A participant missed payments on his participant loan, but did not receive any notification that his loan was delinquent and needed to be brought current before the end of the cure period.

Can the participant be permitted to cure now, even though the cure period already ended?

Or is there no alternative to deeming the loan distributed, even though the participant was never informed of the delinquency and never given a chance to cure?

Our IT department is trying to roll out a new cellphone (smartphone) plan to the employees. They are considering two options for reimbursing the employees.

1. Continue with providing company issued phones where the company pays for the phone and monthly network (call and data usage) service fees. Under Section 2043 of the Small Business Jobs Creation Act of 2010 (Notice 2011-72) the company would not have to "hard review" and document business vs. personal use of the device.

2. Institute a Bring Your Own Device (BYOD) environment where employees bring what their own personal device (ie, iPhone, Andrio, Blackberry) and negotiate their own data plan with the provider of their choice. The Company would then provide the employee with an allowance to cover the business use of the device each month.

Is anyone using option #2 above and if so, how is it being administered? Option #2 would take the responsiblity of owning phones and championing certain devices over others out of the Company's hands and putting it into the employees. Unfortunately the taxing of this plan would seem to be administratively burdensome.

Comments?

Thank you,

I don't see it possible, but I thought I would ask. A small 403(b), non church, 10 participants maintains a 403(b) that currently funds a 6% nonelective. They are considering greater employer funding for employees who have been working longer. That would be discriminatory under the 403(b) regs, yes?

We are working on a plan termination and there is one participant left to pay out. THis is sort of a unique situation, here's the background.

The plan belonged to a restaurant. THe restaurant burned down about 15 years ago. Then the owner died and the plan was forgotten. The owner's wife became aware of it and contacted us last year to help her with the termination. We brought the plan up to date, and have paid out all the participants except for one. This remaining participant has a balance of about $20,000. They have tried to locate him, but keep hitting dead ends. Here's the real problem, in addition to not having a last know address, they do not have this guys social security number. They can't open an IRA for him without the SSNO. So, does anyone have any suggestions on what to do with his money so the plan can be closed?

thanks

We submitted a Plan for a Determination Letter. The IRS agent sent us an information request asking for more information and a few plan amendments. Some of the information they're saying is required in the Plan is information that we do not feel is required. In other words, we, in good faith, disagree with the IRS.

I spoke with the IRS agent and he said that there is a Rev. Proc. out there that says that failure to amend because of a good faith interpretation that certain provisions aren't applicable will get you "off the hook" from VCP fees.

I have looked and looked for that Rev. Proc but have found nothing. Has anyone else ever run into this situation?

Hello helpful people,

My spouse recently passed away very quickly following discovery of stage 4 metastatic melanoma. Although we were together for 15 years, we were married very recently, so I am only now learning the full extent of his various investments. In addition to being his surviving spouse, I am trustee/executor.

He has a 403(b) annuity policy that was issued through a former employer somewhere around 1983. The beneficiary designation is his ex-wife, their biological son and a stepson. Beneficiaries were listed by name only and it doesn't look like the company has any other identifying information such as relationship or social security number. In fact, they are looking to me to provide contact information. I have several questions and, so far, the company has been unable to provide me with answers.

Regarding spousal consent, they will only tell me that, "We only pay named beneficiaries." I asked if the policy is governed by ERISA and the agent didn't know. He told me that he would ask his supervisor and called me back the next day to say that she said to tell me, "We only pay named beneficiaries." He still couldn't tell me if ERISA applied, or if non-ERISA, if community property law applied. (I am in CA, but might not have been married long enough). I have asked to talk to someone who can answer my questions, but so far haven't heard back. Is there anyway that this account could be not governed by either ERISA or state law? Is there a way for me to find out? Although my husband neglected to change the beneficiary, I know he would not want his ex-wife to benefit from his death.

The second issue relates to him not using the legal names of his sons. For his biological son, I don't expect a problem (he was listed as Andy rather than Andrew). However, the stepson was listed with my husband's surname. At the time he was named as a beneficiary, my husband was in process of adopting him. Then the former wife decided to stop the adoption. So the boy's name was never changed and he has never legally used my husband's name as his own.

I welcome advice on how to deal with either/both of these issues.

Thanks,

Pam

a company has a SIMPLE IRA plan in 2012.

my understanding is that if company wants to implement a qual plan they will have to terminate simple plan in 2012 and establish qual plan in 2013?

is my understanding accurate?

thanks

We have a client that sponsors a small 401(k) plan.

Back in early 2010 they mistakenly deposited 401(k) profit sharing contributions to SEP accounts. They had not contributed to the SEP since 2006. They started the 401(k) plan in 2008.

I would think they should be able to write the mutual fund company a letter indicating that these were mistaken deposits and to please transfer these amounts to the 401(k) plan. It turns out that they have the same fund company for the 401(k) plan.

Does anyone agree/disagree?

Thanks

DC plan covers only two owners (S Corp.) Plan uses DIAs. Is the plan subject to the disclosure regs? I had heard in a webcast that the regs are not applicable to plans covering only owners, but perhaps I'm not seeing that in the regs with respect to this type of situation. Thanks.

We learned that a plan made errors in calculating matching contributions over a 3 year period. For two of the years, the matching contribution exceeded the amount that should have been contributed under the terms of the plan, and not enough of a match was made in the 3rd year. However, the participants received more than they should have if you add all three years together. Do we have to make a corrective contribution for the one year that participants did not receive enough or can we simply say that they received more than they should have over the course of the 3 years and not have to make a contribution for that 3rd year?

I have a company that has 2500 regular payroll employees. They also have 1200 "leased" employees. These "leased" employees have been working for them for years and the turnover rate is very low. So they meet the definition of "substantially full-time for at least one year".

The leasing company provides benefits to these employees. The leasing company has its own plan.

I am trying to determine whether or not they need to be considered for our coverage test. If I count them as non-excludable, not benefiting, my plan fails the ratio test. My plan is on a prototype document which has "fail-safe" language so the Average Benefits tests is out.

I know the definition of leased ees is tricky, but they sure seem like leased to me. Does the fact that the leasing company has its own plan make a difference.

Any guidance would be greatly appreciated!

The owner of a TPA firm found an anonymous note several months ago that indicated someone knew of the affair being had between the owner and an employee. Both the owner and the employee are married, but not to each other. Both have kids, but not with each other presumably. The note indicated that they would be letting their spouse's know of the affair, or maybe it said it would let their families know - I haven't actually seen the note. Each employee present at the time the note was found was interviewed but nothing could be determined.

A short while later a forceful e-mail was sent out by the owner, rather bully-like in tone. About the same time, one of the most trusted employees was mysteriously "let go" and the e-mail explained it was due to budget reasons, but then they were rehired a few days after that.

The owner claims the note was shown to the police but with no crime, they aren't doing anything.

Since then, the owner claims to have contacted attorneys and now a private investigator. Only guessing here, but probably did this using company money - glad I'm not a shareholder.

The owner now wants to begin the healing and the cure is to fingerprint every employee in the office. Maybe the owner perceives this is a threat to the business, not just as a personal problem.

When the private eye shows up to fingerprint everyone, what do you suggest these folks do? This just doesn't seem like a good idea to line everyone up and print them like criminals.

A retired participant was receiving a monthly benefit of $1,000 payable as a joint and 50% survivor annuity. The participant died 1/15/2012, but the plan sponsor did not become aware of it until 4/15/2012. For the three monthly installments paid between the participant's death and the plan sponsor becoming aware of the death (2/1/2012, 3/1/2012 and 4/1/2012), benefit payments of $1,000 continued to be sent to and were credited to the (deceased) participant's account (either by direct deposit or someone cashing a paper check). Commencing with the 5/1/2012 installment, payment to the participant ceased and payment of $500 to the survivor commenced).

Had the plan sponsor known of the death in a timely manner, the $1,000 payment to the participant would have stopped after the 1/1/2012 payment and, commencing with the 2/1/2012 payment, the survivor would have received $500, payable for live.

Due to the delay in notification, the plan ended up paying out $1,500 too much over the 3 month period (it paid $3,000 too much to the participant and $1,500 too little to the survivor).

One way to remedy the overpayment (perhaps the technically correct approach) would be for the deceased participant's estate to repay $3,000 to the plan and for the plan to pay the survivor $1,500 ($500 per month retroactive to 2/1/2012).

I am wondering if anyone has had experience with alternative solutions, such as reducing future payments to the survivor. For example, no payments would be made to the survivor until in 8/1/2012. If you have used this offset approach, do you limit it to situations where the survivor was married to the participant at the time of death?

A controlled group situation will become a multiple employer situation. The plan is a cross-tested profit sharing plan. The question is can the employers be tested separately as if two distinct plans? Thanks.

IRA owner's portfolio includes IRA ($100,000) and non-IRA ($200,000) funds. Investment advisor's fee (say 1% of the entire $300,000, or $3,000) is paid from IRA assets even though only $1,000 of the fee is allocable to IRA assets.

Any argument that this isn't a PT? Logically, it doesn't make sense to tax the entire IRA, because the owner could have taken a distribution of $2,000 (or perhaps more to cover tax withholding), and then paid the fee. Could the $2,000 be viewed is a taxable distribution to the owner? Citations appreciated.

Plan doc provides nonelective contribution by payroll. Employer makes miscalculation and does not withhold 401(k) deferrals or make nonelective contribution for a couple of employees. Error is discovered 3 months later.

Employer is restoring lost earnings on the 401(k) deferrals. Do they need to restore lost earnings on the nonelective contribution? Thanks for your replies!

http://www.dol.gov/ebsa/regs/fab2012-2R.html

From Today's Benefits Link. And just after I talked about this for half an hour in a training, and just after I finished my paragrpah in my cover-letters explaning how this was a big problem.

From BL:

The DOL has withdrawn Q&A-30 from Field Assistance Bulletin 2012-02, replacing the FAB with another bulletin that contains new Q&A-39, which does not include the former Q&A-30's requirement that the plan provide disclosure of costs for investments through brokerage windows that were not designated as "designated investment alternatives" but that were chosen in fact by specified minimum numbers of participants.

Here is the text of new Q&A-39:

"A plan offers an investment platform that includes a brokerage window, self-directed brokerage account, or similar plan arrangement. The fiduciary did not designate any of the funds on the platform or available through the brokerage window, self-directed brokerage account, or similar plan arrangement as 'designated investment alternatives' under the plan. Is the platform or the brokerage window, self-directed brokerage account, or similar plan arrangement a designated investment alternative for purposes of the regulation?

"A39. No. Whether an investment alternative is a 'designated investment alternative' (DIA) for purposes of the regulation depends on whether it is specifically identified as available under the plan. The regulation does not require that a plan have a particular number of DIAs, and nothing in this Bulletin prohibits the use of a platform or a brokerage window, self-directed brokerage account, or similar plan arrangement in an individual account plan. The Bulletin also does not change the 404© regulation or the requirements for relief from fiduciary liability under section 404© of ERISA or address the application of ERISA's general fiduciary requirements to SEPs or SIMPLE IRA plans. Nonetheless, in the case of a 401(k) or other individual account plan covered under the regulation, a plan fiduciary's failure to designate investment alternatives, for example, to avoid investment disclosures under the regulation, raises questions under ERISA section 404(a)'s general statutory fiduciary duties of prudence and loyalty. Also, fiduciaries of such plans with platforms or brokerage windows, self-directed brokerage accounts, or similar plan arrangements that enable participants and beneficiaries to select investments beyond those designated by the plan are still bound by ERISA section 404(a)'s statutory duties of prudence and loyalty to participants and beneficiaries who use the platform or the brokerage window, self-directed brokerage account, or similar plan arrangement, including taking into account the nature and quality of services provided in connection with the platform or the brokerage window, self-directed brokerage account, or similar plan arrangement."

A profit sharing 401k plan requires 1000 hours and last day for an allocation

in order pass a4 they want to give an allocation to an employee with less than 1000 hours and to another employee with less than 500 hours.

i recommended to 401k consultant to prepare an 11g corrective amendment.

consultant says that plan provides fail safe provision only if employee has at least 500 hours.

i looked at plan fail safe provision and saw a section that does not require 500 hours.

Questions.

1. the description of fail-safe allocation only references 410b. so does this mean that it doesnt even apply for an a4 allocation?

2. if it does apply then would consultant's comment be correct?

3. and if it does apply, does fact that there is a section that apparently does not require 500 hours enable such a corrective amendment to employee w less than 500 hours?

thanks much

If an original 8955-SSA was never filed, but it was discovered later that a participant needed to be reported, can an amended filing be submitted? Does anyone have any experience with doing so and if any errors occurred with the filing?

Hi all,

I am in the process of creating a Wrap (Document and SPD) for a client. I believe I have everything covered except the requirement to explain how insurer refunds (dividends, dmutualization, etc) are allocated. I understand this differs from carrier to carrier, but I am just looking for sample language for a jumping off point.

Any help or pointing in the right direction would be greatly appreciated.

Thanks