A participant applied for a hardship withdrawal siting foreclosure/eviction. They provided a completed hardship application along with a foreclosure notice and a lease agreement. The participant signed a lease for a house. The landlord is behind on mortgage payments and now the house is being foreclosed on. Does this qualify as a hardship? To prevent your landlord from foreclosure?

I understand the thought process behind the request: "If the property is foreclosed on, then I'll be evicted" but it's not as though the participant is behind on rent and being evicted. Furthermore, the hardship application lists a different address than the leased property. The lease is month to month and the agreement was signed 8 months ago. For all I know the participant could have moved out.

Any thoughts?

A plan has several participants who in 2010 received taxable wages however deferrals were not with held from this pay.

1) Can the employer go back and with hold it and deposit it? Would this not involve amending those participants W-2's as well as calculating and paying excise taxes on what those deferrals would have earned.

2) Would a VCP filing have to be made?

Thank you

A professional sve employer has

8 active employees with an accrued benefit and

11 terminated vested employees with an accrued benefit

the plan has not had any accruals (not explicitly frozen, bit formula expired some years ago so no new accruals) for several years.

There are 19 additional employees who meet the plan's eligibility requirement, but of course have an accd ben of $0.

So the question is how many "active participants" are there?

Of course the PBGC premium filing instructions provide that a participant is someone that has a benefit liability (whether active or inactive).

So on that basis there would be 8 active participants and 11 inactive participants.

But is that the proper definition for "active participant" when determining number of active participants in order to determine if a plan is covered by pbgc.

Any comments supported with a cite of course

thanks

The DOL's FAQ on DFVCP does not make it very clear about mailing in a check and sending in a signed copy of the 5500, in lieu of online payment for late filing of a MP plan's 2008 and 2009 5500.

It appears I can still do it this way. The client mailed me a check for $1,500. Would I just send signed copies of the signed return, plus the check to:

DFVCP

P.O. Box 71361

Philadelphia, PA 19176-1361

I want to avoid having to return the check to the client. Thanks !

This question came up today from a DB plan sponsor of a plan that we audit (I am a CPA) and, while I am far from the most seasoned practitioner on this board, I was stumped. Any help would much appreciated.

Schedule R, Part III, Question 9 asks whether any amendments adopted during the plan year increased the value of benefits. The instructions indicate that the "increased" box should be checked if the amendment increased the value of benefits "in any way", and include in the examples "earlier eligibility for some benefits" and "more rapid vesting."

The HEART Act, among other things, requires 100% vesting in the case of death while performing qualified miliatry service. There are other provisions that can increase the value of benefits.

Does this mean that the "increased" box should be adopted in the case of all adopters of HEART Act amendments? Based on the instructions, I see no way around it. However, I have seen several Schedules R where this was not done.

Not sure if this post should be in the X-testing section, but.....I think it was determined in prior posts that 401(a) plans and 403(b) plans are tested separately for non-discrimination, at least when both are DC plans. We have an employer considering a soft freeze to their DB plan and allowing the new entrants to recieve an employer allocation in their 403(b) plan. Since both plans have uniform benfit/allocation formulas if they both pass the 70% coverage test all is good. But what happens when all is not good with the 70% coverage test in either plan?? If both were 401(a) plans we would move on to rate group and average benefit test where the EBARs would be combined. But in my circumstance with a 401(a) and 403(b) plan, would the EBARs still be combined for average benefits test?? Thanks.

401(k) has no exclusions on def. of comp. Trustee wants to amend to exclude bonuses then asked if the participants could be given the option to defer on bonuses if they wanted.

My guess is no as it would not be uniform and non-discriminatory

My question is as follows:

The instructions to Schedule A says that the insurance company is required to provide you will all the information necessary to complete the Schedule A. I reviewed the instructions and there is nothing about reporting premiums or benefits paid on the accrual or cash basis. If we audit the plan sponsor of a welfare plan, should we report the accrued claims to be paid at year end but not reported on the schedule A by the insurance company. I assume that the insurance company reports amounts on the cash basis.

Please advise.

Thank you,

Annette Leerhoff

I have an employee who previously terminated, reached age 70 1/2 and began receiving RMD's. They have since became a rehired employee. What are the rules now on the RMD requirements? Do they have to continue taking RMD's or can they waive them while employed? If they can waive them, how would this officially occur?

I have about 20 plans that are the old quarterly valuation plans. The Participants have the choice of 5 to 10 funds in the same family. They prefer this to the daily val platforms because of the lower cost. In the real world can anyone afford to set up the website that is going to be required under the new disclosure regs.

can anyone give me an estimate of what it would cost to add this to an employer's website?

Any ideas about this would be very welcome.

How long is everyone keeping plan records?

I know it's the ER's ultimate responsibility- but we know how that goes.

I think we need to keep all years on plans that we still have, but on plans that have left our

services - what do we need to keep?

I think we would at a minimum have to keep a copy of the plan documents - Prototype we sponsored.

One of my bosses thinks we should just box everything up and give it to the client when they leave.

I, however disagree and need to give him more information on why we need to keep it. I guess it's becoming a storage issue.

Just wondered what others are doing. We are now scanning stuff, but didn't in the past. I don't want to spend the time scanning stuff we dont' need.

Thanks

Pat

We have a two-participant profit sharing plan with discretionary contributions. One participant has a life insurance policy. Is it possible for the plan to pay the premium in a year where they don't make a p/s contribution? Logic tells me no..or at least that the contribution needs to be sufficient to cover the premium. The participant without a premium should receive an allocation also.

How would it work if the premium is paid for with "aged" money? For 5500 reporting purposes, would the insurance premium be shown as a transfer from the other investment account to the life insurance policy?

I'm not finding any guidance to support my thoughts.

Thanks.

The plan excludes Union Employees. One of the 5.5% owners is a union employee and he was allowed to defer into this plan. Is this the same issue as if any HCE had been allowed to participate in violation of plan provisions? Does the fact that a union plan is involved for all of the other union employees make a difference in how this is corrected? I have never seen a situation like this.

Would appreciate comments on the following:

Facts:

Calendar year DB Plan frozen in 2007

Plan pays lump sums

FT 1/1/2011=900,000

Assets 1/1/2011=675,000

FSCOB=PFB=0

2011 MRC=50,000

2011 Effective Rate=5%

2010 AFTAP=100% (e.g., 2011 quarterlies not required)

2011 AFTAP certified in April 2011 as 75% and restriction notice provided to participants

Plan Sponsor wants to reopen plan effective 1/1/2011 and adopts amendment 6/1/2011

FT will increase from 900,000 to 1,000,000 and TNC will increase from 0 to 40,000.

On December 31, 2011, Plan Sponsor makes contribution of 150,000.

Conclusion: To make amendment effective, Plan Sponsor must contribute the equivalent

(a) 45,000 to bring AFTAP to 80%

(b) 40,000 for the TNC

Discounted value of contribution is 142,857. Excess contribution is

142,857-50,000-45,000-40,000=7,857

Participant terminates employment on 10/1/2011. Benefit is the frozen benefit and

lump sum restrictions apply because amendment is not effectively in place until 12/31/2011

after 436 contribution is made.

EA will recertify AFTAP as of 12/31/2011 as 80% and participants will be notified that

restrictions have been removed.

Has anyone worked with Valic or AXA and had to import a download of their participant recordkeeping data into Relius? If so, was the process easy, tricky or difficult.

Thanks in advance.

A CB/PS combo plan that uses a carveout is not passing 401(a)(26) due to a number of terminations during the year (all above 500 hours). I am preparing a corrective amendment adding 3 particpants for the plan year to bring DB participation up to 40% of nonexcludables. The 3 participants that the sponsor wants to include are all HCE's. After the amendment, the plan will pass 401(a)(26), 410(b) and 401(a)(26), but I am just leary about benefitting HCE's only in the corrective. Is this allowed?

I've reviewed the 2010 PBGC Premium Payment Instructions document. I can't find examples of how one would exactly determine the participant count date for the spun off plan in a mid-year spinoff. In the Premium Payment Instructions, there is language that "premium proration is not available for overlapping premium payments resulting from spinoff". I've also looked at some PP presentations by Keightley & Ashner LLP...one dated October 21, 2007 from a presentation at the ASPPA Annual Conference, one dated october 28, 2008 at the Annual Meeting of the Conference of Consulting Actuaries and one dated June 16, 2010 at the Great Lakes Benefit Conference. All of these presentations indicate that there are duplicate premiums in all mid-year spinoffs.

While realizing that guidance could change for a 2012 spinoff, if we assume 1) the guidance for 2012 remains the same as 2010, 2) the pre-spinoff plan is a large plan and both that plan and the "spinco/spunoff" company plan are large plans post spinoff and the spinoff occurs after the fixed-rate premium filing is made for 2012 and before the Comprehensive filing is made for 2012, no VRP or other premium (other than the fixed-rate premium) is due from any of the plans, then how would the participant counts be determined for the 2012 post-spinoff filings.

I work better with illustrations...so using hypothetical participant counts..see if the below is correct and advise as to the premium filing (and participant count) of the spun-off plan for 2012. Any guidance/thoughts (including citing specific PBGC guidance) would be helpful.

The 2012 pre-spinoff plan estimated participant count is 46,000. This is the participant count as of the last day of the plan year preceding the Premium Payment Year..thus in this case the estimated count at 12-31-11. This is the count used for the 2012 fixed rate filing for that plan.

For the 2012 post-spinoff ongoing plan (same ongoing plan with the same employer as per the immediately preceding paragraph) Comprehensive filing.... assuming that the estimated participant count and the final participant count are the same, then 46,000 is used as the final participant count for that plan. No additional premium is due from that plan from that paid in the fixed rate filing.

2012 post-spin off spinco/spunoff plan's "only?" 2012 filing...what would the participant count be (and when measured) assuming say only 7,500 participants

came from the pre-spin off plan to the plan created by the spinoff (spinco's plan).

Is the reference to duplicate premiums in the law firm presentations (which is consistent with "what I have heard) tied to the participant count/fixed rate filings?

Thanks so much. Spinoffs are "new" for me.

I have a client who is/was a 50 – 50 shareholder in a corporation. The corporation went into receivership and has completely withdrawn from the Central States Southeast and Southwest Areas Pension Fund. The pension fund has previously sent 4219(a) information requests to the receiver, requesting information about the company, but now the pension fund is requesting personal information from my client, including a request for copies of his personal income tax returns.

I don’t do much work with multiemployer plans, but can a shareholder be compelled to respond and provide this type of personal information under ERISA 4219(a)? Any assistance would be appreciated. Thank you.

7/1/10 AFTAP is 85%, no 2011 certification so at 10/1/11 the 2011 presumed AFTAP is 75%, 50% restrictions apply. Prior to October 30, 2011 AFTAP is certified to at least 80%. Must the 436 participant notice still be provided?? Thanks.

The ABC Plan has a participant contributing to the plan who lives in Puerto Rico. (The client does not have a Puerto Rico plan). The PR resident has contributed $16,500 year to date. The client contacted me to determine if this participant should only have contributed the maximum based on the Puerto Rico limits or if the participant can contribute the 402g limit. The plan document does not address this or exclude this participant from eligibility.

I have two questions:

1) Does the plan need to be dually qualified to let a resident of Puerto Rico contribute?

2) If he can contribute, is he subject to the PR limits?