I have a non-profit that sponsors a 401(k) plan. They have had over 100 participants for several years and have had the independent audit for the 5500 prepared for those years as well. This year, the accountant has told the employer that they will also need to have their "501©(3)" forms completed not only for the 401(k) plan, but also for the company's life insurance and short-term disability policies.

Any idea what this means?

I went to irs.gov and did not see any forms labeled as 501©(3) forms.

Maybe the accountant means that they need to file 5500's for insurance and disability policies, but why would he include the 401k plan in that phrasing when he knows that is already being filed every year?

Any advice is appreciated.

Under 401(a)(26), a DB plan has to cover on 40% of employees.

Question: Does the plan document have to specifiy which employee?

Question: Can you pick and choose the employees to be included (as long as you pass the other nondiscrimination test)?

Thanks for all responses.

A DB plan is co-sponsored by two partnerships with identical ownership; so it's a controlled group. The high-three-year average comp that's been established came partly from partnership A and partly from partnership B. How is the deduction split? Does it matter what portion of the deduction is taken by company A versus company B?

These partnerships also sponsor a 401k plan. Does it matter which partnership takes the deduction for the safe harbor and profit sharing contributions? Or in what ratios?

Thanks,

Greg

Anyone know where I can find a copy of the IRS field directive concerning notice to plan trustees about the contribution amount for cross-tested plans?

I've been searching for awhile this morning with no luck!

Thanks!

Laura

I need to prepare a 2008 Form 5500 under DFVCP. I understand that I will be using the current form (2010) for the E-Filing. Do I also need to prepare the paper version of the 2008 forms and attach to the E-File? The current FAQ appears to allow just the current year form to be completed, although last year I thought I read that the applicable paper year form was also required to be attached. It seems the current FAQ makes this easier for us? Thanks.

I understand that an employer who has adopted a VS Plan that is covered by a favorable opinion letter may apply for a determination letter upon its termination by filing a 5310 (as opposed to a 5307). Assuming the VS plan is up to date as of its termination, am I correct in understanding that the employer may file a 5310 and that the VS plan's cycle is not relevant? If an amendment is necessary, does the plan convert to IDP status for purposes of the submission?

If I have a welfare plan that is "top hat" but it doesn't offer deferred compensation, is it subject to the fiduciary duty rules under ERISA?

Transition reporting relief applicable to pre-2009 annuity contracts or accounts require that, in order for the contract/account to be excluded from plan assets for reporting purposes, all rights and benefits under the contract or account must be "legally enforceable against the insurer or custodian by the individual owner of the contract or account without any involvement of the employer." (FAB 2009-2). FAB 2010-1 clarified that employer confirmation of the account or contract holder's employment status (active, terminated) is not "involvement" for these purposes.

The question is whether or not employer involvement could be inferred from self-serving contract or annuity endorsement language regarding required minimum distributions, such as the example below:

In this particular instance the carrier notifies participants on their 70th birthday of the upcoming requirement to begin RMDs but does not provide follow-up contact. It is my opinion that the self-serving "we assume no responsibility" language in the endorsement does not give rise to any legal right enforceable against the employer, such that a contract or account subject to such language (and meeting other requirements of FAB 2009-2) would still be excludible under 2009-2 transition relief. Basically the responsibility for timely RMDs lies with the former employee and the endorsement language does not change that. However I would be interested in hearing other viewpoints/comments on the issue particularly from readers who have reviewed the same or similar endorsement language.

An association of businesses (& I do not know under what Section of the Code it falls) maintains a plan for the employees of its member businesses. The member businesses do not adopt the Plan, but yet their employees can particiapte in the association's plan.

On what basis is this permissible?

Partnership issued checks for partner deferrals upon completion of the K-1s in early April. Financial institution still has not received checks. Checks were not mailed return receipt so there is no tracking. Tax returns have been filed, showing the deferrals. Can client stop payment and re-issue the checks to correct this?

I know we may have an issue with DOL and the 7 day deposit rule (it is a small employer), but for now, client's concern is how to fix this as it pertains to IRS deductability.

Thanks!

I'm reviewing a QDRO for a 403(b) Plan. The Plan permits loans. The QDRO states that the alternate payee cannot obtain a loan. Is it permissible for a QDRO to prevent the alternate payee from obtaining a loan from his share of the account?

In our situation, the employer pays employee only major medical insurance premium. Employees can pre-tax family potion. There is not a cash out option if the employee declines the insurance. We have noticed that most discrimination rules do mention a cash out option where the employer will provide cash if employee declines non-taxable benefit.

How do the discrimination rules change in our situation?

And in our situation, should the employer provided potion be mentioned in the plan doc's?

If a company's ESOP has terminated participants with significant account balances and the company is currently cash poor, would the best option be to distribute the shares to the participant?

Also, can the plan sponsor pick n choose which participants get paid out in shares?

A plan with an existing 401(k) safe harbor wishes to add a loan provision mid plan year. Does adding the loan provision have an impact on the withdrawal section of the required 401(k) safe harbor notice? If the safe harbor contributions are subject to being "withdrawn" as part of a loan, my guess here is yes. The plan would need to wait until the beginning of the next plan year to add a loan provision. Does this make sense? Or does adding a loan provision not affect the safe harbor notice? your thoughts are appreciated.

It seems to me that this rule doesn't really work for multiemployer plans. § 2708 of the PPACA prohibits "excessive" waiting periods: "A group health plan and a health insurance issuer offering group health insurance coverage shall not apply any waiting period (as defined in section 2704(b)(4)) that exceeds 90 days."

90 days from what? The cross reference isn't very helpful. § 2704(b)(4) defines "waiting period" as follows: "The term ‘‘waiting period’’ means, with respect to a group health plan and an individual who is a potential participant or beneficiary in the plan, the period that must pass with respect to the individual before the individual is eligible to be covered for benefits under the terms of the plan."

How do we apply this 90-day rule to a multiemployer plan, where eligibility keys off of details of the employee's work history, rather than merely the passage of time? For example, assume that the plan says an employee is eligible for benefits after an employer has been obligated to contribute on his or her behalf for 6 months. I don't think reducing that 6 months to 90 days will work (and would have to be bargained for, anyway). There are all sorts of other complications (probationary periods in the CBA, etc.)

I can't find any guidance on this. Any comments would be appreciated. Thanks.

A participant terminated back in 2004 and was recently rehired in 2011. During her initial time of employment (from 1990-2004) she had met the age and service requirements for the 401k Plan and was a 100% vested participant. In 2005 the plan sponsor put in a DB plan. Does she become a participant in the DB plan upon her rehire in 2011 because she had previously met the age and service requirements for this Plan? Or would she need to satisfy the eligibility for this plan from her date of rehire forward? Based on the information I have found she would enter immediately.

A distribution was processed based on incorrect vesting, and the participant received a little over $400 too much as a result. For various reasons, the employer will not try to get the money back from the participant. Instead, the employer will be making a contribution to the plan for the excess amount.

So the participant is keeping everything that she got. Is there any affect on her 1099 as a result of this since she got something she shouldn't have?

Can a plan provide that an eligible employee enters the plan on the earlier of (i) crediting of one year of service and attainment of at least age 21, or (ii) attainment of age 30?

We have received the basic information from one of our insurance providers to complete Schecule A of the 5500 for our welfare benefit account. When I asked if it was experience related or not, I was told our plan was "10% experienced". When I then asked for the detailed information to complete the section for experienced-related plans, they told me they provided the only information they were required to. Does this make sense?

Thanks!

I did a search, and there's some conversation about this subject, but I'd like to see if anyone has changed or has additional opinions.

Plan is a safe harbor match plan. Only two employees - one is HC and one is NHC. The NHC does NOT defer. For 2009, the employer forgot to contribute the SH match of $960.00 on his own behalf.

Two (at least) possible interpretations.

1. Take the hard line, and say that since the SH match was not made by 12-31-2010, the plan fails safe harbor, and therefore must be tested with ADP, which would obviously fail.

2. Take the approach that not only is the above ridiculous, but isn't even permissible, as the plan can't provide that failure to contribute SH causes the plan to revert to ADP testing, so the safe harbor MUST be made.

I say 2 is the way to go - correct under SCP as a significant error, as we are within the 2 year timeframe, and contribute the $960.00 match plus earnings.

Votes?