Is there a participant notice requirement for removing loan provision from a 401k Plan?

Participant in Company's DB and 401(k) plans died two weeks after his divorce decree was entered. The decree wouldn't qualify as a QDRO under the terms of the statute, but would probably satisfy the requirements Judge Posner described in Wheaton (42 F.3d 1080); i.e., although the decree doesn't name the plans or include the necessary participant/alternate payee addresses, there is no ambiguity about who's who or what plan is at issue. Ex-wife now wants to enforce the decree against the plans, but didn't provide the divorce decree until after the participant died (i.e., there was no notice of an impending QDRO until after the participant died).

The plans say that, except as provided under a QDRO, in the event of a divorce, ex-spouses are deemed to predecease the participant and get nothing, unless the participant designates the ex-spouse as a beneficiary after the divorce. Instead, the participant named the couple's children as beneficiaries. Kids now want to enforce the beneficiary designations, arguing that no QDRO is on file and that the divorce decree isn't a QDRO.

I understand that post-death QDROs are permissible under the 2010 DOL regs, but the plans had no way of knowing a QDRO was possible when the kids asked for the money.

Who wins? We're in the 8th Cir., and I haven't found a case on point. Company would prefer to avoid an interpleader action but is afraid of getting sued whichever way it goes. My gut is that, now the plans have the decree, the ex-wife has 18 months to perfect a QDRO.

Plan participant died in 2010 and designated beneficiaries were paid out. Executrix of the estate is inquiring about accounts and balances held by decedent as of the date of death. Is there any obligation to provide information to the executrix (other than the information that there were named beneficiaries for the 401K account)? Since there were named beneficiaries is the account includable in the estate assets?

For participants in pay-status who have already attained their RBD's, how are RMDs calculated where the plan is terminated and the present value of a benefit is paid out as a lump sum (as elected by a participant with spousal consent)? This is necessary to know what portion of the lump sum is not eligible for rollover treatment pursuant to 402©(4)(B).

Does it matter that monthly payments have already been made during the same year as the termination-based lump sums?

Any thoughts are appreciated.

We have a Tribal Government establishing a 403(b) program to employees of their public community college. The plan will have a matching contribution subject to a 4 year graded vesting schedule. However, they wish to grant 100% immediate vesting to employees who had participated in their 401(k) plan. I understand that vesting is based on pre-ERISA rules, but I am not sure this provision is "kosher". Any thoughts?

Am I correct when determining a participant's vested account balance with regards to applying the 50% limit that employer contributions (profit sharing, safe harbor) accrued as of the last day of the previous plan year but not yet deposited to the participants' self-directed accounts are included as part of the vested account balance at the time a loan is issued?

Can you make any type of amendment to a safe harbor plan mid year? For instance, may you amend the hour requirement for a ps contribution, or the definition of an eligible employee?

It seems like a simple question, but our office is in debate whether you can make ANY type of amendment to a safe harbor plan mid-year, even if it has nothing to do with the safe harbor provision.

ETA: What would happen if we did an amendment mid-year to a safe harbor plan? Does it affect the safe harbor status?

thanks in advance!!

In determining the actuarial value of plan assets, receivable contributions are discounted to the actuarial valuation date at the equivalent interest rate for the prior valuation year. Should the accrued interest receivable reported in the Plan assets on the 5500 be discounted to the actuarial valuation date? If so, would you use the equivalent interest rate for the prior or current valuation year?

I recently terminated employment, and my FSA coverage ended as of my last day at work, about halfway through my monthly pay period.

My employer withheld a full month's FSA contribution from my final paycheck, however.

Any thoughts on whether this is common and/or accepted practice?

It strikes me as inconsistent with Treas. Reg. § 1.125-5(d)(3) (see IRS REG-142695-05 -- http://www.irs.gov/irb/2007-39_IRB/ar14.html): "When an employee ceases to be a participant, the cafeteria plan must pay the former participant any amount the former participant previously paid for coverage or benefits to the extent the previously paid amount relates to the period from the date the employee ceases to be a participant through the end of that plan year."

Thanks for the forum, BTW, it is a great resource.

Ted

What happens to a SIMPLE IRA plan maintained by an employer that goes out of business mid-year? I understand you cannot terminate a SIMPLE IRA plan mid-year, but I am curious about what happens in this situation. Thank you!

I have a calendar year medical practice (Co. A) with a SH PS 401k plan. Co A is merging into another larger practice (Co B) in June 2011. Co A's PS/401k plan is being terminated 5/28/11. Co B has a PS/401k plan.

The doctor/shareholders in Co. A always max out on their PS/401k contributions each year. Can they maximize their contribution in Co A's plan for the short year 1/1/11 - 5/28/11 and then receive an additional contribution in Co B's 2011 plan? The Co A shareholders will be minority shareholders in Co B.

I understand they can only defer $16,500 in 401k between the two plans for 2011, but can they double up on their PS contribution? Or does it depend on their ownership percentage in Co. B?

Thanks.

Govt. owned hospital buys the practice of a doc.

Doc sponsors his/her own plan (401a plan, not 403b plan).

Doc is now an employee of the hospital.

What can/must happen to the plan?

Is the plan frozen? Terminated?

Can the hospital continue to operate the plan?

Is it possible to credit a dividend that is not used to repay an exempt loan to allocated shares only, and no portion to shares in suspense?

LEt's say the SH Match excludes HCE's. Are the hce's elligible for a discretionary match without running the ACP Test? i.e., would the ACP Safe Harbor still apply to them? [edit: of course, I would apply all of the ACP Safe Harbor Rules; such as not going over 4% of pay].

In my situtaion, I am trying to eat through some forfeitures, and none of the non-highly's deferred. In fact only owners deferred.

A DB plan participant passed away without a spouse and no beneficiary designation form. The plan says that installment payments must be made to the participant's estate because the plan is underfunded and cannot pay out a lump sum. As a result, the estate must remain open for an indeterminate amount of time to receive these payments. I'm wondering if the executor can assign the benefit -- or if there isn't some way to get around keeping the estate open. Is the plan administrator just being stubborn, or is there really no other option?

The employer went trough chapter 11 bankruptcy; it has a self-insured plan for active employees. Before bankruptcy it offered retiree medical plan. Now, it has to offer the retirees COBRA coverage for life. Can the employer offer the retirees an insured plan and the active employees the same self-insured plan? Assume that the insured and self-insured plan offers the same benefits and coverage but the premiums for the insured plan are higher then the self-insured plan. The retirees would get the same benefits and coverage but would pay a higher premium than active employees. Is this allowed?

We have a governmental employer that just received 501c3 approval from the IRS, and due to an acquisition they will become an ERISA sponsor. Can a 457b governmental plan be restated as a top hat plan, or should the plan terminate and then a new top hat plan be set up?

Once the performance criteria has been established for incentive based compensation, can the criteria be changed during the perfromance period?

We have been asked what to do about an IRS auditer taking the position that plan amendments must be dated as well as signed. The plan sponsor has signed the documents and certified that they were timely made but the agent is pressing for more.

Does the IRS have the authority to do this?

As a matter of administrative practice, does anyone know what the IRS does in this situation?

A plan uses the basic safe harbor match formula calculated on a per pay period basis per the plan document. A participant’s annual compensation exceeds the $245,000 annual compensation limit (it is actually $901,000). The participant’s deferral percentage each pay period is less than 3% of his pay period compensation, therefore, he received a 100% match of his deferrals each pay period (he deferred $16,500 and received a match of $16,500). This results in a 6.73% match when divided by the $245,000 compensation limit. Is this calculation correct? It does not seem to be, but we haven’t been able to find anything that specifically states how to handle the $245,000 compensation limit with a per pay period match calculation.