For those of you using the FIRE system to batch file (FT Williams, etc), are you having the client signing the SSA, or just sending thenm a copy. FGT Williams is sayiong that this is a "best practice" but if it's not a requirement, I would like to know that as well.

Is it a valid hardship distribution if the request is to repay a loan taken out to help with the payment of tuition? What if the request is to repay a loan taken for medical expenses? (masteff?)

I have an endorsement split dollar agreement where the only benefit is the death benefit (there's no element of deferred compensation, the employee is unable to access any cash, receive a loan etc...)

I believe it is an ERISA welfare plan. Although it's technically a welfare plan, I thought this NQDC board was the best place to post the question since split dollar arrangements are typically established for executives.

I'm trying to figure out how to deal with the ERISA claims procedures that need to go in place. I haven't seen the insurance policy, but I can't imagine claims reivew process of the insurer will be consistent with ERISA. Maybe I'm wrong about that. Does anyone have any experience with this or thoughts on how to deal with inconsistencies between ERISA claims procedures and those of an insurance policy? Do insurers typically agree to follow ERISA claims procedures? Any insight would be greatly appreciated. Thank you.

Participant should have entered plan 4/1/10, but actually was notified on 10/1/10, began Roth deferral contributions of 15% at that point. The Plan is a safe harbor non-elective 3%, which was calculated correctly for 2010. In reading the correction for the missed deferrals the employer will have to make up a QNEC for the 4/1/10 thru 10/1/10 of 50% of the compensation for that period.

My question is regarding what contribution percentage to use in calculating the QNEC since it is a safe harbor plan. Would I use his elected 15%, the plans ADP percentage or 3% since it is a safe harbor non-elective plan? Also, I didn't see anything extra that I needed to do since his deferrals were Roth, or did I miss reading it?

Thanks all,

A plan participant requested a rollover distribution to his then-current employer's plan. The rollover check was never deposited into the plan. Five years later the plan administrator sends a list of uncleared checks to the plan sponsor. The PS immediately recognizes the payee -- he has been rehired and is a current employee.

The PA says the check must be reissued as a rollover. Payee attempted to establish an IRA to receive but the IRA custodian said no -- the 60-day rollover deadline has passed.

What are the corrections possible?

We acquired a client last year that had a terminated DC plan #001 and a 401(k) Profit sharing plan which was effective 1/1/99.

There were two documents and 2 form 5500's were filed; however, both 5500's reported #001 since 1999. The client was aware both forms filed #001; however, the prior TPA never amended the forms.

How far back do we need to amend the 401(k) profit sharing 5500's?

Company A has two plans. Plan one is for union employees. Plan two is for non-union employees.

During the year people move from union status to non-union status. The company’s record keeper is moving the account balance for these people from plan one to plan two.

Can they do this, or are they kicking people out of a plan against the rules? (Assume there are people with a balance >$5,000) Also, note both plans still exist so this isn’t a plan merger.

What about a former union employee who has terminated and for reasons unknown is moved from plan one to plan two. This seems less like to be ok.

Not sure at this point if the plans are the same in terms of provisions. But for now assume they keep track of the BRF like vesting on the moved amounts. (It is a firm audit client and the audit group is wondering about this.)

Does anyone have a hard cite for one way or the other?

Can a safe harbor match plan with an ACP-free additional discretionary match apply a 1-year of service eligibility requirement for the regular safe harbor match and apply a 2-years of service eligibility requirment for the ACP-free additional discretionary match?

We currently sponsor a Corbel prototype document. We are cponsidiering a VS doucment instead of the prototype with the next restatement. Any reason not to sponsor the VS instead?

Thanks for any input.

Let me explain, I am working on a large filer plan that has a few life insurance policies for a plan participant as part of the plan's assets. This is in addition to the mutual funds the rest of the accounts are invested in. The policies are registered to the plan FBO the participant, as the plan offers Life Insurance as an alternative investment. When reconciling the plan's assets, I would normally include the Cash Value of the policies on my Balance Sheet and ultimately the Form 5500 Schedule H (as well as Schedule A if necessary). I am receiving conflicting information that this is not correct. That the Life Insurance policies do not need to be reported as part of the plan's assets in the financials and therefore the Form 5500.

Hi,

We have a new client. While working on the 2010 Form 5500, the client realized that they included the wrong participant count information on the 2009 Form 5500-SF. On the 2009 Form 5500, the client reported 69 participants. In reality, they had 43. Everything else on the 2009 Form 5500-SF was correct.

My question is - would you amend for this? I know it is technically wrong but am not sure we should advise the client to amend. The client will do whatever we suggest.

Thank you!

I have a client who retired May 2010 and was told by his employer's plan custodian that before rolling over his 401k to his IRA, he must first take his RMD from the 401k, then they would roll the balance to the IRA. That's ridiculous, but I need to find the IRS Code that says it is! I know he'll have to take the plan balance into consideration for his distributions, but it doesn't have to come out before we roll the plan to his 401k.

*He plans on making a contribution to his church with the distribution and we're unable to take it from the 401k, so we figured we'd roll the whole 401k to his IRA then take 'both' distributions from the IRA. (He turns 70-1/2 in Nov. and between his accountant and I we determined it best to take it this year.) Anyone know where I can find the IRC (not Pub 590) that says we don't have to take the RMD before rolling it? Thank you,

I used to think that an on-going plan could not amend plan for safe harbor after the start of the plan year.

But if my understanding is correct section 1.401(k)-3(f) provides that the plan can be amended after the first day of plan year to retroactively provide a non elective safe harbor effective as of BOY.

Is that agreed? thanks

Faculty at a school are only working September to May, 20 hours a week. They are paid over a 12 month period. May the employer treat the the summer months as paidt time off, creditign them ith 20 hours a week as paid time off for the summer months when they are not teaching?

So for example, if we credit the summer months as hours of service, then they will exceed 1,000 hours (vesting years, etc). If we do not count the summer months, they are below 1,000 hours.

Does the answer change if they elect to be paid over teh school year, as opposed to the calendar year?

Seems like a gray area...

Need some help...

Plan has been safe harbor since 2002. Prior to the start of 2011, plan decides to remove safe harbor provision. They also elect to use the prior year testing method for 2011. Can they do that? Which I think they can...but what average would you use for the NHCEs in the test. Would you have to go back and "run" a test for 2010 to get the NHCE average?

Any thoughts would be greatly appreciated.

Yes, a death distribution was made to the wrong beneficiary. In 2010, a participant passes away and his wife receives a distribution of the participant's account, per the beneficiary designation form that both the employer and TPA firm had on file. A year goes by and the employer then comes across a much more recent beneficiary form in which the participant names his two children as primary beneficiaries. The spousal consent signed by his wife was witnessed by a Notary and appears valid.

Any thoughts on how to handle this situation? The only similar topic that I can find is with a distribution overpayment and to try to get his wife to return the overpayment. But, realistically, she won't be inclined to return the funds, especially after a year has gone by.

Thanks for any help.

BTH

401 (k) Plan currently uses forfeiture to reduce match contributions (discretionary match) in the plan year following the year when the forfeiture takes place. Forfeitures are not used to pay plan expenses.

Can the plan be amended currently to use the forfeitures to pay plan expenses rather than allocate for the current plan year? There's about $2,500 in forfeiture that would have been available for 2011 (from 2010 distributions) and an additional $2,500 in forfeiture that occurred from 2011 distributions that would have been available in 2012.

Is the use of this forfeiture considered a cut-back in benefit if used to pay plan expenses? The match is discretionary and employer does not wish to provide a match in 2011 and 2012.

Thanks.

I prepare the annual Form 5500 for a Welfare Plan with some of their benefits under a Cafeteria Plan.

A Schedule A was provided from the insurance covering all the benefits that they provide (pre-tax and post tax, less than 100 participants and more than 100 participants).

Some of the benefits listed are post tax and some have more than 100 participants.

Some of the benefits are pre-taxed and covered under a Cafeteria Plan, but these particular benefits have less than 100 participants.

What do I report? Should I report only the pre-tax benefits under the cafeteria plan even though they only have 26 participants? Do I exclude reporting the post tax benefits even though they have more than 100 participants?

The remaining Schedule A from other insurance companies consist of pre-tax benefits under the cafeteria plan and all have more than 100 participants.

I appreciate any guidance in this matter.

Has anyone heard of a PEO that is under a collective bargaining agreement? They say they become the "common law employer" and sign a collective bargaining agreement with a union. And it will allow for the owners to set up a DB plan that excludes the employees that are in the PEO. I have found one. I was wondering if anyone had names of some others out there that I could contact.

I have a plan that froze benefits and service for non-union employees as of a 1/31/2010. Date of Entry is defined as the first of the month coinciding with or after 12 months and 1000 hours. A non-union participant was hired on 9/15/2009. Can he enter the plan on 10/1/2010, although it has been frozen? The amendment freezing the plan states that the only eligible employees after 1/31/2010 are Union Employees. I do not think he is Eligible, whereas there are others in the office that disagree. What do you think?

Thanks ahead of time!