PS allocation conditions = none for actives, 500 hours for terms. Am I correct that we can amend the plan for 2012 (calendar year plan) as long as no one has worked 500 hours yet? We're going to change the allocation methods and the allocation conditions.

My argument is that if you have not yet worked 500 hours, there is still a last day rule that applies to you if you terminated. So it is essentially the same as having a last day rule for everyone.

(assume no retirees).

Service bonus policy for non-top hat group provides that company will pay an employee a cash bonus in or immediately following the end of the employee’s final year of employment provided that:

1) The employee has worked for the employer at least 10 years at the time of termination.

2) The employee has received satisfactory performance reviews in the year of termination and in the two years prior (or in the three years prior for an employee who terminates prior to receiving a performance review for the year in question).

3) Termination or resignation is for reasons other than unsatisfactory performance or violation of any company policy or standard of conduct.

4) The employee executes a general release of liability in favor of the company. Timing of payment will comply with Notice 2010-80 and in no event will be made after March 15 of year following year of termination (employer follows calendar year).

Benefits are forfeited in event employee refuses to sign release.

The Company reserves the right to modify or eliminate the service bonus policy at any time, for any reason, without notice.

The amount of the service bonus is completely within the Company’s discretion but generally will take into account the employee’s length of service and final base compensation.

Question - does fact that bonus formula is based on past service meant that a deferral election is required upon initial eligibility, e.g., completion of 10 years of service with satisfactory performance reviews? Or does true eligibility not arise until the reason for termination is clear and it is not for unsatisfactory performance, violation of policy? And does fact that termination must meet certain criteria preserve SROF until that time?

Any comments are appreciated.

A not-for-profit has been operating a SEP plan for many years. The director left a couple of years ago, but continued to receive W-2 compensation under a salary continuation agreement. Should SEP contributions have continued based on her continued salary?

If a participant is on an authorized non-military leave of absence from her employer, Q&A-9 of Treasury Regulation Section 1.72(p)-1 provides that her participant loan repayments may be suspended for up to one year.

What if the participant's loan repayments were in arrears prior to the commencement of the leave of absence? Q&A-10 of Treasury Regulation Section 1.72(p)-1 permits a plan administrator to allow for a cure period ending not later than the last day of the calendar quarter following the calendar quarter in which the required installment payment was due.

Does the suspension permitted under Q&A-9 apply in this scenario, which would actually result in the cure period being extended by up to one year? Or is the suspension permitted under Q&A-9 applicable only where the loan was otherwise current when the leave commenced?

Here is a strange one...

Employer Matching Contributions. Employer Matching Contributions on behalf of a Participant shall be made at a rate of $1.00 for each $1.00 of Eligible Elective Deferral Contributions made by that Participant during the Plan Year, as determined under 5.4-1.

5.4-1 Eligible Elective Deferral Contributions. Only Elective Deferral Contributions for the Plan Year of less than or equal to the first four percent (4%) of a Participant’s Compensation that remain in the Plan through the Anniversary Date (the “Matchable Contributions”) shall be eligible to be matched by Employer Matching Contributions. Catch-up Contributions are not eligible for Employer Matching Contributions under any circumstances.

Basically, if I am still employed and took an in-sevice withdrawal, the company is not matching my pretax contributions.

Would you considered this an allocation requriement? Therefore would not be included in the ACP test and counted as not benefiting under 410b.

Our firm does DC plans exclusively at the moment.

We are considering finding an actuary to back office DB plans, particularly cash balance or db/dc combo plans.

I'm wondering if anyone here does this and has any thoughts or experiences? I know a lot of TPA firms do it.

Just to be clear, I am not sending anything to India. If we do it, we'll look for a US-based actuary, preferably someone local.

I think I am overthinking again, but?? The client uses the Corbel VS docuemnt. In 2000, the eligibility was 21, 1 yos, and dual entry. This is a calendar year Plan. The eligiblity switched to 18, 6 months, and quarterly entry in 2009.

John Doe was hired 6/21/2000 and terminated 3/18/2001. He had 1,000 hours in that time span and was over 21. He did not enter the Plan, since he was not there on 7/1/2001. He was rehired 5/20/2011. He did not work from 3/19/2001 - 5/19/2011 for the client. Was he a Participant on his rehire date, 5/20/2011? I believe so, but do not want to miss anything with the rules of parity.

I'm looking for opinions on whether the following situation violates the 133 1/3% accrual rules of 411(b)(1):

Final average pay plan has been around for awhile, providing 1.75% of FAP5 for each year of service. Plan amended 1/1/2010 to reduce future accruals (1.75% for each year of service up to 1/1/2010 plus 1% for each year of service after 1/1/2010 (proper 204(h) notice given)). Plan now wants to restore 1.75% piece effective for service after 1/1/2012 (i.e. amend the plan to provide 1.75% for each year of service up to 1/1/2010 plus 1% for each year of service after 1/1/2010 and before 1/1/2012 plus 1.75% for each year of service after 1/1/2012).

Since the formula is constant for all future years, I believe the 133 1/3% accrual rule of 411(b)(1) is satisfied, but looking for other opinions. Thanks in advance.

Every plan termination we've done, the trustee is the last person to receive their distribution. This has never been a problem in the past, but we have a plan that is terminating and the trustee wants to rollover his account to an IRA and wants know if there is a cite that states that the trustee's assets are to be distributed last.

I explained that it would be like a captain jumping ship and leaving the crew to fend for themselves, but that wasn't a good enough explanation for him.

Is this just some companies policies, or is it written somewhere? I can't find anything on it.

Thanks so much.

I have a participant that is purchasing a lot (the loan documentation states that it is a "lot loan") and has requested a 401(k) hardship distribution for this. The lot happens to have two trailers (mobile homes) on it. One will be removed, and the other will become their principal residence. Is this a eligible reason for a 401(k) hardship distribution?

ok - very small plan with cross tested formula; last day rule & 1000 hours for allocation.

There are 7 employees total; 3 HCEs and 4 NHCEs. (One of the HCEs is young and always gums up the non discrim testing.)

One of the NHCEs termed and one retired.

I have to add one of those back in for coverage testing to pass anyway, the retiree was the last out so first back in per plan provisions to fix coverage.

Is there anything that prevents me from adding back in both the retiree and the term for allocation?

The termed NHCE is much younger and would help the EBARs for cross testing thereby allowing less to the NHCEs overall.

thoughts?

I have a participant who rented out his principal residence while he was in Alabama (I believe for tornado relief). He's now living temporarily in an apartment and plans to move back into his home in a couple of months. He's received a foreclosure notice on his home. Can he make a claim on his home if he is not currently living there but plans to move back in a couple of months?

Hi, all -

The draft of the 2011 Form 8955-SSA has been released by the IRS with a Feb 2, 2012 date. Does anyone have any information on when this will be finalized? Thanks!

What type of policy is an Accidental Death and Disability under ERISA? Does it classify as a life, disability, health or welfare benefit? Something else? Any help is appreciated. Thank you.

What benefit options to you believe are available to the following participant:

PVAB = $2,000

AFTAP is 60-80

Plan requires consent if PVAB is over $1,000

Plan only allows lump sums for benefits less than $5,000

Is the participant's only option to receive 1/2 of the PVAB?

The sole proprietor has a DB contribution but also wants to fund 6% of earned income to the profit sharing plan

As usual, we develop the net earnings from self employment and subtract 1/2 SE Tax.

My question is do we then take that number and compute the 6% amount or subtract the DB contribution and then compute the 6% amount with what is left.

Any insight is greatly appreciated.

Lori

I've be advised in a mutual fund company opinion that matching employer contributions in a 403(b)(9) plan will cause the plan to become subject to ERISA. I've found some artciles that speak to 403(b) plans (no mention of 403(b)(9)) that seem to indicate that ER matching contribtuions will cause the plan to be subject to the contribution anti-discrimination rules of ERISA. They don't say that the Plan is subject to ERISA, just that the pPan must comply with the anti-discrimination rules.

Spefically, does this cause the 403(b)(9) plan to be subject to ERISA ?

IRS did audit, plan corrected for failed non-discrim testing by making QNEC to NHCEs which was approved by IRS. Service Provider placed in wrong money-type (1 GAC, 2 ER-sponsored plans, QNEC was going to frozen plan but instead provider placed in active plan money type). I can't get this to "fit" into one of the qualification failures under EPCRS-anyone see something I am not? Please?

And I'll elaborate-not operational because I don't think the error arose solely from the failure to follow plan provisions (plan says what happens when fail ADP, and that is what sponsor did, made QNEC to NHCEs). Then of course, I dont see how it is a demographic, document or eligibility failure? In fact, because it was one GAC, there would be no financial difference....the only error I see is whether the correct folks received the $$$ given that I know there was overlap, but am confident the overlap was not 100%. Maybe late deposit under DOL???? But then I worry about the other plan...and folks who conceivably have taken that $$ that maybe were not entitled?

For HRAs that carryover unused employer contributions, does this impact nondiscrimination testing (i.e., $1000 per employee every year is contributed to the HRA, and unused amounts can be used in the following years). Do actual reimbursements need to be considered for testing, or can contributions be used somehow?

Has anyone who filed their 2009 5500-SF Form through Relius Web Client and received the following acknowledgement

Current Status: Filing_Received

then had their client (former client) receive a letter stating that they never filed?

Any help that you can provide on this issue will be greatly appreciated.

Thanking you in advance to all of those who respond.

DPSRich