401(k) Plan with no QJSA requirements provides for automatic cashouts for vested balances less than $1,000 and automatic IRA rollovers for vested balances between $1,000 - $5,000. A participant terminates back in 2009 and elects to do a rollover of his entire vested balance of $10,000. Later on the employer makes a profit sharing contribution to the participant’s account and he now has a vested balance in the plan of $1,500.

Question: Can we do an automatic IRA rollover of the $1,500 or do we have to take into account the prior distribution of $10,000 when determining if he is within the $1,000 - $5,000 range?

Thanks in advance for any comments.

Got a TIAA Traditional, TIAA Real Estate, both clearly on th group annuity contract side (403b1). What aobut the CREF side of it? Is that considered 403b7 becauise it is mutuial funds? Or is still under 403b1 b/c it is offerend through a group annuity contract? Of course, this results in different availability of in-service distriubtions dpeending on where you monry is invested, whcih seems ridiculous under one platform.

But is that the case?

Where are employEE elective ccounted for/deducted on a C Corps 1120? For example, if an employEE defers $10K of the $50K....where is it deducted on the 1120? Would it be counted in with the pension deductions on line 23 (in other words, lumped in with employer contributions from profit sharing, matching, etc) or would the gross amount ($50K) go on line 13.

I've been reading about the issues relating to terminating a non-ERISA 403(b) with individual custodial accounts (little or no ER involvement). The plan we're working with now has only a handful of current employees who are willing to liquidate their accounts and roll the assets over to IRAs. So far, so good. However, we were just told that there are a couple of former employees who left several years ago. Nobody knows what happened to their accounts. I'm afraid that I now have to tell the Director that the plan can't be terminated unless we can track down those former employees. Am I right about that?

Plan document allows for loans from only the salary deferral money source.

Can I use the entire account balance to determine the 50% vested balance and then check to see if there is enough salary deferral to matke the loan amount?; OR

Is the 50% vested balance limited to 50% balance of the salry deferral account?

The office is divided on this issue.

Thanks for your insight.

I'm paraphrasing here so no jokes if this is to simple or stupid of a question:

Financial advisor has an RIA agreement with the trustees and plan sponsor as the 401k plan advisor. He is now being told that due to this relationship, that he cannot use that foothold with the plan to approach the participants with an investment relationship outside the plan.

Agree/Disagree?

Thanks

Can a 2009 5500ez form be used to report for the 2010 plan year? The plan terminated early this year and would like to file now.

Thanks!!

We have a plan where a participant is requesting a hardship withdrawal for qualified medical expenses. The issue appears to be that the participant has already paid the outstanding bill. Is it possible to grant a hardship withdrawal for expenses that were previously paid? I would think not because the bill has been paid. If it were a hardship, then the participan would not have had the funds to pay the bill in the first place. Any thoughts would be greatly appreciated.

We are a plan in which the employer and employee contributes. We recently terminated our VEBA trust. Currently, we have opened a bank account in which we deposit both the employer and employee contributions. We pay the premium payments out of the bank account. We have an ASO agreement with our carrier in which funds needed to pay claims our automatically withdrawn out of this account, and we are reimbursed for anything above our stop-loss agreement. Since termination of the trust we have been having difficulty in determing what are plan assets for our financial statement presentation.

For example, if we have $1,000,000 in expenses which includes claims and premiums, and the employer contributed $700,000 and we withheld $400,000 from employee wages which were both deposited into the bank account we opened, my question simply speaking is:

If there was an assumed $100,000 left in this bank account, which represents a commingling of employer and employee contributions in this account, is this cash considered to be a plan asset of $100,000 when preparing our financial statements of the plan and when preparing our 5500?

401(k) Plan Sponsor is changing service provider. Few Participants who held a guaranteed fixed income fund are being assessed a "market value adjustment." Sponsor doesn't feel participants should be penalized for its decision and would like to make up the charge to the participants.

Would you count this fee reimbursement as a contribution to the plan?

Plan is a Sungard VS with standard 1 YOS requirement and dual entry. If not employed on dual entry dates, enter as of date of rehire if a 1-year break has not occurred.

Employee hired 5/19/08 and works 1,157 hours in 2008. Works 959 hours in 2009 and terminated 5/29/09. Since not employed on 7/1/09, employee never entered the plan, although they met entry requirements on 5/19/09. Employee was rehired on 6/1/10.

I would think they would enter on 6/1/10 since there was never a break-in-service. My administration software is not bringing them in on 6/1/10 or even on 7/1/10. Am I misinterpreting or do I need to override my system???

I represent a client that is receiving monthly payments under an Excess Retirement Plan and Supplemental Plan (both non-qualified arrangements). The client received a letter from his prior employer informing him that the benefits he is receiving are incorrect and that future monthly benefits will be reduced and that the client must return a substantial sum. In justifying this, the employer stated that this must be done in order to satisfy IRS requirements regarding payments from non-qualified deferred compensation plans and to avoid the employee being penalized under Section 409A. Would Section 409A require this corrective action? Thanks.

An employer has a typical health plan and also has a cafeteria plan with a healthcare FSA. There are more than 100 participants in the healthcare FSA.

From what I can tell, the employer has to file a separate 5500 for the health plan and the healthcare FSA. Presumably because they are both employee welfare plans.

If I go to Freeerisa and pull up many large companies, I don't see many filing a separate 5500 for an FSA.

Am I missing something? Is it combined in a wrap?

Sponsor wants to amend PSP to allow for self-directed accounts for participants who are 100% vested. Consultant has advised that once added such a right/feature would have to be tested for non-discrimination. Looks like Reg §1.401(a)(4)-4(b)(2)(ii)(B) would allow for the 100% vested requirement to be disregarded for non-discrimination testing purposes. So if that is the only condition, then looks like a non-issue. However, I guess there could be an issue depending on whether or not there is a minimum balance requirement as that does not appear to be something that can be disregarded under the §401(a)(4) Regs.....?

Plan sponsor has a DB and DC plan. The DC plan is not safe harbor and they routinely fail the ADP test, and correct by making a QNEC. Can the QNEC be used to satisfy part of the Gateway required for the DB/DC testing? For example, if the Gateway is 7.5% and the QNEC is 3%, does the QNEC of 3% plus another 4% profit sharing contribution satisfy the Gateway?

A sole prop has a safe harbor (3% non-elec) 401(k) Plan. He has a couple of employees that have been deferring and have received the appropriate SH contributions for the year so far (funded with each payroll). The plan is being terminated effective at the end of November. The plan year is the calendar year.

The question is... Will the owner have compensation for this plan year? Will he need to wait until the end of the calendar year when the accountant can prepare the Schedule C in order to determine if he had a profit for the year. Is that number then prorated for the portion of the year in which the plan was in operation in order to determine his SHNEC contribution amount? OR will he have no compensation since it is not determined until after the plan is terminated?

Are flat dollar allocations allowed for profit sharing plans, or are they only allowed in pension plans?

I can't seem to find much on this topic.

Thanks!

Clara Peller asked "Where's the beef?" A.T.A. asks, "Where's the fix?"

PPA purported to make pension plans safe for America, end all wars, and obliterate tooth decay.

A calendar year DB plan uses the preceding September segment rates, which for 1/1/2010 meant 5.03, 6.73, and 6.82. The liability held for A. Participant was $222,000. The Plan distributes lump sums based upon the segment rates as of the first day of the calendar quarter that precedes the calendar quarter of distribution. That's a mouthful but by example, the July 1, 2010 segment rates are used for a December 1, 2010 distribution. The July rates were 2.83, 4.66, and 5.26. Under these rates, a lump sum of $282,000 will be distributed, which is 27% greater than the amount reserved.

So what exactly has PPA fixed other than constructing an overly complicated basis for another undelivered political promise?

Can some explain the basics of the Utilization Standard test for C&B test of Cafeteria Plans (if the plan cannot utilize the Safe Harbor)? We are a TPA, and I don't know if I make this test more complicated that what it should be. I currently follow the guidelines laid out in the EBIA manual for Cafeteria Plans. Thanks!

I was curious to the thoughts of the members of this message board on placing a time limit on pursuing claims under a retirement plan document's claims procedures. For example, a limit requiring submission of a claim to the administrator within 24 months of the date the participant first became aware of facts supporting the claim or should have become aware of such facts through reasonable diligence. I thought I read somewhere that courts may become more supportive of such limits but can't find anything to support that.