Company A sponsors a SIMPLE IRA. Company A has been purchased by Company B through a stock purchase. Company B sponsors a safe harbor 401k plan. Company A will continue to maintain the SIMPLE IRA for its employees through the end of this year and then give notice that the SIMPLE IRA will cease 12/31/2011. For the employees of Company A who have not satisfied the two year requirement to rollover their SIMPLE IRA to the 401k plan, can they just keep their money in the SIMPLE until two years is up? In other words, does the clock continue to tick on the 2 year requirement even when the SIMPLE IRA is not actively receiving any contributions?

Additionally, the 2 year requirement does not apply to employees over age 59.5, correct?

Does anyone know where to locate a comprehensive list of "denial codes" that will need to be included in an adverse benefit determination (for non-grandfathered plans)? Thanks.

I have a client with two companies that are a controlled group. They would like the employees to qualify separately for participation for each co. So if an individual works 1000 hrs for Co. A, they can participate on comp earned with A. But if the same individual also works 400 hours with Co. B, comp earned with B would not be eligible for deferral b/c individual does not meet eligibility with B. any issues with that arrangement or does a controlled group rule override this type of eligibility arrangement?

I left a company back in 3/2008 and had an open 401k loan at the time. The company never issued a distribution notice or 1099R and when I contacted Principal Financial (administrator), they told me the company still had me listed as an active employee & never reported my end of employment.

After a 28 month period, I returned to the company & they immediately started my loan payroll deduction for the same amount I had previously paid. When I looked up my plan on Principal's website, the loan payoff date had been extended to compensate for the time I was gone. Now, after being back with this company for close to a year, they reamortized my loan using the original payoff date, increasing my payroll deduction by over 325% (totaling over $920/mo). This was done with absolutely no notice to me.

I asked if they could allow me to continue paying the loan at the original rate & adjust the payoff date. They said they could not & my only option was to either pay the increased amount or default on the loan. Is it legal for them to do this?

Can a Plan start an EACA mid-year but just not have the 6-month ADP/ACP excess rule applied for the short year but still have the permissible withdrawal rule applied for that year?

a 10 participant plan that was to be terminated circa 2005, but never did, started a new plan in 2005, in which active participants rolled their funds over into the new plan at that time. only terminated participants were left in original plan. Sponsor did not terminate, file 5500's past 2005, or restate for EGTRRA. DFVC has been done and VCP filing has been submitted. IRS has sent a letter regarding VCP filing and asks to list those PPA amendments that were not timely adopted. They give a 3 page list. My first inkling is to check all of them, however this is a standardized profit sharing plan and a lot of the provisions would not apply (Comply with 411(b)(5), Implement EACA/QACA. comply with Codes 436, 432, etc). Many standardized plans offered default elections and would not have elected amendments such as HEART. However, should we choose them as "failing to timely adopt" since the sponsor could have elected to over ride such defaults?

Without actually performing the calculations of plan termination liability is there any reasonable way to estimate the PVAB for participants only knowing the Funding Target for a frozen plan? Plan Sponsor thinks difference b/t Funding Target and Market Value of Assets is what they would need to fund to terminate the Plan and pay everyone out 100% of their benefit. This is not the case, I know typically the lump sums are greater than the ongoing liability. Is there a "rule of thumb" about how much?

I have a situation where an employee was hired in january 2010

he worked 1000 hours and then terminated in August 2010

he then in February 2011

Eligibility is 1 year of service. A year of service is defined as a 12 moth period in which you complete 1000 hours.

Entry dates are quarterly

When does he enter the plan. We have someone in our office that says this employee, when rehired, comes right into the plan, b/c he had 1000 hours within 12 months... even though he didn't make it 12 months and didn't make it to an entry date..the fact that he had 1000 hours is all that was needed

Others say, when rehired , he comes in and has to meet the eligibility requirements again...because he never met the eligibility before terminating. ..meaning he did not work 12 months with 1000 hours

Who is correct?

I have a plan that is a nonamender for GUST and also failed 401(a)(4) for 2008. Should their be two VCP submissions - one for each failure with it's own sanction and filed together? Or or the two independent of each other?

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.