ABC Company has an employee in bankruptcy who is considering a hardship withdrawal.

His attorney told him his distribution would be exempt from any action taken by the Court as the funds are not considered wages. In other words, would he be required to disclose to the Bankruptcy Court his intent to take a hardship withdrawal? Would the Bankruptcy Court have a "claim or levy" on any funds disbursed from his retirement account?

A 6 person plan has filed for a standard termination with the PBGC. The owner is going to waive benefits to the extent necessary. The owner does not want to wait 60 days before distributing benefits, but would like to do so immediately.

While the PBGC Form 500 Schedule EA-S requires a proposed distribution date not earlier than the 61st day after filing the Form 500, is there any restriction on the earliest date that benefits can actually be distributed?

Let's assume a deferral-only plan satisfies all of the requirements to be considered exempt from ERISA.

If they decide to allow participant loans for specific purposes, such as medical reasons, can they still be a non-ERISA plan?

If so, what should they be careful to do (or not to do) so they are not considered to be "maintaining a plan"?

Our document does not allow deferrals to be made on severance pay, per the 415 amendment. When we do the testing, do we include the severance pay in ADP testing, in calculation of a 3% NEC, in calculation of a match, etc., etc or do we exclude the severance pay from all the calculations?

It seems clear that until it is possible to establish standing elections to apply COB / PFB to cover required quarterly contributions, it will be necessary to deal with the rules as described in the 430/436 final regulations for handling elections made after the respective due dates for the quarterly contributions. This raises (at least in my mind) a number of questions:

1. At what point must one reflect the methodology in the regulations (i.e., apply an amount towards the minimum required contribution based on the quarterly amount due, discounted back from the election date to the quarterly due date at effective interest rate + 5% and from there to the Valuation Date at the effective interest rate, but reduce the remaining COB / PFB balance by the quarterly amount discounted from the date of election back to the Valuation Date at the effective interest rate as is)? Certainly with respect to elections for plan years beginning in 2010 or later, but what about the 2008 and 2009 plan years? The instructions to the 2009 Schedule SB appear to imply that the 2008 results should be recalculated as though the final regulations were effective for that year's determinations. The regulations were promulgated on or about the contribution deadline for calendar year 2008 plans, and were lengthy and complex enough to render it essentially impossible to call upon plan sponsors to adjust their contributions for the 2008 plan year to take into account the impact of the regulations. If the special discounting is required for 2008 plan years, some sponsors who paid the amounts their enrolled actuaries told them would discount back to the amount needed to cover the remaining minimum required contribution could find themselves with unmet minimum amounts for that year.

2. If there were some cash contributions made between a quarterly due date and the date that an election was made to apply more than enough COB / PFB to cover all of the quarterly amounts (such as the amount needed to cover the entire minimum required contribution), do you use the cash contributions (with the +5% interest rate used to discount them back to the quarterly due date) or the COB / PFB as elected?

3. If one intends to cover the entire minimum required contribution with COB / PFB, is the net result of making an election after one or more quarterly due dates that the COB / PFB is reduced by more than the entire minimum required contribution?

Does anyone know if the IRS recently has issued any comments/pronouncements regarding its willingness to accept scrivener's errors?

I know that the general topic of what to do about scrivener's errors is being discussed within the Service, but I don't know whether or not anything has been issued yet.

My apologies if this has been addresed previously.

Have a client with a DC plan under which the business owner is currently the only eligible participant. The business has a couple of other "employees", but they never receive enough credited Hours of Service (intentionally) to become eligible to participate.

Wondering if this plan is eligible to file an IRS Form 5500-EZ vs. -SF. The business owner is obviously the only one "benefitting" under the plan, but I'm not sure if she would also be considered the only one "covered".

Thoughts?

We have a Safe Harbor 401k plan with a 3% NonElective employer contribution. This is for a non-profit and we file a 990. If the 990 for 2009 is due October 15, 2010, is the employer's 3% 401k contribution for the 2009 plan year also due October 15, 2010? In other words, is the due date the tax filing deadline plus extensions, if any? Thank you.

p. 9 of the recently issued Interim Final Rules for Group Health Plans and Health Insurance Coverage Relating to Status as a Grandfathered Health Plan under the PPACA provides that HHS does not intend to enforce the requirements of HIPAA or the Affordable Care Act with respect to nonfederal governmental retiree-only plans. Also, the regulations provide that HHS is encouraging states not to apply the provisions of title XXVII of the PHS Act to issuers of retiree-only plans.

1. Can anyone confirm that this language applies to retiree-only plans created both before and after the enactment date (ie, it applies to plans that would be grandfathered and those that would not be grandfathered)?

2. Can anyone point me to a useful secondary source outlining any requirements under the healthcare reform act that still apply to retiree-only plans?

Many thanks!

I'm new to the Taft-Hartley plan world, so any help would be appreciated!

Can a welfare fund accept employer contributions for both welfare and profit sharing benefits for "away" employees and then reciprocate the money back to the "home" locals for allocation between that local's welfare and profit sharing funds? For example, assume under the "away" contract that an employer must contribute $2 for profit sharing and $1 for welfare benefits. Can the welfare fund alone hold the $3 and then cut a check to the home local for $3 and have them allocate the money to their welfare and profit sharing plans?

Has anyone heard of this? I think it is a lump sum option under the state's DB plan, however not sure if it requires a lump sum service credit transfer from the 403b plan to the state DB plan in order to pay out this partial lump sum?

Thanks

I have a cross tested plan with 5 groups. The profit sharing contribution is allocated on 414s comp, which is compensation paid for hours worked. It does not included bonus, overtime, vacation or sick pay. The gateway test has to pass the 5% test and I am using 415 compensation. One of the groups receives 5% of their 414s compensation. This group is failing gateway.

To correct the test, can I give each employee the addtional amount needed to get them to 5% of 415 comp? Which would mean each employee would receive a different percentage, it would not be pro-rata?

and in this group there are highly compensated employees. Since they are HCEs, do they have to receive an additional amount to get to 5% of 415 comp? I'm thinking no, since they are hces. But since they are part of a group, I wasn't sure if I had to treat everyone in the group the same.

thanks for your help.

We have a multiple employer plan (8 employers) converting to our recordkeeping services. Each employer has different provisions for their specific plan so for administrative ease we are suggesting they spin-off from that plan and set up 8 separate plans on our system. Per my research, this seems to be allowed and will not be considered a successor plan. However, the multiple employer plan will no longer exist and in effect will terminate so I have this nagging question on whether or not all of the adopting employers of the multiple employer plan will indeed be able to spin-off without forming successor plans. The plan sponsor of the multiple employer plan is not going out of business.

In addition, the plan sponsor of the multiple employer plan will be instituting a "start-up" plan with us for any new employers that decide to join the plan. Going forward the employers will need to stick to the provisions of the multiple employer plan we are drafting or will need to adopt a separate plan, again for administrative ease. Because it is only for new employers and will not affect anyone that was already in the plan I think this would be OK as well.

Any thoughts?

If I used segment rates for the 2008 valuation and the yield curve for the 2009, is that a change in my assumptions or my method?

I am thinking that if I change the lookback month for the segment rates that could be an assumption change, but for some reason I'm thinking that a change to/from segment rates from/to yield curve is a method change.

Is there anything "official" on this?

I have been trying to pin down a firm answer as to the bonding requirements for 403(b) plans. What I have gathered is that 403(b) plans that are solely voluntary elective deferrals are not subjct to the ERISA bond requirements. However, I can't find confirmation that 403(b) plans with employer contributions (either match or nonelective) need to acquire a bond (I am not referring to church or governmental plans).

Does anyone have any clarification? Any help would be appreciated

Thanks

HCE who is not an owner or family member of an owner.

Is the spouse or dependent of such an HCE also an HCE?

Thank you.

We have a DB plan where the asset is an annuity. The plan in terminating and they just want to reregister the annuity into the participants name. The insurance company says this is not a taxable event. I would think that it is - because it is changing ownership from the Plan name to the participants name. It is NOT going to an IRA. This doesnt qualify for a 1035 exchange - correct?

Thanks

Is this the GENERAL procedure for calculating withdrawal liability: (1) withdrawal liabiilty determined under a method provided in ERISA Section 4211 (this is the actual W/L amount); (2) That amount is amortized over a number of years in accordance with ERISA Section 4219.

It seems to me that an employer wanting to pay W/L in a lump sum payment would pay the amount that is determined under Section 4211. There would not be any type of discount for paying in a lump sum payment. Is this correct? Please let me know if you know of any cases/PBGC opininons, etc., that discuss lump sum withdrawal liabiilty payments. Thanks.

Hello to all-

Is the service provider allowed to register and obtain a plan sponsor/administrator's filing signer credentials and then prepare, sign and submit the form 5500-SF using those credentials on behalf of the plan sponsor/administrator? My firm has instructed the plan managers to do this following the recent additional e-signature option. We would be using the plan sponsor/administrator's name & email address. Everything I've read indicates this is strictly prohibited.

Thanks!

My client called with the following question this morning: A distribution due to death was processed from a deceased participant account to his primary beneficiary. Prior to taking any action on the account the primary beneficiary also passed away. The client doesn't have any beneficiary designation on file for the primary bene. Would the money go to the spouse of the deceased beneficiary or would the money be transferred to the secondary beneficiary of the deceased participant?