Can a participant designate which accounts in a 401(k) plan to be given to a beneficiary? Such as "my Roth account under the plan goes to person A, and my pre-tax 401(k) goes to person B." I never thought this could be done as all distributions to participants or beneficiaries under 402(a) of the Code must be pro rata from a basis standpoint, and I am not sure how distributions to a beneficiary would differ (both are "distributees" under the Code); but if you think it is legal let me know.

Does the reduction to benefits based on the insolvent status of a plan impact the calculation of withdrawal liability for employers that withdraw when the plan is insolvent? I assume employers are required to continue making the contributions required under the CBA as well as any MCRs during this period. If circumstances improve and the plan emerges from insolvency, are prior benefit levels restored prospectively so that the plan's UVBs increases?

Hello. I am very familiar with the tax codes related to the private sector however, I have an opportunity to work with the public sector now. I am wondering if a town is able to write off the LTC premiums paid for employees just like a business.

Any help would be appreciated.

A 100% owner of a corporation wants to take out a loan from their 401(k) plan and lists "needed to fund the business to keep operations going".

After he receives the loan proceeds, he plans to immediately loan those funds to the business.

Isn't this a prohibited transaction, maybe indirectly?

Would it make a difference if he and his business partner were 50/50 owners both taking loans from the plan for this purpose?

Suppose the loan occurred "a while" ago and now the owner(s) are going to provide loans to the business? Does the lag time change anything?

Have a new takeover client with a profit sharing plan that uses a trustee directed fund, subject to annual valuation. Of course plan has several problems. One problem is that in 2009 a terminated participant was paid the 80% of the benefit due. The 20% for mandatory withholding was left in the trust. I do not know if any 1099R Form was done. (It appears that client kept almost no records.) We are now in 2012 and those monies remain in the trust fund. Any opinions on what actions should be taken to correct this problem? Thanks!

Generally, who would be considered plan fid in a small (less than 20 participant) plan? Board of directors? investment adviser? non-producing TPA? corporate? What is most common?

don't work with these, but the question came up - at a quick look through 125 and the regs/proposed regs, it wasn't apparent to me that this transition period would apply? Anyone know if it does or doesn't?

What are the ramifications of having distribution checks going uncashed beyond the PBGC's asset distribution deadline for a standard DB plan termination?

Is it possible to use an age other than the NRA or SSRA to normalize benefits when cross-testing? For example, suppose you are cross-testing a DB and DC plan. Could you use age 70?, 75?

Also, is it possible to limit post-NRA APRs to age 65?

Thanks.

Has there been clarification on who an "Authorized representative" is that can sign Form 5558 for the 8955-SSA portion? I know ASPPA submitted a letter 11/21/2011 requesting that the requirement be removed but I cannot determine that it has been so removed. So I guess i'm wondering to what an extent a tpa is considered an 'authorized representative' and can sign on behalf of client.

What are most people doing with rehires that were previously reported as an A?

One of my sources says the D means distributed. So just leave the Rehires as is until they are paid out.

Another Source says D means Deleted. So Take the rehires off.

Suggestions???

Pat

A 401(k) Plan has a brokerage option available to participants. One of the participants has asked if they could invest in an IPO (I guess Facebook is coming out this week) and they were told that they could not. Is there something in the IRC or regs that prohibit an investment in an IPO? Thanks for any replies!

Rats, I just lost everything I typed and need to do this over...

i hope I picked the right forum to post this crazy question. Db plan (which i don't work on, I just do DC stuff) had a plan term date of 12/1/11. The trustees had intended to move the assets over to a MPP set up with a 0% formula to take the assets but the assets were not transferred prior to 12/31/11 9they went sometime earlier this year). So MPP had $0 at Fidelity and DB plan had lots on 12/31/11. DB plan also has a mortgage that reads:

[blah, blah, blah] and {insert name}LLC Defined Benefit Plan with trustees {insert name} and-or {insert name}, herein called "Mortgagee," which term includes Mortgagee's heirs, executors, administrators, trustees, successors, legal representatives and assigns, and shall denote the singular and/or plural and the masculine and/or feminine and natural and/or artificial persons whenever and wherever the context so requires or admits, and whose address is.....

I think the trustees are looking at this are the DB plan is the Mortgagee and that this automatically transfers the mortgage to the successor plan, the MPP. Your thoughts?

If you agree, when would this take effect? This is critical as if the MPP has no assets on 12/31/11, it doesn't need a 5500 for that year (it's first year).

if you disagree, what do you think is needed to transfer the mortgage over to the MPP?

Thanks for your thoughts!

My boss just asked me where we could be a plan document for a nonqualified plan. Any suggestions?

Pat

I've posted this one before, but maybe someone missed it and might find this useful. (of course, as with any custom report, it's use at your own risk, though a few people indicated it appears to work well)

This pulls the data from Relius for importing into FTWilliam SSA govt forms. Has saved me a ton of time.

I copy the data from columns A - J and paste it into FT William

8955SampleSSA.csv file. (which I have copied and saved on my computer)

on this excel file, the tem data appears (collumn L) which is my own check. if term date is 2010 I'd expect an A as code for people.

if before 2010 then a D.

In FT William, I complete the following steps:

Add form SSA

then p2

Return

Upload

participant CSV file (this is the third choice)

and simply choose the 8955SampleSSA.csv for import that I pasted the data into

I have an actuary looking for a book of business to purchase. DB or DC. Message me if you have any questions or follow up.

Thanks.

Clients pay my fees in one of two ways: (a) From the company account and (b) from the pension plan directly upon invoice. I receive no indirect compensation.

My conclusion is that the final fee disclosure rules set forth in 2550-408b-2© do not apply to me and I'm not required to provide any disclosure.

Agree or disagree?

I have a client who has apprached me with the following scenario:

Prior to last year, the client has offered all of its benefits on a December 31st plan year. However, last year, the client changed their benefits plans and moved some coverages from one company to Aflac and changed the plan year. So, now, they have some benefits that are December 31st year and some that are June 30th plan year. I would think that they could maintain separate plans for each set of benefits (so, one document for the 12/31 benefits and one for the 6/30 benefits).

The problem is that they never executed a new plan document for the June 30th benefits and here we are coming up on the end of the year. My gut is to have them execute the plan now with Board resolutions back to the date they initially decided to adopt the new plan. In my experience, this isn't a hot button with the IRS and showing a good-faith attempt at complaince will usually be sufficient to protect the employer...especially when they correct the problem on their own. Does anyone have a better idea?

Also, when the change was made to the new benefits plans, they allowed some employees to stay under the prior company's critical illness plan, due to higher rates in the new plan. In essence, they grandfathered out the old benefits. So, now, they have employees with one company's critical illness plan on the 12/31 plan year and some under the new Aflac plan with a 6/30 plan year. Does this cause any problems? In essence, is there a problem with a company payroll deducting premiums from two similar plans under 2 different cafeteria plans with different plan years? (I know that's a convoluted question...)

Has anyone decided if these are plans for purposes of the regulations? It looks like if they are unfunded excess benefit plans they are not. I know they are unfunded but do not know if they are excess benefit plans. Can someone point me in the right direction.

Controlled group consists of Company A and Company B. Company A sponsors Plan Y, a safe harbor matching 401(k) plan. Company B sponsors Plan Z, a safe harbor nonelective 401(k) plan.

Because Plans Y and Z utilize different safe harbor formulas, they cannot be aggregated for coverage and nondiscrimination testing. However, because the Plans are sponsored by members of a controlled group, the separate coverage and nondiscrimination testing for each Plan is performed by looking at the participants benefitting vs. the employer-wide workforce.

Company A has 12 employees (4 HCEs and 8 NHCEs), all of whom are participants in and benefit under Plan Y.

Company B has 88 employees (4 HCEs and 84 NHCEs), all of whom are participants in and benefit under Plan Z.

The combined workforce is therefore 8 HCEs and 92 NHCEs. The coverage ratio for Plan Y would therefore appear to be (8/92 NHCEs = 8.70%) divided by (4/8 HCEs = 50%) = 17.39%. FAIL.

Looking at the average benefits test, the NHCE concentration percentage is (92/100) = 92%. The safe harbor percentage is 26%, unsafe harbor percentage is 20%, and the midpoint is 23%.

The coverage ratio of 17.39% does not exceed the safe harbor percentage of 26%, and also does not exceed the unsafe harbor percentage of 20%. FAIL.

Since 100% of Company A's employees are participants in Plan Y and benefitting under Plan Y, there are no employees that might be added to Plan Y to help pass coverage. What, then, are the correction options under this scenario?