Hello everyone

I have a client who would like to take a distribution from a DB account. he is in his 30s, but is fully vested in the plan. My initial reaction was that it was not permissible under any DB plan to take a distribution before the normal or early retirement date. However, someone recently told me they were cashed out of a DB plan a while ago. Anyone know if this is in fact an option?

A section in the plan says that a "A participant whose employment is terminated on account of resignation or discharge before meeting the eligibility requirements of Normal (or Early) Retirement will have his benefits deferred to his Normal (or Early) Retirement Date, subject to the provisions of 2.5.2, unless otherwise elected in Part II.G.3."

Under part II.G.3 of the Adoption Agreement, box "b" is checked, which states "Distributions may be made at the participant's election within a reasonable period following the participant's date of termination of employment."

So it seems that distributions can be made prior to reaching a specified retirement age???

By the way, the plan is a Bender, LLC Non-Standardized Defined Benefit Pension Plan Basic Document #2. I've heard some people on here talk about prototype plans. This is my first experience with them, so I wasn't sure if it would be helpful to point out the plan.

Hello

How does a partial plan termination impact a profit sharing allocation for that same plan that has a last day employement requirement? Are the participants eligible for the profit sharing due to the last day requirement being met due to termination?

Does anyone see a problem with having a match of 125 cents on the dollar counting deferrals up to 5% of pay?

If someone defers 5% they will receive a match of 6.25%.

If a plan is Safe Harbor and is doing a true up, can they eliminate terminated participants from the true up? Would they be allowed to implement the last day rule even if they are a true safe harbor?

Can someone very briefly summarize what are the '402(g) limits' in a 403b plan?

Say a one participant plan wants to defer $22,000 for 2010 (over age 50).

My understanding is that if his compensation is $22,000, he can defer 100% of his pay or $22,000 to the 401k plan in lieu of receiving his compensation in cash.

Does that make sense?

How would he pay his employee FICA taxes?

Or should the maximum deferral be 22k less FICA taxes in this case?

Or could he pay FICA taxes out of personal funds?

thanks

A one participant plan was underfunded at plan termination.

The plan was not covered by PBGC.

Plan assets were distributed to the extend funded as provided for per 411(d)(3).

IRS sends letter saying that they need a signed "election to forego benefits" statement as per PBGC 4041.21(b)(2).

My understanding is that a non PBGC plan can simply pay benefits out to the extent funded and the statement the IRS requests is not applicable.

Any views? Am I missing something?

Thanks

We are a law firm representing a plan sponsor. The engagement letter is with the plan sponsor. The firm sends a bill to the plan sponsor who reviews it and occassionally reimburses itself from the trust to the extent that a fiduciary determines some portion of the legal expenses are "reasonable adminstrative expenses". The plan sponsor wants to know why the law firm is not issuing a schedule C for indirect compensation. We don't want to issue a Schedule C because the firm is not a plan service provider. Is anyone one else dealing with this? thanks

Employer in construction industry participates in a multiemployer plan and has a large unfunded vested benefit of around 2 million. Employer also owns 3 other businesses related to construction (one is a realty company that leases property back to the union shop), but the employees who do not participate in the multiemployer plan. Employer is in the construction industry and wants to close down his union business and possibly all three. Owner has been offered opportunity to take a salaried position at one of his competitors. He wants to sell the property and other assets to his competitor (arms length unrelated), but does not want to trigger withdrawal liability.

If owner/employer shuts down his business and sells the building and equipment to an unrelated employer and ends up working for him, will this trigger a complete withdrawal resulting in withdrawal liability payments? The competitor is in the same state (maryland.

THANKS!

Participants owns home but wants to sell it to buy another. The new home will be her principal residence. Participant wants a hardship distribution for the down payment on the new home.

The plan only allows hardship distributions for safe harbor reasons.

Any reason this couldn't qualify?

I'm wondering if there is a way to have our EE's STD and LTD benefits non-taxable to them. We the employer pay the premiums. Can i report the employer paid premiums as imputed income for each EE in order that their benefits, when used, would be tax free?

Does this fall under ERISA?

Pls. advise!

Christy

A 401k plan was not restate yet for EGTRRA.

What would IRS do if submitted now?

Is it best to restate and not submit for DL?

FYI It is a pre approved Sungard Relius plan doc.

Any other suggestions?

Thanks.

Has anyone prepared the 2008 and/or 2009 Schedule B or SB filing for an Eligible Charity Plan? I understand they have the option of operating under pre-PPA or PPA rules for 2008 but must be on pre-PPA rules for 2009. Does anyone know of any guidance on filing the Schedule B or SB for either year considering the E-filings requirement for 2009? Thanks.

Will attempt a short story. State of California

Jan 09 Petitioner negotiates, prepares, and submits QDRO to court. QDRO excludes salary increases post separation for calculation of Petitioner's share of benefit

May 09 Plan (U.S. Office of Personnel Management) accepts QDRO, performs calculation and begins making payments

Jan 10 Petitioner declaration affirms post separation salary exclusion

Jun 10 During trial on other matters, expert witness testifies that former spouse was entitled to enhanced benefit under California law (time rule)

Jun 10 Judge rules that spouse did not negotiate away entitlement to enhanced benefit (which includes post-separation salary increases in calculating FAS) and rules that Petitioner is entitled to enhanced benefit

Aug 10 Petitioner prepares amend QDRO to modify original QDRO, with exclusion deleted. Judge is about to enter the order

Am prepared to appeal on grounds that Petitioner waived post-separation salary increases before and after original QDRO was entered and that QDRO was in place and in force for over a year without complaint or objection by Petitioner

Additional fact: Unlike many ERISA plans, federal employees are required to continuously contribute to the plan throughout their employment.

Questions:

1. Did the judge err in ruling that Petitioner is now entitled to enhanced benefit?

2. Was the negotiated QDRO and the declaration affirming the exclusion sufficient documentation of the Petitioners waiver?

3. Does their seem likely grounds for appeal based on the record as stated above in the summary

Collateral Questions

Is there any means to shift the jurisdiction to another state since I live on the East Coast and cannot find competent counsel in California from 3000 miles away?

Any recommendations for attorneys who can support an appeal in Alameda County, California?

Thanks for the comments.

Is a schedule C needed for TIAA-CREF plans? Do they have a Schedule C report?

I'm correcting a failed adp from calendar year 2008 using the one to one correction method. The 5330 I provided previously was never filed.

What's the requirement now for the 5330? I'm past the due date already so do I file one for 2009 and roll up the return amount plus interest or is there some other requirement to file the 2008 form late and an additional form for 2009?

In TIAA-CREF's Auditor FAQ's (which appears to be drafted before Advisory Opinion 2010-01A) TIAA says that some plan administrators are taking the position that terminated participants can be excluded from the participant counts. This is in addition to the DOL's transitional relief regarding contracts as of 1/1/09.

Are others using this exclusion? It doesn't sound like the subject matter of 2010-01A is directly on point with this, but when I noticed that properties of TIAA's pdf document indicated that it was last edited in January 2010, I thought I should make sure.

It's the last question on page 9 of the attached.

tiaa_cref_faq__s.pdf

A non ERISA plan wants to stay within the non ERISA safe harbor parameters of FAB 2007-2. If the plan has multiple vendors and wants to limit loans and hardships to a single vendor by amending the plan document/loan policy, does this constitute employer discretion regarding plan design and violate the FAB?

If so, could the TPA or consultant or vendor make the request to modify the plan in order to avoid employer discretion?

Thanks for your thoughts!

I had heard early on (from Relius pros, I believe) that it was expected that the DOL would extend the 10/15/10 deadline for 12/31/09 year end plans, at the last minute. I understand the DOL decided not to give a blanket extension for all plans with a 7/31/10 due date. But is it expected that there will be an extension on the 10/15/10 deadline? Any updates that I am not aware of?

Our DB Pension Plan has a PPT who will soon hit his early retirement date under the Plan and who currently has 5 QDROs properly entered by the court and qualified by the Plan over the course of the last several years. 3 of the 5 QDROs relate to the same Alternate Payee, which in this case is the PPT's child. All of these QDROs allow the AP to receive her benefit at any time after PPT's early retirement date under the Plan.

PPT calls Plan to request his early retirement benefit. When informed that his benefit is frozen due to the 5th and final QDRO (which is currently being processed), he claims that he never received ANY of the QDROs, nor did he receive the accompanying Determination Letters sent by the Plan qualifying the Orders. All QDROs and letters were sent to the most recent address the Plan has on file for him (which he claims is very outdated).

PPT claims that 3/5 QDROs referred to above "are wrong" and that he doesn't owe nearly that much in child support. We explain that the Orders met the requirements of ERISA, were duly qualified by the Plan and sent to his most recent address on file. We explain that AP can get money at any time after his early retirement date unless he sends us an amended court-entered order before that date (which is unlikely at this point).

Does anyone think that Plan can justifiably withhold payment to the AP for a certain period of time (say, 30 days) to give PPT an opportunity to get a revised court order? But then, what if he continues to request extensions? And what if AP demands payment? My first thought is that the Plan may be better off complying with court-orders that tell Plan that AP can get money at any time and leaving them to battle it out themselves. What are your thoughts? Thanks very much.