Has anyone a handle (or website) whereby we can estimate the underlying interest rates used to determine individual annuity premiums? Also, to what extent are theoretical rates loaded for expenses, commissions, premium taxes, etc.

What I'm attempting to do is to ball park what annuities might cost in a plan termination. Is the lump sum rate a reasonable proxy?

Once a plan termination date has been set and the plan has been filed with the IRS for a determination letter, is there a requirement that all assets remain in the plan until the IRS issues the D letter? What is the suggested course of action, esp given that it could be 6+ months until the letter is issued, and participants have no access to their accounts.

What are sponsors generally doing these days?

Thanks for any feedback!

A plan sponsor wants to write the plan to exclude employees that continue to work part-time less than 20 hours per week after retirement. Is this a potential age discrimination violation?

They also want to exclude a class of employees who are hired for a contracted defined period of time of less than 1 year. Problems with that?

Were the EPCRS VCP fees increased when the other IRS filing fees wre increased? I don't see it in the bulletin, but have a niggling suspicion ...

Our 401(k) has always been defined as a large plan (a plan with over 100 participants at the beginning of the plan year; those participants being comprised of active employees whether participating in the plan or eligible but electing not to do so, retired or separated particpants with an account balance, and deceased participants with beneficiaries).

There have been no employer contributions for the past couple of years, only employee deferrals. We terminated our plan effective 12/01/2009, so there were no employee deferrals beyond that date. The plan continued to have asset balances into 2010, while participants submitted their paperwork for rollovers, etc. We did have an audit for 2009 (01/01/2009-11/30/2009).

QUESTION: Are we required to have an audit for 2010? The plan ceased to exist in 2009, so technically there were no eligible participants. Our TPA says yes to the audit; our auditors say no. With funds tight, not having to pay $10k for an audit would be beneficial. Would cover some payroll!

a dormant non-ERISA plan has been filing 5500's for years. The plan now has one terminated participant, no employer funds, with less than 100,000 in assets. Should the plan continue to file for the 2009 plan year and future plan years until a resolution to terminate has been created and the annuity has been assigned or can it just discontinue filing with 2008 being the last year it filed? One quirk: The plan filed an extension for the 2009 plan year.

a dormant non-ERISA plan has been filing 5500's for years. The plan now has one terminated participant, no employer funds, with less than 100,000 in assets. Should the plan continue to file for the 2009 plan year and future plan years until it a resolution to terminate has been created and the annuity has been assigned?

If an employee becomes eligible midyear (1st day of 7th month) in a top heavy safe harbor 401k plan, does a 3% Non elective safe harbor contribution based only on compensation while eligible, satisfy the top heavy requirement for that participant for the year.

Employee becomes eligible to participate in an account balance Deferred Comp Plan mid way through 2010. Never was eligible to participate previously.

Elects to defer 10% of salary (so a deferral every two weeks).

Due to admin error, the deferral is not implemented. This is just discovered. A total of $10K would have been deferred.

Would you correct under these circumstances? Will be painful to calculate interest. Or, gross-up employee for 409A tax and premimum interest?

Also, if you correct under 2008-113, is that good with California?

I bet we pay a lot of $$ and expend a lot of effort to follow 2008-113. However, if we report a violation and the 409A tax is paid, is that an invitation to a 409A audit?

Thanks!

Does anyone have an Excel spreadsheet formula for the excess life calculation?

I'm trying to run a proposal for a plan.

They are Farmers and the owners are 77 years old - want to retire at 85 comp is $250,000 and they are a partnership

Can you do a 412(e)3 plan and what about the RMD's required in a fully insurance funded plan? What about PS-58 costs?

Is it worth it? What a about a tradtional DB plan - the RMD's are calculated differently and they can be high also.

Thanks

OK, why can't you do this? A young business owner makes max comp $245,00, deferred the max, $16,500, has 10 employees, who deferred between 5% and 12% of pay, and the plan used the Safe Harbor match($1 per $1 to 3% and 50 cents per $1 to 5% of pay). So, if the plan allows an end of year discretionary match, why doesn't the employer decide to match deferrals greater than 5% of pay up to 7% of pay (since the SHM matched up to 5% of pay) with a $5.24 per dollar match. That way the business owner gets $49,000 total ($16,500 def, $9,800 shm and $22,700 non-vested match). The cost to the employer is that 2 employees contributed more than 5% of pay and wind up getting $8,786 total.

Can a plan state the the MINIMUM loan that can be taken is $2,500? $5,000? I know it's usually $1,000.

One of our clients decided to terminate his profit sharing plan because there was a former participant/employee who stole quite a bit of money from them. The client's attorney suggested they terminate the plan as soon as possible. The account was liquidated and all people rolled over except for one.

The participant involved had an account balance well over $5,000 and is not married. The client's attorney advised them to pay everyone out by 12/31/10.

The participant involved has refused any and all mail from the client, and the client sends everything certified, return receipt.

The client still has the check representing the 80% and has not forwarded the 20% withholding yet.

Any suggestions on how to handle the check the participant will not accept??

I just met with a prospect yesterday and they bought a company that has a plan with Prevailing Wage Contributions under the Service Contract Act. The parent company sponsors a 401k safe harbor plan. Two vendors before me told them they had to sponsor a single plan.

Is anyone aware that as long as the plan passes coverage testing, the SCA plan can remain separate from the Parent plan? That would not make any sense, but in this business, does anything make sense.

I understand that if even one account remains open, the plan is not considered terminated. So they are scrambling now to get the missing 5500s prepared and get the small account rolled to an IRA (the participant couldn't be found). It seems to me that we need to restate the document since it hasn't been updated since GUST, which means a VCP filing because we're beyond the EGTRRA restatement date. Clearly this is going to involve time and expense that goes way beyond the small dollar amount that was left behind. I guess it is what it is, but I just thought I'd ask if any of my peers might handle this differently.

A plan using prior year testing failed the 2009 ADP and did not distribute excess contributions in 2010.

What is the correction for 2009 and will it impact the 2010 results?

It would make sense that the spouse could get her 36 months of COBRA under the participant's Employer Retiree Medicare Supplemental Plan, even though the participant does not now have COBRA rights. But is there any direct authority for this proposition? Thank you for the feedback -- in advance.

Most of the providers in this category solely provide retirement/investment advice only and don't provide advice for all other financial concerns of participants such as spending plans, debt management, educational savings planning, insurance planning, and any other goals-based planning important to them.

That said, would anyone think that if such a solution truly covered all these topics and serviced participant questions with Certified Financial Planners, rather than TPAs taking these calls, that participant utilization of the service would skyrocket over the dismal industry average of just 2% - 2.5% annually?

Moreover, since all financial topics could be covered by this service, wouldn't it stand to reason that this service would significantly contribute to the financial wellness of the participant, consequently reducing the corporate time participants spend on their own financial problems, thereby improving the sponsor's bottom line with increased efficiency?

We are interested in your opinions as this is what we do and are passionate about. Thank you in advance for your interest and taking the time to respond.

I have a plan where the HCE is deferring .46% and the NHCE's are not deferring. Wouldn't this test pass since it's under the 2% threshold?