Plan allows in-service distriubtions in the form of installments, following age 59 1/2. I know the timing of an in-service distriubtion is a protected benefit - is the installment form of payment protected? I don't think so, but thought I would check.

I was married for 21 years and that ended in divorce. I have a QDRO from that marriage which entitles me to half of my ex spouses retirement account.. PERS to be specific, we lived and Divorced in Nevada...

I am remarried and unfortunately looking like facing another divorce, this time I was married and live in Oklahoma... My current spouse is trying to tell me that he is entitled to half of my half of my QRDO from my previous decree. Is he correct? From what I read, he is not, nor can I even leave this monies to my own children, from what I can tell, if I die, then all my QDRO monies returns to its original owner, my ex spouse... and I can leave no beneficiaries.. My ex is not retired yet, and is not eligible to retire for 4 more years without penalty...

Thanks for any assistance in advance...

We've been handed an owner-only MP and PS plan. Both were effective in 2003. Nobody can find the plan documents back to then. Actually, nobody can find any documents period, amendments or otherwise.

Owner knows he has to go through VCP. Just wanted to see how to handle since we have no plan documents at all:

(1) Should we go back and draft a GUST document which would have been in effect in 2003, call that the original document, and let VCP know that this document provides the link back to the when the plan was effective? or

(2) Just draft the new EGTRRA document and call attention to all the amendments that were missed but are now included in this new document?

I cannot determine if filing a GUST document is necessary. If it existed, of course we would include it. But if as part of VCP we are going back to the plan's inception and acknowledging that there was no document even back then, do we need to go through the motions of adoption a GUST document at the same time as adopting the EGTRRA document?

Also, the fee is $750. But do you think this would be eligible for the non-amended discount of $375?

Finally, would you file both plans together or separately?

Thanks

A prospective client has 2 owners and about 5 NHCEs. We are looking at a SHNE/cross tested design. 1 NHCE is full time and the other 4 are part time. The part timers are very young. It would help testing to have the part timers in the plan since they are young and low wage earners. The idea is to set up the plan with immediate entry to get these folks into the plan for testing. The nature of the job function will create a situation where the part timers will never work 1000 hours in any plan year to vest in the profit sharing monies. Can this be considered abusive in any way to use these employees to pass testing, give them a SH and profit sharing knowing that they will never vest in the profit sharing to realize this benefit?

On a similar but more generic note, is it abusive to use short service employees to help pass testing if you are not excluding any other NHCEs from benefitting in the plan?

I should note I am referring to cross tested plans on a prototype document

Thanks in advance for any replies.

When you are running cross-testing and your plan document says you have to be employed on the last day of the plan year to get a Profit Sharing contribution, do you include participants who deferred during the year and got a Safe Harbor Match in all of the testing or can you exclude them on testing all together? My initial thought is that if they are not eligible for a Profit Sharing contribution, then they should not be on any of the testing since they are not benefiting for that source of money even though they deferred and got a Safe Harbor Match.

I have two questions:

1. For a 12/31/10 plan year end, the employer must deposit a discretionary match by the due date of the tax return (including extensions) in order to be deductible for 2010, correct? If made after due date of tax return, then it would be deductible in 2011? Are 415 limitations affected if made in 2011?

2. For a 6/30/09 plan year end, can a profit sharing contribution still be made? Are there any deductibility or limitations issues at this point? It was an oversight by the employer - is there a correction method through VCP?

Thanks for any help!

Can someone point me to the Code or Regulations where it would say that a Recordkeeper/Trustee is required to provide a participant with the special tax notice prior to processing a participants distribution. Thanks.

I deal with several big asset carriers who hold my clients' plans' money.

On some of their withdrawal forms for excess refunds (ADP, ACP, etc), there is only a Plan Administrator signature line. There is no Participant authorization needed.

For some reason I'm not comfortable with that. I know that it's up to the PA to get the money removed from the plan timely. However, the taxation withholding on the distributions are voluntary. On the forms there are the normal choices for default tax, no tax or other tax that the PA can choose.

Do you find it odd that the PA should be making those decisions? Or that the carriers would accept taxation decisions based on the PA's, rather than the particpant's, say-so?

I know as we get closer to the deadlines, not having to get the participant's consent is a luxury, but something just doesn't sit right with me when distributions are processed with, perhaps, arbitrary tax withholding decisions. (This is all assuming that the PA doesn't have explicit instructions in writing from the participant already. I mean, c'mon, who has that?)

What are your thoughts?

First year of a cash balance plan with 26 active participants using the plan's definition. However, only 23 participants actually received a hypothetical account allocation. Using the "benefit liabilities" definition of participant ala the PBGC premium filing the plan would qualify for the professional service organization exemption.

I know they wouldn't have a premium due in the first year regardless, but does anyone have experience with this type of situation? Would they be required to file?

I hope this is under the correct topic!

New cash balance plan on an individually designed document. The sponsor's EIN ends in a 3, so they would be in cycle C. Rev. Proc. 2007-44 provides for a new individually designed plan to file for a determination letter in the current cycle if their regular cycle ends at least two years after the end of the current cycle. This type of filing is given the same priority as on-cycle filers.

This Rev Proc also provides, "the initial remedial amendment period for a new plan is extended to the end of the applicable remedial amendment cycle in which the remedial amendment period would otherwise end."

With this in mind, I'm not sure I am seeing the advantage to the client for filing now, rather than waiting to file in their regular assigned cycle? If we did file now, they would have to file again (if they chose to) in the next regular cycle anyway, right?

We have acquired a new safe harbor match plan with a formula that I have not seen before. The formula calls for a safe harbor match of 200% on the first 2.5% of compensation that someone defers. My understanding is that if the safe harbor formula is at least as generous at each level of deferral that the basic safe harbor match formula would provide, the safe harbor requirement is met. My analysis is as follows:

Deferral %, Basic SH Match Formula, This plan's SH Match

1%, 1%, 2%

2%, 2%, 4%

3%, 3%, 5%

4%, 3.5%, 5%

5%, 4%, 5%

Since the plan's match is at least as generous as the basic SH formula, the plan's formula satisfies the safe harbor requirement.

Any thoughts? THX.

Can a Welfare Fund discriminate in the amount of contributons in requires an employer to make on behalf of its eligible employees to pay for benefits? The Fund covers, in addition to the employees covered by a CBA, employees of the union and an apprenticeship fund, and the union and apprenticeship fund contribute less per hour for the same benefits.

A company sponsors a profit sharing plan and a defined benefit plan.

The plans are a required aggregation group and the combined plans are top heavy thus making the PS plan TH and the DB plan TH.

Ordinarily under 416 if an employee participates in one of the TH plans he receives that plan's TH accrual/allocation and if he participates in both plans he receives the 5% PS plan allocation.

The question is:

If the plans are part of required aggregation group and an employee only participates in the PS plan should such employee receive:

3% since only in PS plan

or 5% since the two plans are aggregated for testing?

Thanks.

A 401k plan has 4 regular employees whose compensation is reported on a W-2, and one partner, who gets a K-1.

My question is what compensation do we use for the Partner when I am trying to do a New Comp PS calculation?

Does the partners K-1 income have to be adjusted for the self employment calculation?

Im having trouble running eligibility on a rehire: Participant was a rehire on 4/19/2010. Original Hire Date was 12/1/95..The Part was deleted from Relius in previous year because he had zero balance. The system is giving him a status date of 12/31/2007. The error message Im getting is Prior year set to ineligble, fails service requirement. If correct, rerun eligibility with estimated Prior entry or update manually. I tried to rerun and update manually but I keep on getting error messages.

Does anybody know how to correct problem? Eligibilty to defer is 3 months from hire in initial year.

My client wishes to submit his plan to the IRS for termination. He does not have the OBRA 93 Amendment for his Kemper Prototype plan. This would have been a sponsor (not employer) add on amendment from 1994.

I contacted Expert Plan (the end of a long line of successor providers) and the either cannot or will provide the amendment. The client does not want to pay for VCP in addition to the IRS now $2,000 fee for submission.

Does anyone have a copy of that amendment? It would not be plan/client specific, only document specific.

Most documents I've seen (or at least those where I've happened to look at this wording) provide something to the effect that the "employer" includes the sponsoring employer, any "associated employer" - e.g. member of a CG/ASG - and any participating employer. And all the eligibility, participation, required contributions, etc., automatically take into account the employees of any associated employer.

So, in a situation where the employer neglects to inform you that there's a CG, until AFTER the end of the year, and there's now a required contribution on behalf of the employees of the employer who has not, as yet, signed on as participating employer, is the cost deductible? And if so, is it deductible to the sponsoring employer, or the "associated employer" who has not yet signed on as a participating employer? If not deductible, is it subject to the penalty tax, and can it then be deducted once the associated employer actually signs on?

I suspect that in the real world, the associated employer kicks in the requisite amount and deducts it. I don't know if the IRS would disallow this on audit anyway, as it is arguabley "required?"

Just looking for thoughts or discussion, or any actual experiences you might have had with this or similar situations. Thanks!

Employer with union employees offered open enrollment period at end of 2010 for a new dental plan (calendar year plan). In 2011, a few employees stated that they never received the OE information and wanted to enroll or that they returned election forms but were not enrolled. Employer stated that employees could not enroll pre-tax because of the irrevocability rule but that it would allow these employees to enroll after tax (assume that the plan document permits after-tax elections) as an accommodation. The union states that is unacceptable and have filed a grievance.

Leaving aside that the employer is thinking about offering to gross-up the affected employees, in the event that an arbitrator determines (in a decision that is binding) that the employer must enroll these employees pre-tax notwithstanding the Code Section 125 rules, does anyone have any thoughts on whether these employees can enroll pre-tax mid-year under a "catch-all" exception to the irrevocability rule?

ADP/ACP tested plan. Allocations in the plan use full year pay, it does not exclude pay prior to entry.

Testing comp says to use any definition that satisfied 414(s) and it's regulations.

Does 414(s) allow exclusion of pay prior to date of entry (could we test using comp excluding pay before the entry date)?

When testing a 401(k) plan using compensation less deferrals as the testing comp, in some instances this causes the participant's deferral % to exceed 100%.

Can anyone help with a cite so I can direct the employer's accountant to verify this is ok?