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?

Benefits that are paid direct to IRS in response to a levy, are they reportable on 1099-R?

Small PSP plan and the owner has lent $30k to his son from the plan. Naturally I assumed this was a prohibited transaction; but was told that the so long as the loan falls within the loan guidelines for the participant himself, in this case the owner, that the loan is allowable. Can anybody verify this one way or another? Thanks

My client has a safe harbor plan (3%NEC) with a New Comp profit sharing allocation. In the past, the client defined the allocation groups as: Owners/Officers and All Others. This year, they decided to have three allocation classes: Owners/Officers, Other Employees who made elective deferrals, all others. They will pass coverage at 100% for the P-S allocation due to the 3% SHNEC. My questions are as follows:

1) Can the plan sponsor define the allocation group dependant on whether or not the participant chose to make an elective deferral? (I think that the answer is yes, but I wanted to confirm.)

2) If they are able to define the groups in this fashion, does not matter how they pass the 401(a)(4) testing? Ratio vs. ABT? (I think that they can pass in any fashion, but wanted to double check.)

We are a small TPA firm and have had several audits with IRS over the years and have always been able to conduct the audit at our office. I know that the auditors are supposed to at least visit the sponsor's place of business, but now an auditor is telling us that they (IRS) are required to do the audit at the sponsor's office and can no longer meet at the TPA. Has anyone else experienced this "change"?

Company has a 125 plan with FSA; they recently added a DCA component. I am told they are in separate buckets so the employees can take advantage of the contribution limits for each separately.

Their payroll provider says the DCA contributions should not be included in compensation when determining the salary deferral amount. I cannot find anything to support that. It's my first time dealing with DCA accounts; are all DCA Section 129? Are all Section 129 excluded for plan purposes (no reference in documents to 129)?

Example:

Salary: $105,000.00

DCA contributions: $5000.00

Deferral Election: 6%

Payroll company says deferral should be calculated net of DCA contributions, or $6,000.00 (instead of $6300, based on gross pay).

Thanks in advance!

An owner of a s-corp would like to purchase private shares held by an outside party in his company and then title the shares under the name of the plan. I do not think this can be done based upon what I have read which states ownership of S-Corp stock is prohibited in a qualified retirement plan other than an ESOP. What would happen if the owner set up a LLC? Could the shares be bought by the LLC and then transferred to the participant's account under the s corp plan?

Thanks for any input!