Not for profit has a deferral only 403(b) and a 401(a) with 'varying' contributions by person. Since 2002 even Not for Profits have had to pass discrimination testing. Oh by the way - we are taking the plans over for the 6/30/2010 year....

As I read 415, we aggregate the 403(b) deferral with the 401(a) contribution to test maximum annual additions. Indications are this was 'overlooked' in the past so I am asking for confirmation on this point first.

Since the 401(a) contributions are such that they cannot make any safe harbor formula, and they cannot pass general testing on a contributions basis, I now go to cross testing. IF (that is a big IF because I do not know the results yet) each rate group does not pass 70%, I will need to perform the Average Benefits Test. If I have to do the ABP, then again I include the deferrals into the 403(b) plan, correct?

My thoughts are yes and yes, but I am willing to listen to rebuttals.

Participant completes an enrollment form electing ROTH deferrals. Client withholds the deferrals from the paycheck for about one year as pre tax deferrals. Deferrals went into ROTH account in the 401k plan. What is the fix?

Are employees allowed to drop dependents midyear according to section 125? In this case, an employee wants to remove dependents however the dependents have not become eligible for health insurance under another plan and are not being forced out due to age, the employee just wants them removed. I've heard conflicting information regarding whether or not this is allowed. Can anyone clarify?

A Plan document currently excludes union employees. The employer has decided to change the Plan’s eligible employee definition to include union employees and has already begun submitting 401(k) contributions to the Plan on behalf of the union employees since the beginning of this year (2010). Question: If the Plan is amended no later than the end of this Plan Year (2010) to include union employees as an eligible classification, would this qualify as a timely adopted amendment under the “discretionary amendment” rules or did the amendment need to be in place prior to the employer’s implementation of this change? In other words, does the ECPRS correction method for the early inclusion of ineligible employees only apply if the Plan was not amended by year-end?

Hi all,

I've been trying to research this issue and just get a headache and more confused, the more I read about it......My twin boys just turned 1 and I have some savings in an ING account for them, but looking into transferring that to either a Roth IRA or my state's (north carolina) 529 plan. I can't figure out which would be the best bet. From what little I understand, with the 529 plan, I can have a state tax deduction, but the money MUST be used for education (either for my boys or it can be transferred to another relative)...with Roth, I can withdraw the money for college (only what I contributed, not the gain) at no penalty, but I get taxed on it now.....Am I correct? Is there anything else I should know? Any recommendations would be GREATLY appreciated!!

Michele

Hello, I am wondering if anyone has any data on what an average fee is paid to a third party investment advisor to our 401k plan. Our commitee asked me to determine if the fee we are paying is reasonable, and I have no idea how to find this information. I know it is probably based on the size of the plan, but any ranges or other information would be helpful. thanks!

I never came across something like this...

A participant turned 70 1/2 in 2010. He is actively participating in the company 401k.

He has an outside IRA that he would like to roll into the 401k plan to avoid the RMD.

The plan doc allows for the RMD to be at retirement date instead of 70 1/2.

Is there anything I would need to be concerned with him bringing in the IRA to the plan?

The only think I see for him to do is to take the RMD for 2010 before rolling it over to the plan.

Any thoughts or concerns?

Where on the Form 5500 does the name of the Trustee appear?

We processed a distribution of a participant's account in full (mistakenly thinking we had a distributable event). Now we need to correct the error. Is an impermissible distribution of a participant's full account considered an overpayment in EPCRS? I am trying to figure out how to correct the error and the overpayment correction is the only area I can find that seems to apply to our situation.

Thanks.

The final 401m regs prohibit prefunding, but mainly to prevent the acceleration of a tax deduction. A tax exempt entity does not get tax deductions. Therefore, if a 403b allocates the match each payroll period, but has a 1000 hour and last day requirement, does this not still violate the prefunding rules? At least in terms of contributions being made before the service is performed.

Any comments?

When obtaining employer census data, do you obtain 2 sets of w-2 comp if it excludes Salary Deferrals from the definition?

Generally in a AA you can select to INCLUDE salary deferrals, which i believe would be Box 3 on a w-2, this comp would be used to determine top heavy, hce, 415, etc, but if the plan has no adjustments to comp, then box 1 of w-2 would be used, yet you would still need box 3 for other plan purposes. This has become an issue of debate in our office.

Hi all,

We are thinking about switching from Bank of America (horrible HSA customer service and administration!!) to Wells Fargo to administer the HSA's for our employees. I was wondering if anyone had any feedback about Wells Fargo's HSA admin.

How is their employer website? Is it easy to make funding contributions? Can you enroll a new employee online?

Have you had a good or bad experience with the debit card, customer support, or with submitting a reimbursement claim?

The monthly fee of $4.25 seems a bit high, and I'm sure that our employees are going to be upset, so I wanted to see if anyone out there has any feedback on Wells Fargo before we make the switch.

Many thanks for your thoughts!!

~Rebecca

An employee has medical insurance through her spouse and and an FSA with my company. She recently found out that her spouse's company is changing their medical insurance as of April 1 to a High Deductible Health Plan with an HSA. We do not offer a limited FSA. Does she need to stop her contributions to our FSA?

Does nayone know if the suspension was passed for 2010?

Plan uses statutory 1 YOS/age 21 eligiblity.

Scenario 1:

Owner and owner's immediate family are the only employees. Owner's Kid is hired on January 1, 2010, and owner wants him in the Plan from Day 1. No other employees have been hired since that date and there are no immediate plans to hire anyone else. Would an amendment that waives eligiblity for anyone hired as of 1/1/2010 be allowed? My assumption is yes, since there are no other NHCE's, and therefore there is no issue of discrimination. If the answer is "no, this isn't allowed" then it would seem that this type of Plan would be precluded from making several kinds of amendments, which would seem wholely inappropriate...

Scenario 2:

Same as Scenario 1, except that there are three employees who have been working there for 5 years who were made to satisfy statutory eligiblity. My feeling is that this WOULD be discriminatory because there are NHCE's in the Plan, and as such the amendment is subject to discrimination testing.

Scenario 3:

Same as scenario 2, except that eligbility is amendmed to be immediate. The employer has very very low turnover and is not growing, and it is not anticipated that any new employees will be hired any time soon.

The DOL website still indicates paper filings. Is that right? We have a new client that has to enter the program for 2004 -2008 filings and pay their $1,500 multiple year cap.

http://www.dol.gov/ebsa/faqs/faq_DFVC.html

Does anyone know the time period employee benefit records should be retained? We have health insurance, life, disability, and 401k records going back many years. It would be great to destroy the old records and free up space. Thank you very much.

Excuse me but is has been a while since I worked on an Offset Arrangement (DB Plan offset by contributions to a DC Plan).

In a DB Plan where there are different benefit formulas for different groups, will I need to pass 401(a)(4) for the DB Plan alone before I apply the offset? Or do I only have to pass 401(a)(4) in a combined arrangement with the DC after the offset is applied?

Thanks for all your help.

Can a participant's account be charged to answer detailed questions? I have a participant who is not a trustee who is asking very detailed questions that require a lot of time to answer. Is there a way to charge this participant's account for this time? It doesn't really seem appropriate to charge the plan sponsor. What else can I do?

Sorry if Tom gets this! One more question. The sponsor has a plan year ending 6/30. For the 6/30/09 plan year, if they do not elect to use the calendar year then they will have an HCE since the 2008 HCE theshold for 2008 is $105,000 vs $100,000 for 2007. Question - is it too late to amend the plan? The 11g deadline is 4/15. I see that PPA requires the top paid group election to be made by end of plan year.

What about the calendar year election?