For our DB plan, how long can I wait until I must provide a vested terminated employee with a letter informing him of his vested pension amount (and all the other stuff)? I've been doing it pretty much immediately up to now but I suspect I don't have to be that nice.

I've been in the habit of sending a letter to vested terminated employees, very soon after they leave, informing them of their vested pension amount, etc etc. So I'm certain I haven't been late on any of them.

Question is: How is late defined? Can I 'batch' these and do them all once per year and not be late? What are, or where can I find, the rules?

Thanks

An employer wants to contribute a sum certain to a 125 plan for each employee. The contribution may be used only for medical insurance but, if the employee has other coverage or meets certain other criteria for declining medical insurance coverage, may also be contributed to the company's 401(k) plan. The contribution is not otherwise available to employees. In other words, an employee may not take the contribution as additional wages.

Where an employee contributes the sum to the 401(k) plan, are the contributions treated as elective deferrals or as nonelective contributions? In the latter case, may a 401(k) plan provide for alternative allocation rules for nonelective deferrals, namely, in proportion to compensation for "regular" profit sharing contributions but as flat amounts in the case of employer monies coming through the 125 plan?

On the other hand, if the contributions to the 401(k) would be treated as elective deferrals notwithstanding their source, would an employee have constructive income if the employee failed to make any election?

Thank you in advance.

Has anyone else had this circumstance: 5500 filed last Friday, plan sponsor logged in shows it has been received, but searching online at efast2 does not show the filing?

I have a PS plan that had a MPPP merged into several years ago. Plan made a hardship dist to a participant in excess of PS source which means part of the MPPP source was paid out under hardship dist. Participant is only 52 years old. I need help on corrective measure since MPPP attrib source is not eligible for hardship dist at this age...Thanks.

Last week, the Financial Accounting Standards Board announced FASB's approval of a new accounting standard (not quite finished) for a little disclosure that might help a careful reader begin its own analysis about the business' exposure to liabilities that relate to a multiemployer defined-benefit pension plan's weak funding.

Nowadays, many observers of accounting compare a U.S. standard to an international standard to consider how similar or different they are.

What does international accounting standards call for to explain a business' exposure to liabilities that would result if an employer withdrew from a pension plan?

A defined contribution plan can, of course, require that a participant be employed on the last day of the plan year in order to share in the employer's profit-sharing contribution. Can a plan also require that a participant be employed on the first day of the plan year? Requiring employment on both first day and the last day of the plan year would mean that a rehired participant would not be eligible to receive an allocation of the profit-sharing contribution.

Treas. Reg. section 1.410(a)-4(b) requires participation immediately upon re-employment. It seems like "participation" must mean being entitled to receive an allocation of a profit-sharing contribution. Is there any legitimate way to say that the reemployed participant resumes participation but is not eligible to receive an allocation of the profit-sharing contribution because he was not employed on the first day of the plan year?

Thanks much!

If you have a safe harbor noelective 3% plan, can you exclude certain categories of participants (e.g., associates in a law firm or some other classification of employees)? If so, can you provide a citation in the regs for this point?

When a person entered the plan and has a balance but in a future year changes their job to an ineligible class of participants (example excluded hourly paid, union, etc) they no longer earn any service (only vesting accrues) but may not be eligibel for distribution because they have not terminated from the employer, are they counted as an "active" participant, or a "seperated participant entitled to future benefits"? If the later, and they have no balance would they no longet be counted as a participant?

husband and wife plan (no employees)

a plan amendment to increase plan formula is effective 1/1/07 and adopted 3/15/08.

it seems that increased plan formula could not be used for 2010 plan year for computing cushion amount.

Am I missing something?

One participant (owner only) Defined Benefit plan. He wants to do a plan loan - give money to an outside investor. I know plan loans are allowed (not participnat loan). What are the requirements for a plan loan - is there a dollar limit and time limit (same as participant loan)? Does he need an ERISA bond since one of his assets is a plan loan?

Thanks

May a QDRO specify that the share of payments (e.g., 50%) otherwise being made to the employee that are awarded to and to be made by the plan directly to the ex-spouse continue to the ex-spouse's estate after his death, until the later death of the employee?

Or, would that be impermissible after the ex-spouse's death since the estate is not per se a "spouse, former spouse, child, or other dependent of a participant" (IRC section 414(p)(1)(B)(i) and ERISA section 206(d)(3)(B)(ii)(I)) and thus not per se an alternate payee?

I have a plan that had some people defer early. I am planning on distributing those deferrals & earnings.

Does the under 59 1/2 penalty tax apply?

I am wading into foreign waters here and not even sure if I have the issues framed correctly. A closely held TPA firm has investment advisors on staff. Due to various concerns, the TPA decides to create a separate investment advisory firm. Not too worried about the shared ownership (at least not today...) but concerned about shared employees, ie advisor in new RIA firm, also works for TPA and salary is paid by TPA. Can anyone point me in a direction to start resolving these questions? The best would be to find out there are no issues, but I believe that is wishful thinking. The IRS scares me enough, the SEC flat terrifies me....Thanks in advance.

Working with a prospective new client. They are expanding their business to include a location on tribal property. They have been advised by their current TPA that the employees of the tribal location cannot be included in their existing plan. I am aware of various special rules for plans offered by tribal governments, but I've never heard of not being able to include employees of a private employer in a plan just because the work site happens to be on tribal property. Where can I find more information about this?

With 7/31 being a Sunday, do I get until Monday 8/1 to file?

Reciprocity Agreement (national covering an industry) requires mistaken contributions to be promptly returned upon discovery that the contributions were transferred to the wrong plan. Plan allows reciprocals and says to follow the reciprocity agreement terms. Under Plan, to return employer contributions (employers defined as participating employers), employer must request return and ERISA 403©(2)(A)(ii) is followed.

Mistaken contributions should have been sent to a different pension plan (DB) but were incorrectly sent to a plan in which the participant is only a traveller and not otherwise a participant.

Thoughts are that the plan provision requiring following reciprocity agreement and reciprocity agreement requiring return is fine under ERISA 403©, so long as ERISA 403©(2)(A)(ii) conditions are met.

Hi:

I wanted to see if anyone has ever encountered this situation:

Plan Sponsor did not make discretionary ER contributions for the Owners in 2008 because the Plan was top heavy. In 2011, Fidelity told them that they needed to make ER discretionary contributions for the owners for 2009 and 2010 because these years were "Not Top Heavy". The Plan Sponsor will be funding the 2009 contribution at the end of this year and the 2010 contribution at the end of next year.

There is no mention of this provision in the plan document or adoption agreement, does anyone know if there is guidance/authority to support what the plan sponsor is about to do?

Would the 2009 financial statements need to be recalled and restated?

How long does the Plan Sponsor have to fund such contributions?

Does this impact the ADP/ACP discrim. testing? Would there be any excise taxes involved?

Thanks in advance.

Looking at possible affiliated service group. My question is just on the "whether certain services were historically performed is based on whether such services were typical for employees in that service field." A partnership that also owns a 20% interest in a company provides accounting, payroll and other administrative services to another company that provides day care service. The partnerships entire business is providing services to 4 different companies where there is not a controlled group amongs the partnership and any one of the companies or each other (nowhere close to 50%). This "services historically performed" is tripping me up. A day care provides childcare services...that is its service field, but the back office many times does payroll, accounting, etc. Is that considered a "service historically performed?

I have a client who is changing from a Parntership to a Professional Service Corp. The owners will remain the same. Can I just amend their current 401k and 125 plan docs to show a change in the entity type? or should we terminate the current plans and start new ones?

also, besides the owners being able to participate in the 125 now, what are the advantages (as far as these benefits are concerned) in switching from a partnership to a PSC?

Thanks!!