A lot of threads on whether you can or can't invest in gold coins in a 401k PSP. But, I havent see anything reference doing so in a Defined Benefit Plan? Do the same rules and exceptions apply?

My client would like to close the US Growth Fund and and map assets and allocations to the LifeStrategy Moderate Growth Fund. The client does not have a QDIA

Questions:

Can someone tell me what information I should be providing the client with such as: requirements with respect to communications, etc.

Can you provide me with the Code or Regulations regarding fund mapping?

I wasn't sure which forum to put this in; my apologies if I should have posted this some place else. Anyway, thanks in advance for your input on this! I am studying for the ASPPA DB course and am considering also signing up for the DB webcourse. Interested in hearing what others who have used the webcourse think about it?

My client would like to close the US Growth Fund and and map assets and allocations to the LifeStrategy Moderate Growth Fund. The client does not have a QDIA

Questions:

Can someone tell me what information I should be providing the client with such as: requirements with respect to communications, etc.

Can you provide me with the Code or Regulations regarding fund mapping?

I'd like to know if I'm making moutains out of molehills. A volume submitter plan was restated in 2009 and submitted at the same time we were all scrambling to get our restatements done in early 2010. There was a problem with the submission because the GUST document wasn't signed on time. The employer paid a penalty and the Determination Letter was finally issued for the 2009 document. For a reason that I don't entirely understand, the employer asked their provider for a new document. I think they may have been looking for an SPD, but somehow they ended up with a 2011 restated plan. The next submission is years away, and they will probably need to restate again at that time. Of course, I'm going to go through the 2011 document just to make sure that changes weren't made, but assuming everything is status quo, my thinking is to toss the 2011 document, get a new SPD for the 2009 document, and get back on track. Or should I just let them keep the 2011 document and stop worrying about it?

I would love to her ideas on this. What does everyone do when they takeover a Plan and no one has a signed copy of the doc starting the Plan? In this case the Plan was started with a Gust doc in 2008 and then an EGTRRA Doc later that year.

Two similar problems. One Plan has 8 employees and the other Plan has 230 employees.

A life / disability insurance company did not provide notice of premium increase. In PA, what statute governs the rules concerning notices of premium change / cancellation for life / disability policies. Basically I want to know if a 30 day or 60 day notice is required.

Thank you in advance

Thanks in advance. I have wandered around the boards and decided that my question is just insane but I am going to post it anyway. DB plan in a hospital. Purportedly the hospital has employees who would rather take more in hourly pay than participate in the "benefits" programs (not sure if this means health and welfare in addition to any retirement plans). Sponsor wants to amend the plan to exclude the "no benefits" employees. For the sake of argument let's assume this would apply to new hires only. I am ok with an employee irrevocably opting out for whatever reason but there is something a bit unsavory, a bit manipulative, a bit smelly about opting out for more money...I have raised the possible CODA issue, and the issue of how on earth do you define the excluded class in the plan document...I have been assured that these "no benefits" employees would never amount to more than 30% of the eligible plan population so there would be no "reasonable classification" issue, but it still bugs me. The potential "no benefits" employees could in theory be part time or full time.

What am I missing? I don't have a good sense of comfort that the employee would necessarily be bargaining in an equal posisition of power vis a vis the salary/benefits conundrum, but I know that fairness in employment relationships is not the main concern of ERISA and IRS rules. Still and all this just stinks to me and I need either a good foundation to say oh heavens no you can't do that, or a good logical train to show me why it is not a problem. What a Monday is all I can say.....

There seem to be no instructions for Schedule A Part III. I'm guessing this is to be filled out on a cash basis but was looking for other thoughts. Specifically premiums for a prior year that get paid after the policy year is over.

I have a plan that has several different vesting schedules based on employee classification...

Group A: 3 Year Cliff with zero vesting until year 3

Group B: 3 Year Grade- 0-1=0%, after 2 =20%, after 3 = 100%

Group C: 3 Year Grade- after 1=25%, after=2 =40%, after 3=100%

Group D: 3 Year Grad-after 1=25%, after 2=50%, after 3=100%

Would BRF testing be required? Or since everyone is vested by after year 3, the vesting schedules would be considered nondiscriminatory?

Question 2: Plan changes vesting schedule for all new employer contributions. New contributions vest at a 3 year cliff. Old contributions vest at a 5 year cliff. Would BRF be required? In my opinion no, since all old money vests at one schedule and all new money vests at new schedule.

Question 3: Is a 6 year graded schedule deemed equivalent to a 3 year graded schedule. My thinking is yes since the 6 yr graded and the 3 year cliff are deemed equal and if you are using a 3 year cliff you can partially vest prior to year 3.

My client just EFiled their 2010 Form 5500-SF. Relius Web Client sends me a status update email for the filing indicating that the User ID and PIN are missing and that processing has stopped. When I check on the EFAST website, the filing is there ! Is the DOL now accepting a filing under these conditions? I've not seen something like this before.

A participant misrepresents his age at time of hire. At time of retirement we find that he is 65 and not age 58. He gets greater benefits at there is no subsidy for early retirement . I'd like to give the person the lesser benefit but believe that I must follow the terms of the plan. The plan does not have an "error correction" section in it. Anyone want to chime in on what the plan can/should do?

Question to consider:

A business manager is planning to redirect a portion of employees' hourly contributions from their money purchase pension plan (deferred taxation) to a supplemental unemployment benefit (SUB) (non-taxed) fund. I think this is permissible as long as he keeps some money flowing into the money purchase plan. However, he would still like to give his members some options which include:

1. Whether the plan could offer members the option to select a small percentage of salary to the SUB plan and the remainder of the contribution to the MPPP; and

2. Whether the plan could offer members the option to select a certain percentage of salary into the SUB plan on an annual basis.

My initial reaction is that this will create an assignment of income problem for the employer and plan. I remember the IRS has taken the position that if an employee is given the choice between health (or some other non-taxable plan) benefits and a contribution to a 401(a) plan, the employee is taxable under the assignment of income doctrine. Thus, it seems the above two mentioned options will incur this assignment of income problem. Has anyone else run across anything like this? I was trying to find some concrete research on this and was having problems. Any input is greatly appreciated!

Is there a notice requirement for a one person plan (one owner, or owner + spouse) that has quarterlies missed? They intend to make full MRC, but just not practical for them to contribute quarterlies, and seems silly they would need to notify themselves.

Greetings,

I have searched previous board discussions and found very little information to my issue. I work for a non-profit and our bugdet is extremely tight.

My organization is exploring the option to allow the staff to apply vacation accruals to pay for their health insurance contribution (15% of the Health Premium).

My questions are:

1) Can we transfer the vacation accrual ($) to our fringes budget? Will this be consider part of wages? We would like to increase their take home pay but we only have a 52 week budget for wages.

2) If we decide to implement this option, Will this have to be done thru a Cafeteria Plan? Are they any other options?

We do have a FSA plan for Medical and Dependent Care reimbursement.

Your assistance and expertise to this matter is enormouly appreciated.

Thank you,

If the insurance company states in the Q&As that the contracts offered by them are NOT fully benefit-responsive, do we need to show both the contract value and the fair value on the statement of net assets available for benefits? For fully benefit-responsive contracts, I have been able to disclose the fair value and then the adjustment from fair to contract value to come up with net assets available for benefits at contract value. Where I have a hard time is when the contract is NOT fully benefit-responsive then what do you do? GAAP says to use fair value so do you only show fair value and NO contract value? The other caveat is that for limited-scope certifications, most of the times they certify the contract value and not necessarily the fair value. I want to see what are others doing in these situations. Thanks!

DBP (effective 1995) had a benefit formula of 10% Average Annual Comp times Years of Credited Service. (Average Annual Comp uses 3 highest years- from date of hire to date of employment termination.) The Plan was amended effective 1/1/03 to reduce the benefit to zero% of Average Annual Comp.

Question 1 - does this effectively freeze the Plan? No other language relative to freeze was used.

Question 2 - in determining the highest 3 years, do you look at comp earned in the years after the freeze? The Plan has not terminated, but soon will be.

Question 3 - 204(h) notice was not given for the reduction to 0%, but an SPD containing the change was provided approximately 7/1/03. Would failure to provide 204(h) notice render the change void, or would the reduction to zero% be effective with the issuance of the SPD?

This is a takeover plan. Thanks for all insights.

Hi everyone,

I am a small business owner and operate a SEP plan for myself and an employee. I recently switched accountants and my new accountant has discovered a problem with how my SEP has been operating for the past 8 years. The problems include:

• The previous accountant was using both my W-2 wages and my K-1 passthrough in determining my SEP contribution when he should have only been using W-2 wages. Thus my allowed SEP contributions have been computed much to high (a total of about $185K excess over 8 years).
  
• The previous accountant was not taking the deduction for the SEP contributions on the corp return - the deductions were being placed on my personal return line 28.
  

My new accountant is suggesting that we can self correct this problem by:

• Amending my tax returns (both corp and personal) for the past 8 years to take the deduction correctly on the corp return.
  
• Paying the 6% penalties for the past 8 years (compounded) on the execess contributions (and any investment income realized on those contributions).
  
• Not distributing the excess contributions from the plan - but continuing to pay the 6% penalty going forward until my allowed contributions "catch up" to the excess contributions that we previously made.
  

While this proposed remediation seems logical to me I am somewhat concerned after reading the EPCRS procedures. I am concerned that given the dollar amounts involved and the length of time this has been occurring that this is not something that can be self corrected and that going with the VCP is both necessary and prudent. I don't want to go through the lengthy process that the new accountant is proposing without some reasonable level of assurance that I will end up with a SEP plan that is in compliance.

Does anyone have thoughts on this? Thanks!

As a M&P prototype sponsor we received information from Relius regarding the DOL's recent enforcement and attention to a trustee's "duty to collect". Relius has made available language to amend at an individual plan level - after reviewing I am not sure that it is worth our time to implement this for all of our clients, but at the same time want to provide the best service. Just curious if anybody could share what their approach is/will be regarding implementing this type of amendment?

THX!!

Plan provides for payment to participants of a portion of the sales proceeds if (and only if) there is a change in control. (It is a 409A-compliant definition of change in control, if that's relevant). Payment is to be made at the same time as the sales proceeds are paid to the selling owners (if a stock sale) or to the corporation (if an asset sale). If part of the sales proceeds are in future installments or escrowed or subject to earn-out contingencies, participants get paid their respective shares only as those deferred or contingent payments are received, but in no event will participants have any right to a share of payments received later than 3 years after the change in control.

If this arrangement is a ST Deferral not subject to 409A, the corporation and one or more participants can agree to cancel their participation in exchange for a lump sum payment now (there is no change in control in sight). If the arrangement is subject to 409A, this would be a prohibited acceleration. (Can't use the voluntary termination exception here.)