An attorney for a ABC Company participant called on behalf of the account for a deceased ptp stating that the listed beneficiary is the mother of the ptp, and suffers from dementia; he also remarked that the brother of the ptp (son of the bene) has power of attorney. Please advise as to what the Recordkeeper/Trustee needs to have on file and/or do in order to be able to work with the ptp's brother/bene's POA so as to distribute assets in the most efficient manner possible.

The calculations for determining withdrawal liability (both partial and complete) tend to look at an ER's contributions over past 5 years or so. What happens if you have only been in plan for one or two years? How is the calculation done?

We change group life insurance carriers almost every year. Can I create a Company generic group life insurance beneficiary form (probably would mirror the one from our current carrier) and use it regardless of who the carrier is? If I mirror one from a major carrier, but just take off their logo, it should meet the requirements for our state and those we do business in plus include all the legal language.

Plan sponsor uses a well known payroll service. Most participants have deferral elections for a percentage of pay. In 2010, the employees are asked to pay a portion of their dental insurance premiums that had been previously paid by the employer. Payroll service adjusts all participants' deferral percentage to be based on the pay after deducting the insurance premium rather than the gross pay. This is not noticed until 2011.

We now have about 100 participants whose actual deferrals are less than the percentage on their elections by a relatively small amount. What is the fix?

I am 2 days away from a final hearing. The company my 401k is through has a qdro website that is straight forward. My settlement agreement states a valuation date of 10/1/2010 with an amount specified, plus or minus gains or losses. In addition, the settlement agreement states that all contributions after the valuation date are 100% mine.

When I filled out the form, it didnt state anywhere explicitly that they are excluding my contribution and the company match, post 10/1/2010. Is this standard procedure for a QDRO when a valuation date and amount are specified?

The actual form that my atty is turning in states this: The Alternate Payee's award is entitled to earnings (dividends, interest, gains and

losses) from the Valuation Date to the date that the award is segregated from the Participant's account. From and after the date of segregation, the Alternate Payee's award shall be held in an account under the Plan and shall be entitled to all earnings attributable to the investments therein.

Am I correct that they will seperate my contributions (and the company match) post 10/1/210 to segregation date and not distribute 50% of those to the alternate payee?

thanks for any help!

Code § 410(a)(1) sets forth the minimum age and service rules for qualified plans. This section provides that "[a] trust shall not constitute a qualified trust under section 401(a) if the plan of which it is a part requires, as a condition of participation in the plan, that an employee complete a period of service with the employer or employers maintaining the plan extending beyond the later of the following dates—(i) the date on which the employee attains the age of 21; or (ii) the date on which he completes 1 year of service." Code § 410(a)(1)(A)(i)-(ii).

Is anyone aware of any guidance on what "as a condition of participation in the plan" means in this context? For example, if a plan generally permitted employee participation after 1 year of service and attainment of age 21 (in accordance with the general 410(a)(1) requirements), but restricted employer matching contributions to employees who had completed 1 year of service and attained age 26, would the plan fail to satisfy these requirements? Or would Plan "participation" be viewed as general plan participation, not as participation with respect to each type of contribution permitted under the plan?

An owner of a small business has as employees, himself, his wife and an assistant. He also has about a dozen CBA employees.

The owner is also a union member.

The owner pays into the unions multi-employer plans for the union members, which includes himself. This includes both a union DB and DC Plan.

In the meantime, the owner establishes a 401(k) Plan for himself, wife and assistant, but excludes non-owner CBA employees.

Question #1: Can he achieve $49,000 (under age 50) in the company's plan? Or does the $49,000 limit include the contributions from both the company plan and the union DC plan.

Question #2: Does the union DB plan affect his $49,000 limit?

Thanks

I have a plan that for purposes of calculating the plan profit sharing contribution uses a definition of compensation that is:

W-2 + deferrals - fringe benefits ("reimbursements or other expense allowances, fringe benefits, moving expenses, deferred compensation and welfare benefits category")

This is an ASG with partners having their own S-Corp's and getting W-2 income. The partners pay from thier total after-tax income for their own medical insurance.

According to IRS Pub 15-B, health insurance is generally excluded from tax, except in the case of >2% S-Corp shareholders. So the insurance is taxed and included in Box 1 of W-2.

The question is do I have to subtract it as a "fringe benefit" when determining compensation for purposes of calculating the plan profit sharing contribution?

It may be a fringe benefit, but had they taken the same after-tax dollars and purchased health insurance elsewhere, they would get profit sharing contribution based on their full W-2 box 1 amount.

I have a client that needs this answer ASAP, and I have researched everywhere but cannot find anything definitive. Please help!

Participant has recently passed away and has an outstanding loan balance. The last payment was received on 01/28/2011, so the next payment is not due until 02/28 since they are on a monthly repayment frequency. The loan is still within the cure period (before the loan would be considered to be defaulted) the quarter following the quarter after the first missed repayment. If the distribution due to death form is not received by the beneficiary before the cure period ends, will we have to default the loan under the deceased participant's account, or should the loan remain in the deceased account until the distribution due to death is processed, no matter the date we receive the instructions from the beneficiary?

A terminated, now deceased, participant had an account balance of $3650.48. She was paid $2920.30, however the 20% with holding ($730.18) was never deposited and remains in the plan despite numerous letters telling them it needs to be paid. What's the penalty for failure to pay tax withholding timely? I think it increases as it goes unpaid.

My client would like to fully vest all employees employed as of June 30, 2011. They are acquiring another entity and want to apply the vesting schedule for all employees employed on and thereafter July 1, 2011.

Would this amendment require a 401(a)(4) BRF test?

I am of the opinion that as of the date of the amendment (June 30, 2011), this amendment is non-discriminatory in nature since it applies to ALL employees of the employer. There are more NHCEs which would be vested fully than HCEs. Further, with the 3-year vesting rule, the new employees would not have the right to choose to stay with the old vesting schedule and the employees who have accrued three years of service would of course elect to be 100% vested.

Am I missing something?

A plan sponsor is making a significant change to their business operations. Because of this, they want to change their plan's vesting schedule prospectively, to apply only to new hires starting on the frist day of their next plan year.

The current vesting schedule is 100% immediate. 10 participants (2 HCEs), 5 year old plan.

They want to change to 6-year graded. This would only affect new entrants. They are not planning to hire anyone that would become an HCE.

Under 1.401(a)(4)-1(b)(4), the timing of amendments must not have the effect of discriminating significantly in favor of HCEs.

My thought is that this change does not discriminate significantly in favor of the HCEs - agree / disagree?

Or is this fall into 1.401(a)(4)-1(b)(3) instead?

If a participant changes installment payments from 15yrs to 20 yrs 12 mos prior to the first initial payment date, do you still delay the payment for 5 yrs?

I have a proposal that I am currently working on with a triple stacked match. This will be a new plan and it appears that it will be top heavy the first year. If a triple stack match is used, do the safe harbor rules apply to the top heavy requirement or since additional employer contribution are being made, is the minimum top heavy contribution applicable?

Jodie

Client received a phone call from a DOL Investigator. Investigator indicated the 3 person profit sharing plan was being investigated in what she called a voluntary audit. Client chatted with Investigator for approx. 30 minutes and after giving her some additional contact information, hung up and gave us a call. A few days later, Investigator sent an email to Client with a standard list of items she wanted to look at: ERISA bond, copy of plan document, participant statements with SSNs removed, etc. etc.

We are not accustomed to receiving a request for this type of information via email. We called Investigator using the phone number given in the email and were told DOL was trying to modernize their methods of conducting an investigation. She said they no longer use paper if email will work. Has anyone else encountered this as standard practice now, or did we encounter a particularly modernized government Investigator?

Forgive the paranoia, but we like to see a formal DOL seal on the paper before we send off information to just anybody.

Plan is converting to different investment company, plan allows for in-service withdawals at 59 1/2 for all money sources. A participant does not want to change and just turned 60 and wants to roll out into IRA with current investment company before the conversion.

However, the Trustee does not want to sign paperwork to authorize the in-service withdrawal. Anyone run into this before and what to do (yes, I guess I can say call the DOL but want to try to avoid that) ?

Thanks!

A company's insurance policy has an "employee dishonesty" coverage. Do they still need an ERISA fidelity bond?

When calculating AFTAP for a plan that is At-Risk is the Funding Target based on At-Risk assumptions or Not-At-Risk assumptions?? Thanks.

I am essentially reviewing a combined DB/DC plan that I did not work on in prior years.

A couple of points to address.

The plan is a doctor and employees.

DB plan mostly for doc and his wife and PS plan for employees.

Issue #1

There are three employees who are children of the doc's spouse from prior marriage. They were not coded as key HCEs in prior years; however as I see it they should all be key HCEs. Am I missing something?

Issue #2

2 of the children from prior marriage and one child of both spouses each received compensation of under $200 in each of the past couple of years. They were included in the testing and by considering 2 of them NHCEs their high rates helped non discrim testing. Of course if they are now moved over to HCEs they would make testing more difficult.

It seems that individuals with such low pay should not be included in the non discrim testing; or at least when they were considered NHCEs.

Any thoughts on including such low paid EEs in testing?

Thanks.

I have a terminating DB plan with excess assets. The NRA as defined in the plan document is 65.

Two of the principals have an accrued benefit equal to the pro-rated 415 dollar limit. Each of them is less than age 62.

Since there is a provision in the code allowing for an unreduced 415 maximum benefit to be payable between the ages of 62 and 65, I'm trying to determine if it's permissible for these two gentlemen to receive a lump sum benefit based on the unreduced 415 dollar limit payable at age 62.

Or would this be no good since the plan states the NRA is 65.

Of course there would be a further reduction from 62 to their attained age but starting with an unreduced benefit at 62 instead of 65 will help eat into the excess.

Thanks!