Can anyone point to the authority for both the original plan (that made the distribution) and the alternative defined contribution plan being disqualified if a plan sponsor permits distributions to employees after terminating a 401(k) plan when another member of the controlled group sponsors an alternative defined contribution plan?

Can anyone point to the authority for both the original plan (that made the distribution) and the alternative defined contribution plan being disqualified if a plan sponsor permits distributions to employees after terminating a 401(k) plan when another member of the controlled group sponsors an alternative defined contribution plan?

Are Corporations A and B a controlled group or under common control under 414(b) or ©?

A has voting and non-voting stock. Two brothers each owns 1% of the total value of all stock and each owns 50% of the total voting power of all stock. Their four adult sons each owns 24.5% of the total value of all stock. (Adult meaning over age 21.)

B has voting and non-voting stock. The two brothers each owns 39% of the total value of all stock and each owns 39% of the total voting power of all stock. Their four adult sons each owns 5.5% of the total value and total voting power of all stock.

I got this question twice recently. Maybe my easy answer should be re-thought.

With Ford and GM amending their plans to offer a lump sum to current retirees, I wonder about the case of a retiree who choose a J&S, but the spouse is now deceased. If you bought a commercial annuity for this retiree, the price would (I assume) value this as a LA to one person. Suppose the plan pays a LS (417e3) to this retiree, would such LS be based on the remaining LA? Any interpretation that might require the plan to value it as a LS of a J&S benefit?

A question came up which I thought might be familiar to some of you who deal with Fiduciary requirements.

Say I am the fiduciary to profit sharing plan A. The company sponsoring Plan A happens to be an auditing firm that does ERISA audits. As fiduciary to this plan, I am receiving compensation.

I'm also fiduciary to a new profit sharing plan B, for a completely unrelated business. The Plan Administrator is looking for an auditor for their plan. I happen to think that the auditing company (A) for whose plan I am a fiduciary, is a highly competent and reputable company.

Am I allowed to recommend them to Employer B? Is it ok if I recommend them as long as I disclose that I am a fiduciary to their plan? Or am I not permitted, either by law or ethics, to recommend this firm?

My uninformed guess is that I could recommend them as long as I disclose that I'm a fiduciary to their planl, and thus receive compensation from them?

Try to get a feel for what other firms are doing with respect to the disclosures for SDBA. Does anyone know how some of the brokerae firms are handling the requirements under FAB 2012-2? Schwab, Fidelity ect? Also I see there is some general information about these SDBA that Plans must provide. Does anyone have a sample?

When contracts are combined for reporting purposes by TIAA-CREF, they also combine the Schedule A reporting. I actually think this applies to a few of my plans; where the reporting was always combined (i.e., since pre-2009),it has never been reported separately so it's been treated as though there was only one contract.

Has anyone had to deal with this issue before?

We are currently using Relius PPD VS 401k/PS Plan Document, but are considering moving to ASC, FTWilliam or McKay Hockman. I'm looking for comments related to issues with these providers, such as unexpected limitations in plan designs, inefficient amendment process, problems with batch processing to generate the required various notices. Any feed back is appreciated.

Thanks,

An employee works at a company a short period of time before she quits. She doesn't work long enough to meet the eligibility rules for a participant. 4 months later, she goes to work for the holding company (all in 1 controlled group) for a few years.

Does her time with the holding company count towards her eligibility to participate in the first company? I say no but someone else in my office says yes. Any one have any suggestions?

Are loans (other than participant) qualifying plan assets for the audit waiver requirement? The loans are real estate loans.

Thank you,

Annette Leerhoff

Is there any way a small plan can suspend Safe Harbor Match mid-year and continue 401(k) for NHCE's without top-heavy contribution? Spouse of HCE has made 401(k) contributions.

Took over a frozen plan and the plan has $1.231M in prepaid and loss of $1.491M.

EOY PBO is $1.243M and assets are $0.983M.

Shoud we continue carrying those liabilities forward? The accountant didn't like the suggestion to have it expensed.

I have come across the following situation. There is a group of unrelated veterinary specialists that are sharing the services of a number of employees. It is my understanding that each of the owners of the unrelated veterinarians (FSOs) own a portion of the company that employees the shared employees (B-org). Apparently several years ago it was determined that each of the plans sponsored by the unrelated FSOs must cover the shared employees. They include all hours worked by the shared employee in determining if the employee is eligible for the plans. I am OK with this so far. But here is the rub. In determining benefits and in testing they only include the portion of the shared employees compensation that has been determined to be associated with the work performed for that particular company? Is this legit? I don't have that much experiece with related groups in general but my gut feeling is that this is not correct?

I have a copy of the General test for one of the companies from last year (they have a New Comp allocation) and it just uses the fraction of the comp attributed for that particular company?

A plan wants to increase match in 401k plan to 25% of first 15% saved. As long as plan can pass ACP, any issues relative to discrimination?

Participant in the plan has provided the bill for funeral expense as evidence of hardship, but along with it, he's provided the check showing that he made the payment to the funeral home. Making the payment has caused hardship - if you have proof showing that the participant paid the expense that qualifies as the hardship reason could you still make hardship distribution - the bill was paid on 6/7/12, and the invoice from the funeral home does show that the participant was behind in the payment for the service as of 4/21/12... Any thoughts?

My original thought - no go on hardship since the hardship reason no longer exists due to being paid off...

I have a control group situation where there are two seperate plans with identical provisions. They are bothe Safe Harbor Match plans with a crosstested profit sharing. I have combined testing in the past to pass the general test.

Plan B is now being terminated as of 07/01/12 becuase of a sale of that business.

My question is in regards to combining testing for the 2012 plan year. I have read that in order for plans to be aggregrated that the plan year needs to be the same to determine non discrimination classification and the ratio test. They can be different to perform the Average Benefits Test.

Can the plans be aggregated for testing? If they cannot I assume that an employer contribution that is nuniform across all participants would be the only acceptable ps contribution.

Any thoughts??

We're looking for a software package to illustrate and administer 412(e) defined benefit plans. Anyone have a recommendation?

owner has 12/31/10 AB = 9,000 per month payable at 62

owner has 12/31/11 AB = 11,000 at 62

plan amended to change early ret at 55 from act equiv to fully subisdized unreduced AB at 55.

12/31/10 AB payable at 55 after amendment = 7,000 (limited by 415)

12/31/10 AB act equiv at 55 before amendment = 6,000

12/31/11 AB at 55 after amendment = 9,000

So for annual accrual for 401a4 testing at age 55 which is more correct?

1) 9,000 - 7,000 = 2,000 payable at 55 prior to normalizing

2) 9,000 - 6,000 = 3,000 at 55 prior to normalizing

thanks

A DB plan has an Early Retirement Benefit (ERB) if the participant has attained age 60 and completes 20 years of service. The reduction is 1/2 of 1% for each month that retirement precedes normal retirement age. Normal Retirement Age is 65.

Now the plan terminates in a standard termination.

Say an active participant is age 61 and has 19 years of service at plan termination. At date of plan termination the participant did not meet the service requirements for an ERB.

Since the plan terminated, does the participant still get the ERB at date of distribution since the participant would have had 20 years if the plan did not terminate? Is this preserved?

How about if an active participant is age 58 and has 17 years of service?

I think that if the participant would have the 20 years by normal retirement age then you would value the ERB.

I remember doing this a long time ago but can't find anything on it.

Located this on the Department of Labor's website regarding QMCSO's:

Q1-29: To whom should the plan pay benefits?

The plan should pay benefits to the alternate recipient, the custodial parent, or the provider of health services to the child notwithstanding plan terms that may require benefit payments be made to the participant. In some instances, payment will be required to be made to the State child support enforcement or Medicaid agency.

[ERISA §§ 609(a)(8), 609(a)(9), 609(b)(3), Social Security Act § 1908(a)(5)]

I read this as payment for benefits are to be made to the alternate recipient, custodial parent or provider no matter what. Am I incorrect?

Also the term "plan", does that refer to both the health insurance carrier AND?OR the employer(if it is a self-insured plan)?