The Plan's LOAN PROCEDURES state that The loan will become payable in full on your termination of employment. Does the Cure Period apply here? The cure period is stated on the Plan's LOAN PROCEDURES

Could the terminated participant pay it back with 90 days and not be in default?

Does the cure period apply to both active and terminated employees? Even if the loan pocilty states "will become payable in full on your termination of employment."

Form 8955-SSA and Instructions were released on Saturday. Seems pretty straightforward. Only thing I notice is that there will be a different zip code for mailing in the 5558, whenever that form is released.

If I am missing something, please advise.

Thanks.

DPSRICH

The Big Screw, age 62, owns and operates ScrewYa Corporation (SYC). SYC employees 1,000 NHCEs. Benefits are accrued over the the employee's working life time. And it just so happens that all employees are age 40 and were hired at age 20 when the Big Screw started SYC 20 years ago at his age 42. There has been no turnover or new hires. The Plan provides for lump sums to be determined using a 2 1/2% lump sum interest rate and The Big Screw's accrued benefit is just such so that under all the hoops his 2 1/2% lump sum at age 62 is exactly the maximum 415 benefit. So, The Big Screw retires and immediately the Board of Directors, of which The Big Screw is chairman, amends the Plan to modify the lump sum interest rate to the 417(e) rates with, of course, the accrued benefits at the time of amendment lumped sum on wear away basis to 2 1/2% and let's just assume SYC is such a great place to work that all keep working until the grandfather wears away.

So, The Big Screw -- the only HCE -- has his benefit determined using 2 1/2% and 1,000 NHCEs have their lump sum computed using 417(e).

Any comments (other than I just have too much time on my hands)?

Earlier this year I left a small business after working there for 7 years.

We had a 401k plan there. I once overheard the 401k administrator explaining that it was a safe harbor plan and so there was a mandatory 3% contribution per person. I remember it very clearly because a few days later we had a staff meeting and the company owner explained the 3% contribution as a generous gift by him. I just thought it was hilarious that he tried to make himself out to be Santa Claus.

I only just realized today that the 3% contribution was made only once in the 7 years I was there. Is my former employer in violation of the law?

Some facts that may or may not be relevant:

(1) I usually worked only about 30-35 hours per week at this job - I had children at home at the time and this job allowed me to be with them after school.

(2) There were a few months over the summers in the third and fifth years when I worked less than 20 hours per week.

(3) I never made any contributions myself - my husband makes a lot more money that I did and his employer offers a truly generous match.

(4) While there might have been a handful of weeks during the 7 years that I did work 40 hours, those were rare. For no period of time did I consistently work 40 hours per week.

NOTE: if it had ever been communicated to me that the plan had changed to a match instead of an employer 3% contribution, I definitely would have contributed to get the match.

Is my former employer in violation of the law?

If so, what remedies do I have to receive the funds that I am due?

What kind of legal/IRS consequences would there be for my former employer?

I don't exactly hate my old boss, but he did cheat me in other ways that I have no way to prove. So, if under the black-and-white letter of the law, he owes me money in my 401(k), I'm inclined to press this issue. At the same time, however, if this were to seriously disrupt his own retirement plans or those of the remaining employees, I don't know that I'd go that route over just a few thousand dollars.

I have a DB offset plan that is getting ready to terminate. It looks like there will be excess assets. I would like to do an amendment upon termination to allocate the excess assets. I know that the amendment must pass 401(a)(4) by itself. My question is on 415 limits. Say, for the owner, I take the DB accrued benefit prior to offset, subtract the offset amount, and arrive at $15,250 per month payable at age 62. Can I structure my amendment to provide $1,000 additional accrued benefit to total $16,250 per month at age 62? Or does my DB accrued benefit prior to offset and prior to amendment need to be limited to $16,250?

If a DB plan, long frozen, "ends" after the last participant dies, can the remaining assets revert to the employer? Would the excise tax apply in that case? And would the reversion be subject to corporate income tax as well? Thanks.

A client wants to require their two employees to make pre-tax contributions for medical benefits. They don't want to give them a cash or deferral election, but they would have to take the payroll deduction. I don't believe this would count as a cafeteria plan because they couldn't take the cash, but can they require the pre-tax contribution from the employees?

Thanks

Company just realized that it overpaid an employee a signficant amount over a year ago. Company is now seeking to recoup the overpayment. Elective deferrals were made on the overpayment (and matching contributions on those elective deferrals). If the company simply reduces the employee's base rate of pay to recoup the overpayment, will this issue simply correct itself (i.e., less compensation on which to make deferrals)? Any other thoughts on how to correct?

Thanks.

I have a top heavy psp 401k plan with an ee who has waived participation. The plan has 2 owners and 3 nhces. 1 of the nhces has waived. The plan fails the 70% test but passes the avg benefit test. Does the ee who has waived get a top heavy contribution?

Thanks.

Is there any requirement that top heavy testing be done annually? For a plan that has close to 100 participants, if the ratio was considerably less than 60% last year, can that be relied on for this year? For three years? If so, is there a citation in the regs you can give me. Thanks.

Does anyone know if Prevailing Wage Contributions can be used to satisfy top heavy minimums?

Our firm is seeking the name(s) and contact information for a potential expert to review the Central States withdrawal calculations and the reasonableness of the underlying actuarial assumptions. Does anyone have any recommendations?

I spent nearly an hour searching here and the ERISA Outline Book.

Can anyone point me to the regs that discuss that a participant can cease their elective deferrals at any time during the year and doesn't need to wait until the election change period specified in the Document? I am specifically looking for something that says whether the employer must cease them immediately (next payroll), within 30 days, or as soon as administratively feasible.

Thanks.

I need help with a vesting determination.

We have been asked to help determine vesting for an employee who worked for Company A for 4 years and 3 months and quit. At the time, he was not vested. 3 years and 9 months later, this employee joined firm B.

1 year and 8 months after this, firm A and firm B merged.

The employee is claiming that both the vesting service and benefit from the original company time with Company A must be restored.

Does anyone have any experience with this or know where I can find information relating to guidance?

Thank you.

PPA provides methods for cash balance plans to comply with the age discrimination rules.

It indicates that for two similarly situated participants, the plan will not violate the ADEA rules if the older person has an accrued benefit at least as great as the yonger participant.

Say both earn 50,000 and the credit is 5% of pay. Therefore, each participant would receive a credit of 2,500 for the year.

Say the int credit rate is 4% per year.

One participant is age 30 and the other is age 50.

If the accd ben is defined as the benefit payable at NRA of 62 where the benefit is determined based on increasing the account to age 62 and then converting to an annuity, clearly the younger participant would have a larger accd ben and the ADEA so it seems would be violated.

However, if the AB is defined to be the hypothetical account balance then both would have an AB of 2,500 in this case. And of course that appears to be in compliance with ADEA and is fine. For this example, it is the first year of the plan.

Does this mean that cash balance plans need to be designed where the AB is equal to account bal or am I missing something?

thanks.

I presume that even if AB is account bal for funding it would have to be projected to ARA and then discounted using segment rates to determine FT and TNC.

For a young HCE, the NAR for $1 Profit Sharing Allocation came out to be way higher than the NAR for $1 of Cash Balance Contribution Credit.

That doesn't seem reasonable, but appears to be "correct" - the PS allocation is projected at 8.5%, and the CB contribution credit is projected at a much lower rate.

Do I appear to be "on track" with my understanding of the calculations?

Annual investment disclosures, it would appear, need to be made to eligbile employees who have chosen not to contribute, and tehrefore have no money in the plan. I'm referring to the disclosuries regarding the performance, benchmarks, annual expenses, etc. This is all information that (for example) John Hancock is best to prepare (and I'm sure they will). I'm just hoping I am misreading this requirement, and that it is not necessary to coordinate a separate annual amiling for the eligibles not deferring.

I am a financial planner in Texas and I was hoping for some direction on 401(k) plans if possible. I have a client who is a U.S. citizen who is planning on moving to Switzerland within the next couple months. My question is once he moves abroad what happens to his 401(k) plan that is held in the U.S.?

1. Assuming he leaves his current job here in the U.S. and joins a Swiss based company. Can he simply roll the funds into an IRA rollover? What if He maintains his current job with his U.S. based firm but lives in Switzerland?

2. Are there any immediate tax issues to be concerned with if he is no longer employed in the U.S.? The client is in his early 30's and has no plans or need to withdraw the funds.

3. The assumption is that the client will maintain his U.S. citizenship.

4. Does anyone know of any resources regarding Swiss employee benefits and retirement plans?

I realize my query might be a bit unorthodox but if anyone can provide any insight or resources to me that would be extremely helpful.

Thanks.

A plan freezes accruals and one participant's accrued benefit was being capped at the time to 30% of the 415 high-3 limit based on 3 YOS. A year later the participant has 4 YOS - would his frozen AB increase to the lesser of 40% of the 415 limit or what his AB would've been at the time the benefits were frozen without a cap? In other words, is the frozen AB literally written in stone even though the participant's 415 limit continues to grow? Is the answer different if he was being capped by the 415 $ limit instead?

When I get detailed information, this will be checked with an ERISA attorney if there is any doubt.

Doctor group one - it is a P.C., specialized area.

Doctor owned sub-s corp. 100% owned by an employee, non-owner of Doctor group one.

THe sub-s corp provides training for home care of clients of Doctor group one, home care supplies and an on-call registered nurse who also makes home visits. CLients of sub-s must visit the office at least once a month, and practitioners of Doctor Group one are available for consultation.

Doctor group one specifically advertisers the existence of the sub-s corp.

It appears to NOT be a FSO-A org because no owner of group one ones any of the Sub-s. It is an HCE of group one that owns the sub-S.

as for the B org - I am getting income numbers. However it appears that all of the activities of sub-s are for clients of group one, and of a nature traditionally provided by employees of group one.

THe provisions of the home supplies and the existence of other independent companies that do the same work as sub-s gives rise to a concern that this might not be a B org.

Any other items I should be gathering? Any exceptions to the ASG rules that might apply here?

Thanks in advance for your thoughts.