Due to some serious financial issues, we are looking into eliminating our 401(k) match. (Current match is 50% of the first 3%, on a per payroll basis.) We know we will have to do a plan amendment and new SPD to everyone. I am hoping this will be temporary and I am wondering if there is any way we could amend the plan so that it will be easier to turn the match back on without having to amend the plan again. I read some old posts about discretionary match and it seems to be that you have to elect what the match is each plan year, so that could be one option, but I am wondering if there are any other options for ways to achieve this.

Thank you.

Is it okay if the Employer's/Plan Sponsor's brother is the Broker of Record? Brother is not employed at the company.

A client inadvertantly discovered an old error that occured in testing the plan many years ago. All indications are that the error was non-determinative (in other words, the plan passed either way), but technically the testing data they have in the file is incorrect. Is there any affirmative obligation to actually perform testing each year (as opposed to an obligation just to pass testing) that might require that we go back and redo the test? I haven't found one, but just wanted to be sure...

I am going to use simple math. I am to receive $10,000 of my husband's $20,000 401(k) plan. He has worked at multiple companies, but the same fund manager - TIAA-CREF has all 10 of his accounts.

I am to receive my distribution "pro rata" from his 10 accounts. Does this mean I will get $1,000 from each account?

Or say for instance, one account (b/c he worked there the longest) has 40 % of his total account balance i.e. $8,000.

Will I receive 40% of my $10,000 from this main account i.e. $4000?

If it is the $1,000 from each of the 10 accounts, what happens if the one account doesn't even have $1,000 in it - how will the plan interpret that?

Let's say that a 50+ person has $22,000 of earned income. Defers all of it to a designated Roth account in a 401(k). Can he also contribute to his Roth IRA? It seems counterintuitive that he could, but perhaps it is ok? thanks!

Can someone point me to a description of how 412 charges and credis are handled for a short Plan Year? My quick skim of 412 leads me to "Amortized over 15 Plan Years in equal installments". For example, suppose we have a 6 month PY. Does this mean that we use a full year amortization charge in the short PY, and somehow amortize over a 14.5 year period? This seems to imply that we would know that there is a short PY coming. Thanks.

I have a DB plan that needs to file a Form 5500 EZ and Schedule SB for a short 2010 plan year (plan terminated and assets rollover to only participant in August, 2010 due 3/31/2011 unless extended). Since the 2010 Form 5500-EZ is not available I can use the 2009 Form 5500EZ and use the 2010 dates.

My question is with the Schedule SB. Should I use the 2010 Schedule SB since it is available? and use the 2009 Form 5500-EZ (with 2010 dates)?

or use the 2009 Schedule SB (with 2010 dates) to be consistent?

A participant works for her son and participates in his 401(k) SH plan. Is she required to take a RMD from her account?

Thanks!

An age 59-1/2 distribution was erroneously processed from a money pruchase plan. Request was made for participant to return distriubtion amount plus earnings, but participant refused. To make plan whole, employer would then have responsibility to restore funds to plan. Such monies would then be placed in forfeiture account to be applied as a credit towards future contributions. At first , it appeared that this would be a windfall for employer, but in making contributions to plan, employer would not be claiming deduction on the restored monies. For example, restored amount in forfeiture account equals $10,000, employer required to make contribution of $100,000, so employer submits net deductible contribution of $90,000. (Note plan's normal retirement age is 62, so classifying the withdrawals under the new NRA rules wouldn't apply)

Would this correction be appropriate in remedying the situation?

Hello All:

I am a non-US-Citizen currently living and working fulltime in my home country. I worked in the US from 2006 to December 2009. In December 2009, I converted the money accumulated in my 401K into a Traditional IRA. I then converted this traditional IRA into a ROTH IRA in April 2010.

In the whole of 2010, I lived outside of the US and earned no US income. I also was not the owner of any US-based asset (home or otherwise).

I have two questions:

(1)What, if any, is the % of tax I need to pay for the ROTH Conversion that I did in 2010? I had no other US income in 2010.

(2)I have some carry-forward loss on US stock positions that I held while I was in the US (between 2006 and 2009). All these positions were liquidated when I left the US in December 2009. Can this carry-forward loss by used to reduce my tax burden related to question (1)?

Thank you, in advance, for your time and response.

Participant is eligible for an in service distriubtion, and wants to offset his participant loan via an in-service distriubtion without actually taking the money out of the Plan. Can he just fill out an election form to that effcet? I know this is POSSIBLE, but does the document specifically need to allow this form of distribution?

Has anyone seen a new revenue ruling or IRS ruling that says breast pumps are ok for medical FSA without reservation? We had always approved them if the health of the mother warranted, i.e. breast abscess. We have a participant who says that the IRS reversed its position and now they are always approved, just because it is better for the baby.

Any input would be appreciated. Thanks.

A PBGC covered Plan that was frozen in 1993 is 75% funded and is going through the standard termination process. The Plan Sponsor has committed to fund the Plan to cover 100% of benefits liabilities. The Plan is filing for a D-Letter and will not make distributions, other than business-as-usual distributions, until the D-Letter is received. The Plan Sponsor will fund the Plan once the D-Letter is received.

A NHCE terminates employment. The Plan distributes a lump sum. An HCE terminates employment. Is the Plan required to respect the pre-termination restrictions of 401(a)(4) and not distribute the HCE's benefit in a lump sum unless the Plan sponsor would make the Plan 110% funded? Obviously, once the D-Letter is received, the Plan would become 100% funded and all distributions could be made.

Even though Prevailing Wage Contribution are Employer Contributions, it is my understanding that deposits should not be later than quarterly. I note that we always tell clients to deposit monies when credit is earned, and for the most part, this is what our clients do. There is of course always an exception, resulting in life being made interesting! Despite the fact that the Prevailing Wage Plan saves the Employer tons of money (payroll taxes, workers comp, etc...), this "exception" claims they can't afford to make the contributions, so they have yet to deposit credits earned in 2010!

My feeling is that lost interest should be computed and credited, and maybe, payment of the excise tax applicable to late deferrals. Any thoughts on this are greatly appreciated. Thanks!

Here is my problem. The house that I live in now will be taken by eminant domain. I don't know exactly when they are going to purchase my property. Probably 2 to 3 years. Through a death in my family my nephew's house is for sale and is Ideal for my new home . His estate wants to sell now. I have enough money in my IRA to purchase it through a self directed IRA LLC, which is legal. I know that I can't live in the new house as long as it is owned by the LLC. I can inprove it and also rent it out which I probably won't do. Now when the state buys my property say in 3 years. I need to know if I can legally purchase it back from the LLC without paying full income tax all at once. In other words I want to put all my money back to the IRA LLC. I was told this couldn't be done. Does anyone know if this can be done.

A plan sponsor decided to take it upon themselves to start withholding Roth contributions without notifying us, the TPA. We just found out while doing their year end administration. I know that we can still savage any 2011 Roth contributions as long as we amend to add Roth before 12/31/2011, but how do you correct the 2010 Roth contributions? Do they get forfeited? Returned to the participants? Match gets forfeited? How about earnings on the Roth contributions?

Is there anything in ERISA, Sec 125, PPACA, or anything else, that would prevent a plan sponsor from changing their contribution structure, and therefore the employee paid premium, in mid plan year?

A profit sharing plan amends its eligiblity from 21 & 1 to immediate eligibility effective 5/1/2010 for two NHCEs. This is done to improve the non discrimination testing so otherwise excludible employee testing does not apply.

They have 5 NHCEs in total as of 5/1/10 who are less than 21 & 1.

No HCEs fall in this category.

When doing the general test are all 5 NHCEs less than 21 & 1 required to be counted or just the two that are receiving an allocation?

Thanks.

A participant terminates from a DB at age 45. He receives a letter from the plan at age 54 stating that he can commence benefits at early (age 55) or normal retirement age (age 65). The letter further states that if he does not apply for benefits at age 65, but later than 65, no actuarial adjustments and no retroactive payments will be made for the period from age 65 to the date benefits actually commence. Isn't the position taken by the plan a cut back of accrued benefits?

OK PPA confusion reigns again.

PPA allows creation of PFB only to the extent discounted cash contributions exceed the minimum required before application of credit balance. For example, minimum before cb = 4,000, cb = 2,000, discounted contributions 4,500, then maximum PFB = 500.

Yet 2010 schedule SB instructions for line 38 now say to subtract CB adjusted minimum (if CB actually applied) from discounted contributions to come up with maximum PFB.

I didn't think it mattered whether or not you used CB for quarterlies or not in terms of the maximum PFB allowed to be created. The instructions seem to imply that you can now essentially get the PFB back if you later contribute in excess of the minimum reduced by PFB.

Anybody else see this?