Retirement plan is pooled and assets are with Charles Schwab & Co. Included on the Schwab statement are some hedge funds which do not appear to be registered under Investment Company Act.

Are the hedge funds considered 'held' by a broker-dealer and therefore qualifying or no?

Thanks.

Calendar year plan, valuation date on January 1. The 2009 AFTAP was originally certified as 78% in September 2009 (2008 AFTAP had been above 90%, so deemed rate above 80%). Consideration is being given to revising the January 1, 2009 valuation now to use the October 2008 full yield curve (would eliminate need for any further 2009 contributions). Smallish plan with no benefit commencements since before the September 2009 AFTAP certification. The only benefit form possibly subject to Section 436 is a full cash refund form. The revised valuation for 2009 would change the 2009 AFTAP to just over 90%. A range certification for 2010 was issued at the end of March 2010 indicating that the 2010 AFTAP would be between 80% and 100%. Presume that suitable notices were distributed in 2009 after the September AFTAP certification (indicating that restrictions could apply to the full cash refund form) and after the March 2010 range certification (indicating that the restrictions no longer applied). The 2009 Schedule SB has not been prepared yet.

Is there any bar now to the sponsor electing to use the October 2008 full yield curve for the January 1, 2009 valuation? They would be doing so expecting to elect to go back to the normal three-tier segment rates as of January 1, 2010. No restrictions are believed to apply with respect to IRS consent, for either election.

Greetings:

I am thrilled to have found this board as I have been getting conflicting advice from my broker and a couple of attorneys.

MY company just realized, because of another issue that came up, that we should have had a POP plan in place. The reason this came up is that we were exploring whether we could waive the employee contribution for a particular employee and in doing the research found that there was no plan document to guide us.

So we are now trying to get this resolved and get the plan document set up. However, there is still the issue of whether we can waive the contribution for this employee. An attorney told me we could so long as the plan doc allowed for it and the person was not an HCE and the company who administers our FSA who is now going to set up the POP for us says we cannot.

We are a nonprofit with 14 employees.

Thanks for any guidance.

Any concerns we should be aware of about joining a MEP 401K plan? It purports to take away all fiduciary liability - I don't buy that. For example, if it is an imprudent decision to pick them as provider - we would have fiduciary duty regarding that choice.... Other than that - any other concerns regarding joining one? Issues with termination? Issues with other employers screwing up? Any thoughts?

thanks

Participant was a 31% partner in a law firm in 2009, and took out a retirement plan loan while employed. At the end of 2009 he left the firm and (as often happens) had the best of intentions to continue making payments on his outstanding loan in order to avoid a distributable event.

He made payments through January 2010, and then stopped. He was notified in May that his loan would be in default effective June 30 unless he brought his payments current. He made a few token loan payments, but did not even remotely correct, and his loan was in default effective June 30, 2010.

Because he was a partner in the firm at the time the loan was taken, and under lookback rules would be considered a 5% owner in 2010, would his default fall under the prohibited transaction rules, or, because he was a terminated employee at the time he went into default would this default be treated in the same manner any ordinary employee's loan default would be treated?

Two plans participate in a Master Trust. Each plan has a 5500 filing obligation, as does the Master Trust. For simplicity sake, let's assume ALL plan assets are invested in the Master Trust.

How should fees be reported? Are all the fees reflected on ONLY the master trust filing's Schedule H and Schedule C? This would mean that, for the individual plans, only beginning balance, ending balance and "Net investment gain/loss from the Master Trust". This net gain/loss would take into account all fees, so the 5500's (Sch H and Sch C) for the individual plans themselves would not reflect any fees. Actually, a Schedule C would not even be required to be filed for individual plans. Is this correct? Thanks for your help!!

I was just told by the investment advisor on a 401(k) plan, that our mutual client (without first consulting me), distributed $6,000 from their 401(k) plan to a plan participant in the form of a hardship distribtion. The plan only allows for hardship distributions in the amount of accumulated salary deferrals without earnings. Given this fact, the maximum allowable distribution should have been in the range of about $4,500. This excess distribution was made at the beginning of this month.

What are the implications of this excess distribution to the plan?

What are the implications to the participant?

What is the best way to correct this problem?

If a 401(k) Plan offers certificates of deposit as the sole investment in the plan and then the plan sponsor goes public and elects to establish a stock fund which allows participants to make a one-time election to purchase stock in the public offering -- is the plan a "participant directed plan"? I believe the question goes to the definition of the "exercise of control" - does the one time election rise to the level of "exercising control"?

Participant was a 31% partner in a law firm in 2009, and took out a retirement plan loan while employed. At the end of 2009 he left the firm and (as often happens) had the best of intentions to continue making payments on his outstanding loan in order to avoid a distributable event.

He made payments through January 2010, and then stopped. He was notified in May that his loan would be in default effective June 30 unless he brought his payments current. He made a few token loan payments, but did not even remotely correct, and his loan was in default effective June 30, 2010.

Because he was a partner in the firm at the time the loan was taken, and under lookback rules would be considered a 5% owner in 2010, would his default fall under the prohibited transaction rules, or, because he was a terminated employee at the time he went into default would this default be treated in the same manner any ordinary employee's loan default would be treated?

If you retroactively amend a plan to include employees who entered the plan to early which is permitted under the self correction program, do you need to file with the IRS if the plan is on a pre-approved prototype?

It seems as if you have already done self correction via the amendment, why submit to IRS?

Employer wishes to terminate their SH Match Plan. Would the 30 day notice requirement still apply? I can't see where the proposed regs or other guidance would eliminate the notice requirement. I can understand where the 30 day notice requirement would give participants time to change their deferral election if the plan were to continue as a non-SH, but this action would not apply in a plan termination. If there's relief, I can't see it.

We have an ESOP that has been in effect for over ten years. My question is - as a participant in our company ESOP , am I entited to see a list of all participants and the number of ESOP shares/stocks, etc that they each have ? Thanks for the help.

Would payroll deduction loan repayments cause a non ERISA voluntary 403(b) plan to become ERISA? I believe many non ERISA plans use repayment by check or "home" billing method, but does anyone have thoughts about payroll deduction?

Thanks!

Never had this come up. Not in my materials. I searched the board and found a similar, but unanswered question from back in 2007.

Medicare premiums; pre tax like insurance premiums?

Medicare co-payments; can claim under a health FSA?

Participant is dying of cancer and fills out application for DB pension. He selects the 100% QJSA option with an annuity start date three months out. He dies at age 64 (after earliest retirement age under the plan) but before the annuity start date. The surviving spouse believes she is entitled to the participant's selection, while the Plan says she is entitled to a 50% QPSA. IRS Reg. 1.401(a)-20, Q&A 18, seems to say that the surviving spouse is correct.

Here is the text of the relevant Q&A from the Treas. Reg.

"Q-18: What is a qualified pre-retirement survivor annuity in a defined benefit plan?

A-18: A QPSA is an immediate annuity for the life of the surviving spouse of a participant. Each payment under a QPSA under a defined benefit plan is not to be less than the payment that would have been made to the survivor under the QJSA payable under the plan if (a) in the case of a participant who dies after attaining the earliest retirement age under the plan, the participant had retired with a QJSA on the day before the participant's death, and (b) in the case of a participant who dies on or before the participant's earliest retirement age under the plan, the participant had separated from service at the earlier of the actual time of separation or death, survived until the earliest retirement age, retired at that time with a QJSA, and died on the day thereafter. If the participant elects before the annuity starting date a form of joint and survivor annuity that satisfies the requirements for a QJSA and dies before the annuity starting date, the elected form is treated as the QJSA and the QPSA must be based on such form.

Is the surviving spouse correct, and do we potentially have a plan qualification problem here?

A plan sponsor of a 401K plan was late contributing the employee's deferrals basically on every payroll date in 2009. The first contributions for the year was not sent in until April 2009 and then around August contributions stopped all together. All the missed deferral contributions was caught up in May 2010. The lost earnings have been calculated and will be made this week.

My question is how to show this on the 5330. On Sch C of the 5330. Is the "date of transaction" the 7th day after each pay date since they were all sent late? If I have to list each date is attaching a copy of the VFCP Calculator printout acceptable since there is not enough room on the form?

Since the restoration of loss earnings will not be made until this week (7/2010) will I include that date any where on the 5330?

I guess I've been lucky and haven't had to file a 5330 before so it's new to me. I really appreciate any guidance on this. Thanks!

If pension plan participants elect direct deposit of benefit payments, TPA makes deposit but does not send any confirmation of deposit to participant. Participant can see the deposit was made by checking bank account statement. TPA sends 1099-Rs at end of year, but that is the only document that a participant gets showing gross pension payments, tax withholdings, etc. Is this a problem?

Just trying to get a handle on this...

Some basic questions.

Do the assets need to be pooled? How are assets divided up for funding purposes? (are the pooled, but tracked separately?)

If an employee leaves one employer and goes to another, how is the shortfall liability made up?

Thanks,

Client does not include bonuses in allocation of safe harbor 3%. After running the 414(s) Test, the plan fails, i.e., it looks as if the defintion of compensation is discriminatory in 2009. How is this corrected? And to what level?

The plan document also limits the HCE group to the top 20%. Does this limitation have to be applied to the 414(s) test, just as it is used for adp/acp testing? Or can I chose not to limit the HCE group for this test?

Thanks for you guidance.

We are preparing a June 30, 2010 FASB valuation (we are the actuarial firm). We used a 6% discount rate for the 6/30/2009 FASB valuation. This seems quite high now looking at the FAS 87 moody rates published on this board. We need to discuss the discount rate with the client and the auditor but it seems that a rate around 5.5% is reasonable. Any thoughts?