A defined contribution plan wants to merge with a 401k profit sharing plan in which both the employer and employees can contribute. If the two plans merge, the employees will no longer be allowed to contribute. Is there any kind of prohibition on this type of merger? Thanks very much.

I have seen some posts on this topic but many of them are several years old. The RBD for a participant who is not a 5% owner is April 1 of the calendar year following the later of the year in which a participant attains age 70 1/2 or retires. Under this particular document, post-SBJPA, the client elected to provide the option for the participant to elect to receive distributions upon attaining age 70 1/2 or to defer receiving the distribution until actual retirement. The effect of this provision is that the participant who is 70 1/2 has the right to receive an in-service distribution.

My questions are 1) do you calculate this distribution as you would an RMD? 2) Is it taxable as an in-service distribution or as an RMD? 3) Once the participant makes this election is it permanent or is it an annual election? I've found nothing in my doc to provide clarification on these items.

Any insight would be greatly appreciated. Thanks.

Hello.

It is discovered that the client did not withhold salary deferral contribuitons for vacation pay period. Auditer has indicated that the client needs to make up for the missed deferrals and missed match that would have been attributable to the deferral.

We have been asked to calculate the lost earnings. The auditer states "If missed salary deferrals are related to vacation pay received during the year, someone will need to review the payroll reports to determine the date on which the vacation pay was paid. If that is too time-consuming, a safe (easy) alternative would be to calculate lost earnings on all employee deferrals from the first day of the related year". Client would like to use this 'safe harbor' date. Can I get some others feedback on this?

Also, do I need to calculate lost earnings on the Employer Match. The client usually paid the match to the accounts quarterly.

Plan Sponsors should have (hopefully) received the service provider fee disclosures by now and are supposed to document their review of these disclosures for reasonableness. This may be a time-consuming and difficult task for many (all?) of the Plan Sponsors.

I have only seen a couple of independent benchmarking services out there, and that would add yet another fee for Plan Sponsors. Just curious what others are doing, if anything, to assist the Plan Sponsors in this review?

Thanks!

I have a question on this. In a participant directed plan which has a brokerage window, assuming there is no specifically designated investment manager, who has the voting rights on stock purchased through that window? The Trustee because it is still a plan asset? Or the participant because the Trustee does not exercise "full management responsibilities?" I incline toward the former, particularly based upon DOL interpretive bulletin 08-02, but I'm not certain. A "standard" plan provision below:

To vote upon any stocks, bonds, or other securities; to give general or special proxies or powers of attorney with or without power of substitution; to exercise any conversion privileges, subscription rights or other options, and to make any payments incidental thereto; to oppose, or to consent to, or otherwise participate in, corporate reorganizations or other changes affecting corporate securities, and to delegate discretionary powers, and to pay any assessments or charges in connection therewith; and generally to exercise any of the powers of an owner with respect to stocks, bonds, securities, or other property. However, the Trustee shall not vote proxies relating to securities for which it has not been assigned full investment management responsibilities. In those cases where another party has such investment authority or discretion, the Trustee will deliver all proxies to said party who will then have full responsibility for voting those proxies

Can Auto Increase (increasing participant deferrals amounts each year up to a specified percentage) being implemented and applied to participants who were not automatically enrolled into the plan?

One of the documents we use only allows for Auto increase if the plan uses auto enroll. The document is not set up to allow for the use of AI without auto enroll, and even then, auto increase is limited to only the participants who were auto enrolled into the plan...

can AI can be used without AE and can it be applied to all plan participants?

Thanks

Let's say sponsor does not comply with these rules, and they send out incomplete information, or they don't do anything.

1) Is this an explicit fiduciary breach subject to the 20% penalty?; or

2) Have they simply lost their safe harbor.

I am looking through the brokerage window disclosure requirements, and I fear that "FBO, Inc." does not have these disclosures.

Does anyone have a sense for whether or not participants will be receiving those disclosures from any of the FBO providers (i.e., fees, commissions, trading charges, account maintenance, etc), perhaps incorporated into the statements? Or perhaps a pdf document available for download?

Should a plan be recording an estimated receivable on its financial statements for withdrawal liability assessed in the plan year? I'm not sure how this would work. Plans assess withdrawal liability during the plan year, but often times it is uncollectible because of employer bankruptcies, closings, etc. Does anyone have any insight on this?

I'm dealing with a 401(k) plan sponsored by an entity with multiple wholly-owned subsidiaries. The subsidiaries have their own employees. The parent entity wants to let its subsidiaries' employees participate in the parent's 401(k) plan. Are subsidiaries' employees eligible to participate in a parent's plan? Can anyone point me to a code cite or reg? Thanks!

I recently received a census report that included an employee that was married to an owner of the same sex. I am curious whether ERISA recognizes the marriage and if family attribution would apply to the non-owner employee?

The two were married in Connecticut but live in Florida, if it makes a difference.

Is anyone offering insurance benefits to statutory non-employees? My company pays licensed real estate brokers via 1099 and wants to offer them insurance benefits. Everything I have come across, says that shouldn’t be done. But most of the C-suite came from large real estate companies where this was done. I have asked them for contact information, but while waiting for a deep freeze, I decided to ask the discussion board. Any assistance would be greatly appreciated.

Thanks!

A 401k participant steals money from the plan sponsor and is then terminated. The participant agrees to use their 401k account balance to pay back the sponsor. Can a court order the plan to pay the distribution directly to the sponsor? Can the plan pay the participant's distribution directly to the plan sponsor? If so, do we withhold taxes/issue a 1099R?

Just had a question about salary deferrals for PA residents. Have a PA resident whose employer is in DC. Apparently PA salary deferrals are subject to State tax but not Federal. How does the employer handle that when withholding and submitting contributions to the carrier?

Thanks

LLC taxed as partnership

PBGC covered

Contribution made in year of termination is exactly equal to minimum funding under 430. This contribution exceeds 100% of earned income. Can excess be deducted in year or years after year of termination?

The plan has forfeitures that far exceed current year expenses. Is it permissible to pay the fees to the TPA and then use them up over the next 3 or 4 years? My answer is no, but I was told to find out for sure.

If a person is going to be a fiduciary investment adviser to a plan under ERISA, could they do so and not be an investment adviser representative? This question stems from a 408(b)(2) notice I saw from a registered representative (who is not an IAR) that disclosed that the rep was providing fiduciary investment advice under ERISA, but that such advice was "solely incidental" to the brokerage services provided. Since incidental advice falls under an exemption from registration in the 40 Act, it seems possible for someone to provide fiduciary advice under ERISA without being overtly licensed to do so, which doesn't feel right to me.

If a plan sponsor, or other named fiduciary, would select an individual who wasn't an IAR to give investment advice, would that alone constitute a breach of their fiduciary duty to participants in that it's not acting "with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims?" If it would be a breach, can the arrangement meet the suitability requirements under FINRA?

ABC company has a 401(k) plan with a 1/1 plan year. Division A is spinning off - and employees of Division A are no longer able to defer to this plan effective 3/1/2013.

However, Division A does not set up their plan until 6/1/2013.

What should happen to the contributions of Divison A from 3/1/2013 to 6/1/2013? Should they go to the original plan and then transfer over to the new plan once its set up? Should these contributions go to an interest bearing account in the meantime?

I have a plan that used to be considered a one-participant plan, covering just an owner. He has recently had two employees become eligible for the plan. (It is a Money Purchase plan with a 0% contribution formula.) So, now the plan is subject to ERISA and must file an SF.

However, 98% of the assets are in non-qualifiying vehicles (an LLP and real estate). He must now get a bond for the $2MM in non-qualifying assets.

The wrinkle I have, is that ALL of the assets are the owner's. So any loss or theft (by him--he's the only one who handles the "funds" I would guess) would affect only his own assets.

Any thoughts on NOT getting a bond because of this?

We recently took over a 401(k) plan and generally received excellent information. However, there was one amendment executed a few years ago that did not have a corresponding Corporate Resolution.

Is the amendment valid?

Thanks

Plan's termination date was 12/31/2011.

Asset Distribution date is 7/31/2012.

Does the plan document have to be restated for EGTRRA or are "good-faith" amendments sufficient?

Thanks.