A 403(b) plan failed to follow participant salary deferral agreements. Is this eligible for a VCP submission? I assume this would fall under the 5.02(2)(ii)(a)(xii) of 2008-50 as a "failure to satisfy the applicable requirements under 403(b)". Do you think I'm wrong about that? What about the corresponding matching contribution that should have been made? I'm concerned that the IRS won't rule on the matching contribution element since it doesn't appear as though the failure to make the full match in accordance with the plan's terms is eligible for VCP for a 403(b) plan. Would the IRS rule only on the "missed deferral opportunity" correction?

A non-electing church 403(b) plan defines compensation as W-2 Wages. Ministers , who receive housing allowance, contribute all or part of this type of compensation to the plan on a pre-tax basis. Minister defers salary, but only determine at end of year how much salary was used for housing allowance. I am not sure this is allowed. As an alternative, could the ministers contribute housing allowance to plan on an after-tax basis? Rationale is that includible compensation doesn't include housing allowance for purposes of caclulating 415 maximum limits to the plan - i.e., the lesser of 100% of compensation or maximum dollar amount permitted under the Code ($50,000 for 2012). Treasury Reg. § 1.415-2(d)(3)(iv) states that the term "compensation" does not include items such as "opther amounts which receive special tax benefits...". Therefore, housing allowance is not included in the annual limit, since it is an after-tax allowance. A minister could contribute the hosuing allowance on an after-tax basis if his pre-tax salary exceeds the 415 limit and his pre-tax plan contributions do not meet the $50,000 limit.

Also, when retired ministers take a distriubtion, the total distribution is subject to 20% Federal Income Tax Withholding and applicable State Income Tax Withholding, since it is not know what portion of the distribution is attributable to the tax free houswing allowance, Box 2b of Form 1099-R - Taxable Amount Not Determined is checked. This procedure allows the retirees, when filing taxes, to exclude from income distributions from the plan that are designated as housing alowances.

I am concered about participants deferring on the housing allowance and withholding 20% on the distribution. What do you think?

Here's a wierd one. For some complex reasons, a nonprofit client wants to implement an arrangement that will provide a former employee with monthly payments for the remainder of her life, but only after she reaches age 80. No death benefit. We are considering purchasing a deferred annuity, but the client would prefer to make payments directly, if we can structure the arrangment to satisfy 457(f). So here is the question:

Could a requirement to attain a certain age ever be a valid "substanial risk of forfeiture"?

My thoughts are, theoretically, yes. For example, if you wouldn't get a payment unless you attained age 120, I would say that the risk of forfeiture is nearly certain. Age 80 is clearly more troublesome, but could there be some reasonable methodologies to prove that the facts and circumstances support a SRF? When would it lapse?

I'm curious to see what creative thoughts you might have on this...

I work in behalf of a plan that uses the old PBGC interest rate basis. Last year the immediate rate was 2.25%; this year it is 1.00%. 1.00% appears to be about 200 basis points less than the interest rates inherent in insurance company annuity purchase rates.

Can anyone relate the process by which the PBGC determines the immediate (private sector) lump sum interest rate?

If an employee waives coverage under his/her employer's health plan, is the employer required to have the employee attest to having other coverage?

DB Plan (one person) was originally effective 1/1/2011, BOY valuation. Average compensation is being calculated at 1/1/2011 using K-1 compensation for a sole prop for the years 2008, 2009 and 2010. Normally the compensation for valuation purposes is adjusted for contributions made and 1/2 SE tax. Obviously in the years 2008 through 2010 there were no contributions because the plan did not exist. Does the compensation for those years need to be adjusted for 1/2 SE tax? Or can the Average Compensation for the 1/1/2011 valuation be calculated using the net income from Schedule K-1 with no adjustments because there was no plan for those years?

I searched the threads and don't believe I've seen this question asked. I also don't find an answer to my question on the IRS website.

Situation:

Company A sponsors a SIMPLE IRA

Company B sponsors a 401(k)

Effective 09/01/2012, Company A is merging into Company B and thus Company A will no longer exist as an entity onto itself.

The desire by the parties involved is that the SIMPLE IRA can terminate on 08/31/12 (the merger date) and that the former employees of Company A will then be eligible to immediately contribute to the 401(k) plan (the 401k provisions will be analyzed to be sure this can be accomplished from that end).

The problem/question - I can't find any guidance that addresses this situation. Every source indicates that without exception SIMPLE IRA plans must be maintained for the full year before terminating. It seems odd that the new entity would have to somehow administer/sponsor the SIMPLE IRA through the end of 2012.

The merger date is quickly approaching. Any advice or thoughts would be most appreciated!

An employer sponsoring a self-insured plan offers two health insurance packages, one for highly compensated individuals and one for non-highly compensated individuals. (The example is simplified from the actual situation and is hypothetical.)

HCIs can choose among an HMO, a $400/$800 deductible PPO, a $1,000/$3,000 deductible PPO, and a $3,000/$6,000 deductible HDHP.

Non-HCIs can choose among a $0 deductible PPO, a $500/$1,000 deductible PPO, a $1,000/$3,000 deductible PPO, and a $3,000/$6,000 deductible HDHP.

Other than the deductibles, the benefits offered under each of the options is the same.

Does this arrangement violate the benefits portion of the self-insured medical plan nondiscrimination tests because the benefits offered to the HCIs are not "identical" to those offered to the non-HCIs? (That is, non-HCIs cannot elect the HMO or the $400/$800 deductible PPO.)

Thanks!

We are trying to design a 401k w/ x-tested PS for Employer A, which is an LLC owned 60% by Employer B and 40% by Employer C. B and C are also LLCs. Employer B has three equal partners and Employer C has two equal partners. The 5 respective partners of Employers B and C each recieve K-1 income from their respective employers. None of them receive income directly from Employer A. Can the 5 partners be considered employees of Employer A and be included in it's 401k/PS plan based on their K-1 income from Employers B and C?? Thanks.

I believe employer contributions to a profit sharing or 401(k) plan must be funded in cash correct?

In other words, if a company has non-related stock (basically an investment), they cannot use that investment to fund the plan correct?

Thanks

A small 401k plan is not sure if all the Form 5500 filings are up to date. I searched for filings on the EFAST2 website with no results. I then searched FreeErisa.com and the latest filing I found was 2001 & 2002. The Plan Sponsor does not have copies or any returns for me to look at and they were using bundled TPA services with a provider that is no longer in the business. I feel pretty confident now that 2002 was the last filing but is there a way I could be more sure since I guess the tax id could have been incorrectly entered preventing my search from locating the filings?

It is my understanding that DFVCP is available for all missed filings as long as there have not been any notifications of late filings from the DOL/IRS & accordig to the Plan Sponsor there has not been.

Anyone have experience correcting 10 years of late 5500s and if so any advice?

Can a government 457(b) Plan also administer a 403(b) plan? The 403(b) plan would only accept contributions from eligible employees of the public sector employer.

What are the tax implications of moving a life insurance contract out of a qualified plan (profit sharing) while the insured/participant is still living? Thanks for any help...

Employer wants to amend a 401(k)/PS plan to allow for in-service withdrawals of profit sharing balances at age 50. However, the demographics would only allow 3 people to take advantage of this, 2 of which are HCE's...the remaining NHCE's would not have access to this benefit and the provision would fail the general non discrimination test (70%). The HCEs are ages 53 and 52, the NHCE over 50 is age 58. Seems it would be better to amend the definition of Normal Retirement Age to age 55 and allow these withdrawals upon attaining NRA - the 58 year old NHCE is really the one who needs the non hardship withdrawal. Comments anyone?

We are a TPA for many Plans that have only Self-Directed Brokerage Accounts (SDBA). Almost all are places with one advisor and is like a "retail" account. Q&A 39, which was just added, now says that these investments are not DIAs and therefore do not require the fund expense information in the annual notice. HOWEVER, there is still some other information that must be included (like website, 800 number, etc for making trades, info about SDBAs and other things). Does anyone have a template of what these 404a5 Annual Participant Notices should look like for SDBA-only Plans?

Plan doc has each person in own his category. This year cross testing won't work. Owner's comp is around $160,000 and the employees are around $35,000. When testing on an allocation basis, can I impute disparity at the $40,000 level instead of the taxable wage base. In other words can I get the same result as if I had no categories and just did a simple integrated calculation.

Anyone had a situatiuon where a client (a non-profit in this case) funds their "profit sharing" each pay-period in a 401(k) plan, but would like to change the rate mid-year? There are no allocation conditions.

My concern is that everything in the document about allocating profit sharing uses annual language. I'm on the EGTRRA Corbel Prototype (I know, I know, we're getting the VS for PPA--so we can make amendments and then argue that they were indeed minor).

If anyone has thoughts or can suggest a workaround I would appreciate it. For example, would a board resolution do it?

If a cash balance plan has a variable interest crediting rate or has changed from a fixed to a variable rate, is it required that accrued benefits be valued for purposes of computing annual PBGC premium liabilities by projecting account balances to ARA using an average of the last 5 years of crediting rates? Opinions please.

I have a defined benefit plan on Relius. The Plan year changed from 1/1 to 7/1. Does anyone know how I can create a new Plan Year that uses the 7/1 date rather than the 1/1 date? There are over 350 participants and I do not want to re-enter the employee information.

Any thoughts would be helpful.

Can anyone recommend a free resource to use for benchmarking fees under the service provider disclosures? Has anyone benechmarked what they are paying? Any thoughts or suggestions would be appreciated? Thanks.