This is sort of a continuation of a previous thread, but a different question...

OK, so ERISA Plans say that anyone who works 1,000 hours in 12 months must be eligible for the Plan, even if they subsequently drop below 20 hours. The question is (assumign the plan is using the 20 hours exclusion), will allowing this ERISA eligible employee (who now only works 10 hours a week) automatically violate the 1.403(b)-5(b)(4) "all or none" rule? Maybe THAT's why the TIAA document doesn't include the 20 hour a week exclusion?

I know an SPD must be furnished to an employee no later than 90 days after entering the plan.

However, is there a "too early" date? Could the ER give the SPD to an Employee upon hire, even though her entry date might be 14 months later?

Our Defined Contribution retirement plan requires employees to complete a year of eligibility service before they begin participating in the plan. The year of eligibility service is defined as 1,000 hours of service during the 12 month period beginning on the employment commencement date. Students are not eligible for the plan. Sometimes we hire new graduates who performed services under the "work-study" program when they were students. Are we required to count the hours of service they performed in the work study program in determining whether they have completed a year of eligibility service?

Participant retired last year, not a 5% owner, he was 70 1/2. First distribution due 4/1/2010 but suspended under WREA. Participant should take a 2010 RMD by the end of 2010. However, participant is going to be rehired this year. How does this impact the RMD - can it now be further suspended until the year he retires for good?

Any help is appreciated

Plan failed 2005 ADP testing and we are now just correcting it. Client has chosen the one-to-one method as their correction method.

Total refunds due are $10,000.

Employee A is due a $2,000 refund.

Employee B is due a $3,000 refund.

Employee C is due a $5,000 refund.

Earnings are calculated and

Employee A refund is $2,200 ($200 earnings)

Employee B refund is $3,500 ($500 earnings)

Employee C refund is $4,700 (-$300 in losses)

Now we have to calculate how much the QNEC should be. In Appendix B - Section 2.01(1)(b) it says that the same dollar amount (adjusted for earnings) is contributed to the plan.

So do you think it should be $10,700 (only taking into consideration the positive earnings) or $10,400 (netting all earnings)?

After reading in the EPCRS, Appendix B - Section 2.01(1)(b)(IV)(A), it says that the employer makes a contribution to the plan that is equal to the aggregate amounts distributed. I think that means we could net out the negative earnings and the QNEC would be for $10,400.

Also, if all three had negative earnings, could the QNEC be less than the $10,000?

Any other thougts?

Thanks in advance!!

While doing my due diligence on an IRA we aquired in a conversion I came across a partnership in an IRA. The partnership agreement names the individual as 50% owner rather than the IRA as owner. Regardless, the IRA holder is only one of 2 in the partnership and since the previous custodian was not consulted on the management of the partnership the IRA holder had 50% of the management control over the partnership. I am calling this a prohibited transaction either way you look at; however, the original investment was done in 1992. Do I need to find a 1992 1099R to report this prohibited transaction on? I thought I remembered hearing that we were to report in the year it was found but the IRA ceased to exist as of the year it was done.

My employer in California suddenly reduced my salary 25% per year in July of 2008 and started a salary-reduced SEP program. This was against my wishes and was forced on me. I recently discovered that SARSEPs were outlawed in 1996.

I asked him today what the plan is called since SARSEPs are illegal. He said it doesn't have a name...it's just a SEP, but it's not a salary-reduction plan. He could not/would not answer when I asked him why my salary was being reduced 25% if this wasn't a salary-reduction plan.

In the course of this salary-reduction SEP plan, my salary has also been shorted for the past two years. My boss says that's because my salary is based on the company FISCAL YEAR rather than the calendar year (that it's ALWAYS been based on before). This, of course, benefits the company (by FY, my salary is OVER by 2k, by CY, my salary is SHORTED by 2k). He admitted to me last week that my salary had been shorted, but it seems like he and the accountant ran the numbers in as many ways possible until they got what they wanted. My pay has always been based on the normal CY before, and today was the first time he's said that they're basing it on the FY for ANY reason.

Any advice on how I can get him to stop this salary-reduction!? He refuses to, even though he KNOWS it's illegal (he simply won't use the term salary-reduction SEP). I've been with this company for 9 years, and these are just a couple of many sneaky, evil things this employer has done, but it's tough to change jobs in this rough economy..and I can't afford to with my salary reduced 25%.... (he doubled his salary in the meantime so that he could make the full $49k deposit into his SEP for FY 2010).

Any help/answers/advice appreciated.

Client has no liquid assets and wants to make back 401k contributions in a non-cash asset that he has. We understand that this could give rise (or probably does give rise) to a PT, but I'm wondering if there is a broader prohibition on funding 401k with non-cash. In this case, it is a mortgage. We're trying to tell the client all of the reasons not to do this. It's a pooled acccount.

I'm aware that commissions earned on a Group Annuity Contract are reportable on the Sch. A or the form 5500-SF, however the case may be. I am being questioned on this point. The insurance agent is adamant that those requirements apply only to life insurance & not to other contracts with insurance companies. I spent three hours today arguing the issue without success. Is anyone aware of any guidance that mentions group annuities specifically. Although it seems clear to me, references referring to contracts with insurance companies is not sufficient. I need something that specifically references group annuities.

Thanks in advance for any guidance.

Our plan makes payment of the monthly retirement allowance by direct deposit on the last day of the month. If a retiree dies in the middle of the month, the allowance for that month is pro-rated. A situation has arisen where the retiree died on the 25th of the month and we were notified of the death on the 1st of the next month. The retiree designated someone other than his current wife to receive death benefits, which would include the partial month payment owed to the member for the month in which the member died. Because of the death, we reversed the electronic transfer of funds, resulting in a hardshp to the current wife who "needs" the money to pay bills, etc. But, had we allowed the funds to remain in the amount, the current wife would have been overpaid and we would need to collect that overpayment from her at a future date.

Staff wishes to develop a policy that would prevent the system from reversing the electronic transfer until the survivor is notified of the reversal. We only have 4 days to reverse the funds and this policy would allow an opportunity for the joint account holder to "grab" the money before we can reverse the deposit.

Doesn't the system have a fiduciary duty to protect trust assets and prevent the receipt of funds by someone who is not eligible to receive the funds, regardless of the "hardship" that person may experience? My argument is that allowing the spouse to receive the funds and "pay us back" when we have the ability to prevent the funds from being deposited amounts to an illegal loan of trust fund assets. Your thoughts?

Since the last incident I sent in was two weeks ago and I still haven't heard from them, I'm just wondering if anyone else has asked Relius when the 2010 forms will be available. Apparently I can't use the 2009 forms for these and I have some terminated plans that will be due in August and just wondering if they hope to have them available by then.

James

Can an employer cancel benefits when an employee on FMLA does not pay the required employee contributions? We have an employee who has not paid their employee contributions for well over a month. They were sent a letter and payment coupons with the due dates listed on the coupon. The payment coupon also indicates that if payment is not received by the end of the month in which it is due that coverage will be terminated.

Participant retired last year, not a 5% owner, he was 70 1/2. First distribution due 4/1/2010 but suspended under WREA. Participant should take a 2010 RMD by the end of 2010. However, participant is going to be rehired this year. How does this impact the RMD - can it now be further suspended until the year he retires for good?

Any help is appreciated

Working on 2009 calendar year plan. Sponsor paid some per-diems in 2009 for work performed in 2008. Plan has immediate eligibility. Do these employees get counted in testing or no because they weren't actual employees during 2009?

Thx

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Using the 6 IRS approved safe harbor reasons, does a participant have to be in the foreclosure/eviction phase to be eligible under that reason, (i.e. does the plan sponsor need to see an actual Evicture/Foreclosure Notice). Participant has provided copies of his mortgage statements showing he is "late" by 2 months but it does not reference foreclosure proceedings. What is sufficient proof for this reason?

With respect to a 401(k) safe harbor 3% nonelective plan, can an employer amend the plan during the plan year to exclude a category of participants (i.e. leased employees/ or part-time)? Can you make such exclusions and still stay within the safe harbor? Citations are appreciated. Thanks for your help.

For a tax exempt employer with an ERISA 403b plan, is there an automatic extended due date if the employer files the Form 990 with a 3 month extension and otherwise qualifies for the extension - ie plan year and tax year are the same. So if a calendar year plan, 990 is due May 15 but employer extends to August 15. Does August 15 become the automatic due date for the 5500 rather than July 31? I know the rules for a corporate employer, but not too sure on the tax exempt side.

I have to file an amended Form 5500 for 2007 and 2008 for a calendar year plan. Can I mail them?

A terminated employee in a plan without any repayment provision is 100% vested and receives a full lump-sum distribution, and is subsequently rehired before a 5 year break-in-service.

It seems that the plan repayment provision is not necessary since he received a full distribution. Can his prior service be disregarded?