I have a deferred compensation plan(457) sponsored by my municipal employer located in New Jersey. I was told by the plan's local representative that the only way to take money out was at retirement or if I quit. I called "Metlife" directly and was told by their corporate representative, that I could take money out for hardship, which included for example, my desire to obtain funds for a downpayment as a "first time homebuyer". My employer sided with the local plan representative who is of the opinion that "first time homebuyer" doesn't qualify as a hardship and that the IRS expressly forbids it! WHO IS RIGHT?

Second, I have lost faith in the trustworthiness of my deferred compensation plan's representative and their guardianship over my funds. Can I rollover the accumulated value of my plan into a retirement plan sponsored by another investment company or bank. My township employer, together with Metlife's local plan representative maintain that this is only possible upon my retirement (in 2015) or permanent seperation. Can you point me in the right direction to secure competent answers to the above questions?

I have a 401(K) plan and the owner will be required to start taking his Required Minimum distributions this year. The plan also has profit sharing and Roth sources of money. When calculating his RMD for 2012, I'll use his balance as of 12/31/11. But, do you consider the Roth contribution source in the 12/31/11 balance, or are they excluded from the calculation?

http://hr.cch.com/news/pension/042312a.asp

Take a look at this, from today's BL newsletter. This has always bothered me because it puts SE individuals at a disadvantage from corporations. IF a corporation does a PS contribution for the owner, the PS contribution is not subject to SE Tax. But because the SE's contributions are deducted on page 1 of 1040, they are still included in SE Income.

Am I missing something or do others agree that SE Individuals are paying more in payroll taxes (assuming two otherwise identical businesses)?

We had an executive sever employment. His 457(b) paperwork with distribution options was sent to his home. Executive was away for a long period of time. Executive's spouse was home but never opened the mail with his 457(b) paperwork. We paid out the 457(b) account in lump sum. Now Executive has returned and wants to know if there are any options for returning the money to the Plan or rolling it over.

Any ideas?

The 401k plan has as one of its investments a few Brazilian ADR shares. Each year there is a small amount of tax withholding at the source that is removed from the trust. Is this something that can be recouped or is it simply a trust expense? Should the trust be exempt from this withholding?

I have several small plans where each Participant has his own brokerage account. Do we have to list the fees to buy and sell stocks and bonds or is just stating that there is a $25 per year fee enough?

I think I am getting a pretty good handle on what needs to be disclosed as far as compensation for the TPA (me) and the CPA doing the audit on large plans. But I have almost no information on what needs to be disclosed as far as comp for the investment adviser and the investment company. Are the prospectuses sufficient?

I need a $250,000 life insurance policy ASAP for $250 a month or less, lasting around 12-24 months. USAA doesn't really have anything that fits this so I'm looking for recommendations of other companies. Who do you have your life insurance policy through? Do you like them?

Plan Sponsor adopts a brand new safe harbor plan with an effective date of 1/1/2011. This is a safe harbor match, which is determined/calculated on a per payroll basis. The Plan Sponsor did not actually Adopt the Plan until April 2011 and 401(k) and match did not actually start coming out of employees' paychecks until May 2011. The owner is self employed and will have schedule C of well over $245,000.

Being that the payroll for 401k and match did not actually start until May, is there any reason I should have to pro rate the compensation limit even though the effective date is 1/1/2011. Meaning (245,000 / 12) * 8) = 163,333.33. My concern is that the nature of the owner's compensation is such that it unfarily benefits the owner, by allowing him to take into account the entire year of pay, while his employees did not have the same benefit.

My concerns would be alleviated if the Plan provided for an annual match, because then everyone would have the advantage of 12 months of pay.

When we first submit a 5500 in behalf of a client, we follow the process of asking them to request us to file electronically, and then countersign their request and return it to them.

When we amend the form, do we need to go through the request process again with the amendment or does the initial request cover the amendment?

In a DB plan that is currently making monthly payments out of current plan assets to retirees, what happens to these benefits when a plan is terminated? do they convert to lump sums? do they purchase annuities for the retirees? Thanks.

generally the plans I work with provide that if an employee terminates with a vested benefit before NRA, for example age 40, he can recieve his benefit as an act equiv. life annuity at age 40.

so when computing the MVAR I compute the EBAR for each age from 40 to NRA of 62 for eg.

This often results in an MVAR that is much larger than the normal EBAR.

It appears in the above eg. vesting percentages are not applied.

If a plan (though not common) has terms that only provide for payment of benefit at NRA (aside from plan term) then it would seem that the MVAR would only be computed at NRA.

This would minimize the disparity between normal EBAR and MVAR. Perhaps small payouts (under 5k) could be made and that is it.

The above is presented in the context of a small plan (i.e. less than 10 participants).

Why not? Am I missing something?

Thanks

Does anyone know if the new cost disclosure rules that apply to 401K plans also apply to profit sharing only plans whose assets are invested by the plan trustee and are pooled together. These plans only get valued once a year. Partyicipants have no control over the investments.

THank you

A Defined Benefit Plan must pass either the ratio test or the ABT to pass coverage, correct?

We submitted a Plan to the IRS for a DL upon termination and they are questioning why some of the variations of the ABT fail, and are wondering if this means the coverage test fails as a whole (interestingly, they are posing this more as a question to us, as opposed to a statement off act - shouldnt the IRS know the rules??). Seems to be a moot point however, since the Plan passes the ratio test, which means it passes coverage.

Is anyone familiar with the rules regarding purchasing a life insurance contract in a 401k or Individual 401k?

Specifically, I'm looking for what the maximum premium amount can be. i.e. 50% of account value, or maximum dollar amount.

I would also like to find any source information from the IRS, but have been unable to.

Thank you.

Does anyone know when the DOL intends to issue the model participant benefit statements that it was supposed to issue by 8/17/2007 with respect to the increased reporting requirements under Section 105 of ERISA, as amended by PPA 2006?

Also, for those of you preparing the participant benefit statements for trustee-directed plans where the participants have undivided interests in the plan assets, are you including "the value of each investment to which assets in the individual account have been allocated", or are you simply applying the participants' respective undivided interest percentages to the total asset value in the plan, without breaking that out into each separate investment (which sometimes could be dozens, or even hundreds)?

Thanks!

Plan A is 100% vested. Plan B has a 5 year graded schedule. Company A buys Company B. Plan B is merged into Plan A. Company B employees will be 100% vested in all new contributions made after the merger. However, Company A wants to continue vesting Company B employees in their pre-merger accounts under the old Company B schedule. Can they do this? If not why not? This does not involve cutbacks.

Plan is top heavy and only made contributions to those that were actually deferring. This occurred over a 10 year timeframe. Plan is being corrected under VCP. Couple questions:

1. Top-heavy vesting is a 6 year graded. A number of employees that would be due a contribution terminated and are 0% vested in this money. Does a contribution still have to

be made for these employees and then forfeit the entire amount?

2. The employees due a contribution were ones who never deferred. Plan is participant directed. In calculating lost earnings over the past 10 years, can we use the DOL lost

earnings calculator? We have historical gains/losses of all the funds over the past 10 years, but if we use the fund with the highest earnings each year, the contribution is

significantly more than the DOL earnings calculator. Can we successfully use an average return of all the funds for each year?

Thank you!

I have two companies of the same employer, but they are QSLOBs. Both companies have key employees but no overlapping keys. Do the account balances have to be aggregated for top heavy purposes?

Welfare plan has a plan year end of 12/31/11, one insurance contract end is 2/28. On the 2010 Form 5500 Schedule A, we reported the contract ye 2/28/11, which should have been reported on this year's 2011 form schedule A. Has anyone run into this? Is it ok to report the contract again in 2011 or just keep reporting as is? Of course the correct thing is to go and amend the 2010 Form and remove the contract year 2/28/11 and put on the 2011 but of course I don't really want to do that so I am wondering if others have run into this and what they have done.

Thanks in advance.