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!!

a plan wants to make an amendment to increase the benefit of a participant.

the plan has 3 participants, all HCEs

they would like to amend plan to increase the benefit of a deceased participant up to the 415 limit. the spouse has not yet received the pension.

So his benefit is 5k per month and 415 limit is 8k, can the benefit be increased thus increasing what the survivor will receive?

thanks

I have a money purchase plan that did not make the minimum contributions for the past two years. The plan sponsor knows that they need to make up the lost contributions plus interest. My question concerns filing a 5330 and the associated excise tax. I have come across some information indicating that money purchase plans are exempt from the excise tax. Does anyone else have this understanding?

Has anyone addressed this collossal issue yet? Some of these 403b's who have nver reproted before could have hundreds of people to report. Any relief expected? Is anyone talking about this stuff? Allso, has anyone had success getting full socials from TIAA for this purpose?

Company A has sponsored a PS plan that has covered many employees for several years. A 25% owner of co. A also owns 95% of company B, which never had any employees. Co. A figures out that its workers comp premiums would be much less if they show all of the employees working for co. B and on 1/1/11 start having co. A pay all payroll amounts to co. B, who in turn pay the employees (and, I assume, the owners). This would appear to indicate that everyone's employment terminated at co. A and they were hired by co. B on 1/1/11, and that the "same-desk" rule is not invoked since neither co. A or its assets were sold. If this is correct, all of these employees are now allowed to receive distributions even though they're working at the same location doing the same job they had before 1/1/11.

Co. A is still in existence, at least on paper, and its 3 owners haven't yet decided whether they would like to keep the plan and continue providing benefits to the employees (they may still decide to keep making small contributions in the future). If they want to keep it going, I suppose the plan can be amended to include co. B as a participating employer. Although both companies once in a while work together to perform services for third persons, each company provides less than 5% of the other company's revenue. And since providing payroll services is not a service historically performed in the service field of co. B, it appears that an affiliated service group situation does not exist.

Althought the payroll arrangement may not be legit, is it correct to consider all of the participants to now be terminated employees and the plan will not have any new participants until co. A starts paying the compensations? All help is greatly appreciated.

With respect to the 20%-level of bona fide services under the 409A definition of "separation from service," does anybody know what factors the IRS will look at to determine whether or not the (former?) employee is in fact performing less than 20% of his or her previous services?

In other words, how do they determine the level of services that were performed while working as well as the level of services performed after the purported separation from service? Time spent working? Projects worked on? Responsibilities?

What constitutes "bona fide services"?

Interested in hearing anybody's thoughts on this.

I think I know the answer but can an employer remove "partial withdrawals" and "substantially equal installments" and leave only lump sum as the distribution option? This is a 401(k) Plan.

No wonder the debt ceiling needs painting. One would think that the US has never faced more challenging problems than the two no-brainer forms.