An ERISA 403(b) plan provides that the employer, at its discretion, may make a nonelective contribution equal to a percentage of compensation, determined by the employer, for the payroll period, not to exceed $2,000. This nonelective contribution is subject to a 100% immediate vesting schedule. For 2009, one participant received total employer contributions of $3,257.

Should the excess amount of $3,257 and associated earnings be taken out of the participant's account and used as a credit towards future contributions? If there is a loss associated with the excess amount, would the employer be responsible for making whole the amount?

A VEBA has a Health Reimbursement Arrangment within it and is looking to transfer the assets of that HRA into an HRA maintained by a 501©(5) (labor organization) entity. The assets will be used for the same purpose but I can't find any IRS PLR's on point addressing any issues raised. Any thoughts?

A plan sponsor wishes to resume accruals after being frozen prior to PPA. What is the required funding percentage? 80% or 60%

457(f) plan had phyisicans who did not want to participate in plan sign a waiver. The waiver does not state that it is irrevocable, but does state that it can be revoked at any time within 14 days after execution. The plan sponsor has changed benefit provisions of the plan to make it more attractive. The physicians that signed the waiver of participation now want to participate. Given the way the waiver is drafted I think the client is comfortable with allowing these physicians to revoke their waiver. My thought is to treat it more like an election not to defer. My issue is when can these physicians join the plan? I interpret the 409A regs to require an election to defer prior to the first day of the year in which the compensation is to be earned. Therefore, these physicians cannot make a deferral election for compensation to be earned in 2010 and must wait until 2011 to participate. Any thoughts?

In a new comparability allocation, can you provide an allocation of 0% to one group if the plan does not have HCEs? I'm drawing a blank as to why it would not work.

We're using the 5500 Code 2T for default investments, along with codes 2F and 2G. Relius keeps kicking out a validation error on this saying invalid entry. Are other people using code 2T in this way?

I have a medical group that has one receptionist that is a leased employee. The leasing company says that it does not have the ability to do pre-tax withholdings for the employees that it leases.

The leasing company does have a 401k plan for employees that physically work for the leasing company (like in its corporate office, for example), but the employees that it leases to other organizations are not covered under this plan.

I've never dealt with this before. Does anyone have any suggestions for dealing with this if the receptionist wants to defer into the medical practice's plan?

Assuming that your health/welfare plan SPDs are ERISA compliant, is a Plan Document required?

Thanks.

We need to do a money purchase plan document, although we do not sponsor a MP prototype. What do other people do? Are there services out there that will allow you to utilize a Corbel prototype that some business has adopted, and will just charge per document.

For example, it was not cost effective for us to adopt our own MP prototype, nor a Volumen Submitter "check the box" document, since we only have a handul of plans that need those.

And I don't want to use those really nasty IDP documents because they're so hard to work with...

I heard at the 2009 ASPPA conference that a QACA (to take advantage of the slightly lower match and longer 2 year vesting schedule) must calculate the match based on all compensation, thus the plan must have true-up language in it if the match is funded each pay period. Reviewing the outline it says, "The QACA requires that you use all compensation while eligible. So this may require a true-up conribution if deferrals do not begin on eligibility date." Listening to the CD, the speaker says that this means that QACA's must have true-up provisions in them.

For those of you that have tackled QACA's, is this what you're doing and is this your understanding of the regs, too?

Hi

If the 402g limit is exceeded by 16 cents, what is the correction? Can the $75 de minimus rule under Section 6.02(5)(b) of Reve Proc 2008-50 EPCRS be applied since it will cost more in payment fees to distribute the excess than 16 cents? Should the participant include in his 1040 as taxable income, or is there a de minimus income tax rule too?

thanks!

A calendar year client puts their 2009 corporate return on extension, files it on 4/12/2010 with a $0 pension deduction. Later it is determined that a minimum contribution is due. Client makes the contribution by the 9/15/2010 but does not amend their corporate return.

Is the contribution allowed to be carried over to the next year? I know that it would be if they had not put the return on extension, but wanted to confirm if the extension would cause any problems.

401(k) plan with a 1/1 plan year. Plan terminated on 1/31/2010. Plan term payouts have not yet been distributed.

Due to the prorated 415 dollar limit from 1/1/2010 to 1/31/2010, several participants have exceeded the 415 limit - and the excess includes matching contributions.

The EPCRS states "Any matching contribution...is then forfeited and placed in an unallocated account established for the purpose of holding Excess Allocations to be used to reduce employer contributions in the current year and succeeding year(s). While such amounts remain in the unallocated account, the employer is not permitted to make contributions (other than elective deferrals) to the plan."

Well, since this plan is terminated - there will no longer be employer contributions. So putting the match into an unallocated account is not going to do much good. Are there any other alternatives for a terminated plan?

If a VEBA is terminated and monies come back in the form of health Plan overpayments, Medicare, Third Party Subrogation how does the employer handle these refunds to the terminated Trust? Isn't this reversion if not distributed to the participants?

In calculating the alternate payee's share, is non-marital money (money the participant invested in the plan before the marriage) deducted off the top before the 50% split is done, or is this money deducted after the 50% split is done (from the AP's 50% share)?

For example: The total value of the participant's acocunt is $200,000. The particpant's pre-marital amount is $10,000.

Is the alternate payee's share figured 1) $200,000 minus $10,000 equals $190,000. 50% of $190,000 equals $95,000; or

2) 50% of $200,000 equals $100,000. $100,000 minus $10,000 equals $90,000.

#1 favors the alternate payee and #2 favors the participant. Is there actually a correct way to calculate this? If so, can someone make sense of this mathematically for me?

Thank you in advance! This board has some really helpful and knowledgable people.

I recently reviewed a 2008 ADP test that had the low paid spouse of the 100% owner as a NHCE.

I thought all 5% owners were HCE's. Isn't the spouse an owner via 318 attribution?

Spouse had 401k deferrals of around 90% so the adp test was significantly impacted

say a plan sponsor signs a new 401k plan in april 2010 and does not submit for det letter until may 2010 does the IRS say that plan cannot be corrected for a plan document defect or is there some sort of relief for a new plan?

Thanks.

Is anyone aware of any cases finding that an employer did NOT have a complete withdrawal under 4203(a)(1) upon ratification of a new CBA that did not require any contributions to be made on behalf of any employee? That would seem like a permanent cessation of the obligation to contribute (as described in 4212(a)(1)).

I was wondering if there was anyway to set up a PSP with davis bacon offset for testing purposes. Anyone have any luck? Not sure if it is even possible however.....

Thanks,

Jason

New comparability plan with one owner and one NHCE. The only rate group passes for the profit sharing contribution, does that mean there is no avg benefits test required (that would include 401(k) contributions)?