Trying to find guidance about the definition of "calendar-year" according to the IRS. Have a client that bases end of plan year on last payroll date. Is this considered a "calendar-year" plan?

Good Morning

I am trying to figure out if a prototype document would be able to be amended to add a provision for the contribution of unused PTO (under Rev. Rul. 2009-31) and keep its prototype status. Normally under Rev. Proc. 2007-44 the good faith amendments have to be for issues related to qualification. I am just not sure if this falls under that, or if a prototype would have to wait for the next restatement cycle before adding this provision without risk of becoming an IDD. Any thoughts would be greatly appreciated.

Thanks

Can a safe harbor plan amend the plan mid year to add a 59-1/2 withdrawal feature. I believe changes can only be made as of the first day of the next plan year. The exception, as noted in IRS announcement 2007-59, woudl be to add a Roth feature or hardship withdrawal.

A participant in a 401(k)PSP will be part-time this year (<1,000, >500 HOS). While the participant is still eligible to defer, the DC plan is NOT Top Heavy. The client also has a DB plan, so would this participant still get the Top Heavy since the DB is Top Heavy, which would then initiate the Gateway in the DC?

When preparing a cash balance val should the projection rate be the same as the actual crediting rate for the year? For example, a 12/31/09 val credits at the 30 year treasury from the prior November (4%), but when the val is completed you know the November, 2009 30 year treasury is 4.31%. Can you use 4.31% in the val for your projection?

Employee was just rehired after a 6-year break in service. He had a couple of years of service, and was eligible to participate in the 401(k) Plan prior to the break, but did not elect to do so. Therefore, he was 100% vested in deferrals, and also 100% vested in the company matching contribution, but when he terminated, both of these were $0. So do we include the prior serivce or not under 411(a)(6)(D), which provides for excluding serivce for "nonvested participants." He was a participant, and "technically" 100% vested, but had no balance. Can we exclude the prior service or not? Can he be considered a nonvested participant if he was indeed a participant, and was at the 100% vesting level, but just didn't have any account balance because he elected not to particpate? Seems like 411 generally doesn't exclude serivce for vesting for years in which the participant elected not to contribute "salary deferral" type of contributions.

Plan allowed excess contributions and failed the ADP test for 2002. It needs to distribute excess contributions but 2 HCEs due distributions are no longer employed and already rolled their funds over to an IRA. Is there anything the employer can do to correct the defect as to these 2 former employees?

This involves a jointly-trusteed multiemployer health and welfare fund. I was wondering about the fiduciary implications for a participating employer when the employer refuses to pay a COLA adjustment when the bargaining agreement has expired and the employer kicks the employer out of the fund. I've researched the issue and found that there is at least an argument that a COLA increase is not a term and condition of employment and does not have to be maintained (not part of status quo). My question, however, is what happens if the Fund kicks the employer out of the plan rather than filing a NLRB claim? Obviously the employer would provide insurance under its own plan, but would there be any type of breach of fiduciary duty on the part of the employer for not paying the increase. More generally, are participating employers fiduciaries?

At the Los Angeles Benefits conference, the topic of tax practitioner registration as it relates to third party administrators of qualified retirement plans and preparation of Form 5500 was discussed. At the time, the impact of the registration requirements for this group was unknown.

Does anyone have further or more current information on this issue?

I have been in this industry since 1991 and experienced a year without a pay raise only once before, in 2002. With the problems in our economy and the market, we have not recieved any raises in our office since April 2008 (we all get a raise in pay by the end of April, as opposed to our anniversary). We did our EGTRRA restatements from November 2009 through April 2010, and billed for them too. While our employer hasn't let us know if we aren't getting a pay raise, she's hinting that it won't happen for the second year in a row. We are concerned.

Is anyone else out there in this business experiencing this? Yes, we have lost some clients - some have gone out of business and some have elected to terminate the plan to save money. We have aquired some new plans, but not as many as we have lost. My co-workers and I are worried that we billed out so much extra with the restatement, yet no raise? We also completed the ERPA at our owner's request.

Your thoughts?

What is your company doing to satisfy the DOL requirement to notify health plan eligibles of the CHIP fee assistance program? Are you waiting until Open Enrollment, using first class mail, e-mailing employees or a combination of the above? The majority of our employees do not have work e-mail access and first class mail is highly prohibitive.

We have Company A (Plan Sponsor and Employer) and Company B (a participating employer). Both make up an Affiliated Service Group.

Company B has zero ownership in Company A, but Company B is owned 100% by an individual who is participating in the Plan. This individual does not earn enough to be an HCE based on comp, but is he a 5% owner for plan purposes (HCE and Key Employee determination)?

Reg. 1.414(q)-1T, Q&A-8 seems to say, yes, the individual is considered a 5% owner. But there is just enough ambiguity in the regs to make me doubt myself.

Can someone confirm?

Thanks.

Can an employee make an prospective election change in anticipation of an event. for example, if an employee is getting married on June 1, can the employee make an election to add his new spouse (family coverage) today to be effective June 1? I don't see anything in the regulations that would prohibit this.

If a participant is taking a distribution from a 401k plan and the plan does require spousal consent but the balance is under $5000.00 does the participant have to get a spousal consent?

Does anyone know of a prototype plan document provider that can provide a prototype for a governmental 401(a) defined contribution plan (or a template in prototype format for such a plan (i.e., with a basic plan document and adoption agreement), even if not pre-approved by the IRS)? Thanks for any assistance.

DB guy asking 401k questions........

Plan is a Safe Harbor 401k with the basic match contribution. The Plan Administrator appears to be matching per payroll period with no True Ups at year end. If a participant is at the max comp level and maxes out his deferral for 2009 (not catch up eligible), is there any way that he can be allowed to receive a SHMAC of $11,339?

By my calc's 4% of $245k is $9,800.

In the past we've completed the 8109-B coupon and instructed the client to deposit the federal tax withholding with the bank that they have their business checking account with; however in the area that we're in most all of the local banks are now refusing to accept the funds (some will if it's done electronically but most of our clients don't want to go this route). Has anyone else run into this? Any suggestions? We've had some of our terminating plans mail in the check to the address on the back of the coupon just to get the funds in.

Any input would be greatly appreciated.

Thanks!

I often get plans that fail the ADP test, but there are no refunds because of catch-ups.

If this happens to one of your plans, to you tell the ER the test fails but there is no refund? Or do you just say the plan passes?

Here is one I haven't seen before. A 401(k) plan terminates as of 5/1/2010. The ADP test is run and an HCE who had already contributed $16,500 must take back $11,000 of that deferral. He is leaving to go work for another company who has a 401(k) plan with no waiting period. I can find nothing that would allow them to make any contributions to his new company's 401(k) plan. It's a shame, because if he had only contributed a few grand, he wouldn't be having this problem. But he likes to put it all in as early as possible and historically has had to take little or nothing back.

Anyone disagree?

Tim

I am in the process of putting together a wrap document for all of our Sect. 125 plans. Currently, our company offers AFLAC deductions on a pre-tax basis, thus making it a part of 125. If I include the AFLAC info in a the Wrap document, does it then become liable for COBRA and all other ERISA requirements? I have seen conflicting opinions on this.

Any help is appreciated?

Anyone else with AFLAC on a pretax basis and a wrap doucment? How were you advised to structure things?

TIA