partner 1 of a partnership wants to sponsor a plan but Partner 2 does not want to contribute at this time (they own the company 50/50). There are no other employees. Having Partner 2 sign a waiver of participation may not be the best option, as Partner 2 may want to start contributing somewhere down the line and such waivers I believe are irrevocable. Would it be acceptable for the plan doc to just use the name of Partner 1 as the definition of 'Eligible Employee', and then amend the definition once Partner 2 is ready? Thanks.

We have a client that adopted a Non-ERISA 403(b) plan in 2011. Employer has now advised us that their intent was to establish plan subject to ERISA. Understanding that there is a document failure in the absence of provisions relating to ERISA, as well as a failure to perform non-discrimination testing and 5500 reporting, can the plan be amended retroactive to 2011 to address the ERISA omission?

In a Church Related Organization, have a Nun that has taken a vow of poverty. She "earns" over $150,000 for which she passes on to the convent. This is with respect to a 403(b) plan that is subject to discrimination tests since it is not a 3121(w)(3)(A) or (B). Should she be included in the ACP test as an HCE? If is included, seems as though her not deferring anything, and therefore not receiving any match, would actually benefit the other HCE's by having a higher ACP?

Are these effective yet? I'm not seeing it in any of the disclosures. I have to assume that it is just not effective... I love that the disclosures must include a graphical representation of the glide path. Very very realistic.

The following is from the Sungard write-up of these proposed regs. They have not released anything on these yet.

This is the tenth in a series of Technical Updates regarding the participant fee disclosure regulations published in October 2010, and generally effective for plan years beginning after October 31, 2011. This Technical Update explains the proposed regulations relating to target date funds (TDFs) and to qualified default investment alternatives (QDIAs) published in November 2010, and how these proposed regulations will impact the participant fee disclosure regulations.

Q-1: What is the proposed effective date of the proposed regulations discussed in this Technical Update?

The DOL has proposed that the regulations will be effective 90 days after publication in final form.

Filing a 5310 for on a plan that was set up through a volume submitter. Question 3© of Form 5310 asks if the plan has previously received a Determination Letter? I have seen some answer this yes and others answer it no when the plan has only relied on the Opinion Letter issued to the volume submitter provider. I'm thinking when the 5310 asks about a DL, they mean an individual DL for that particular plan and so this should be answered no. Is there a correct way to do this. The instructions do not go into this sort of detail. Thanks.

I was tracking down the references and something is not clear for me. It appears that the amendment of 4006(a)(3)(E) refers to the standard calculation of the variable premium and not the alternative calculation. The alternative calculation is mentioned under the PBGC regulations only and it seems that you can use the reduced funding target under MAP21 if you elect the alternative method of the variable premium calculations.

What am I missing?

I have a client that gave a $500 employer contribution to employees. I am trying to figure out which plan year it belongs to. The client is insisting it is a 2010 contributon, but the client gave the $500 to employee who were hired in Jan. 2011 as long as they were employed as fo 1/24/11. My thinking is the last allocation condition was int 2011 so it would be a 2011 plan year contribution. Is it possible it is both a 2010 and 2011 contribution. Because they also gave the contribution to some employees who termed in late 2010. I am not comfortable calling in it a 2010 Plan Year contribution since at least some of the EEs were not even hired until 2011.

Any thoughts would be greatly appreciated.

I have a terminating PS Plan with a distribution of $200 and a few others a bit smaller. These participants never returned their paperwork but I know their addresses, emails,etc. On these small amounts must we produce a 1099r and should we withhold, and if so how much, 10 or 20%. I ask this question as the CPA said retirement plan distrbutions under $600 didn't need either. Thanks in advance.

We've had this issue arise a few times over the years and I was wondering how others handle the situation.

Employer/Sponsor approached with questions about the pension plan, either general or participant specific. Employer passes the participant on to the TPA rather than calling TPA himself.

In the past, we have told terminated participants that they should be asking their employer and if he does not know, he should come to us because he is the trustee and only he can give out this information for privacy issues.

Other TPAs I know have told participants that their E&O policy only allows us to deal directly with the Employer/Trustee and all questions must go through the Employer.

An insurance broker I deal with is telling me that this is a HIPAA issue and there is a $1000000 fine for giving out any information. Sounds good, but I don't think this applies to the situation.

What do you think and how do you handle situations like this?

We are doing a 401(k) plan audit and the document signature pages can't be found. Last signed document is 2004 with EGTRRA amendment. what is best solution? Plan is operating properly.

An LLC with 4 owners wants to stop Safe Harbor Match contributions for the owners only, mid year. Is it ok to amend the document to stop SH Match for owners? Also, will the plan have to be ADP tested if they stop SHM for the owners?

A 401k PSP currently has a pro-rata PS allocation method with a 500 hours allocation condition (no other conditions). They would like to amend the plan to be a new comparability with each participant in his own class so they can max the owner while not having to give 13% to all employees. Their current adminsitrator is telling them they can do this at any time this year "since the profit sharing contribution is discretionary". However, we have always operated under the premise that once the participants have accrued a benefit under the exisiting allocation method (500 hour requirement, which they have all obviously met already), then they would not be able to amend this method to provide different groups of employees with different %s of PS. They would need to wait till 1/1/2013 for this to take effect. Am I missing something? Or is the current amdinistrator just giving out bad information?

If a plan is in termination process, resolution adopted but payouts have not occurred must they provide the participant fee disclosure notices? At what point does this end?

How exactly is compliance with the distribution timing rules under IRC 401(a)(14) and 409(o) coordinated? Does one have precedence over the other? Or must you closely examine which potential deadline for each individual participant in an ESOP to ensure the rules are complied with? Is that even possible?

Thanks, and citations to any official guidance are very much appreciated!

I am new to working with Unions, but have had this situation arise and I am unsure how to proceed.

We have a union contract that was just signed and it provides that all union members that were participating in the Defined Benefit Plan be awarded a lump sum contribution (10K – 25K) to be deposited into the 401(k) Plan. This was a negotiation to, among other things, freeze the DB Plan. We are ready to move forward on this contribution, I am just unsure what type/source it should be. Off the cuff, I am thinking that it must be 100% vested and should be a QNEC. Does anyone have any thoughts on this? Any assistance would be great.

The new reporting requirements under Schedule R of the Form 990 are creating problems for many multiemployer health and welfare funds with a significant number of contributing employers. As I undertstand the new requirements, a health and welfare fund established as a VEBA must now disclose certain information about all of its contributing employers such as the state of domicile, corporate structure, etc., on Schedule R. This requires funds to contact all employers to insure they are reporting correct information. The VEBA rules are becoming more complex and burdensome. Does anyone know if these trusts can be set up as tax exempt under another section of the code?