Employer entered into a collective bargaining agreement about 10 years ago ("Plan 1"). The same employer entered into another collective bargaining agreement just a few years ago ("Plan 2"). Employer now wants to cease operation under Plan 2. Employer and Plan 2 meet all the conditions under 29 USC 1390.

Question: Can this Employer avoid its withdrawal liability for Plan 2 by using the Free-Look Rule even though Employer has been contributing to the same multiemployer plan for longer than 5 years under Plan 1 (i.e. Employer is not a "new employer" that the Free-Look Rule was intended to encourage to enter a multiemployer plan)?

Thank you.

Would a minimum benefit offered under a pension plan of $200 per month for certain participants be a "protected benefit" under 411(d)(6) which could not be removed by amendment except on a prospective basis?

I just DL'd the new Firefox.

When creating a post, my cursor is not showing. Plus, if I reply with a quote, it only allows me to type infront of the quote /quote box; I cannot edit the quote in any way (ie, delete unwnated portions). Nor can I even place the cursor back into what I typed in my own message to change anything.

Anyone else having this problem? Is it not compatible with this version of IP Board?

BTW, IE works fine.

I have a document vendor who is stating that unless the 403b plan has a matching contribution, the plan document does not have to have HCE elections in it such as the ability to elect top paid group or to use the calendar year in computing the HCE threshold if the plan has an off calendar plan year. In a 403b plan there is no ADP test and so if no match then there is no ACP test.

I have a plan with HCEs and the plan has comp exclusions and employee class exclusions both of which require nondiscrimination testing. The HCE elections do not appear because the plan does not have a match - thus I cannot elect top paid group or calendar year in the plan document. So how does the plan sponsor make the election - is it operational because the plan does not have to specify the elections since there is no ADP or ACP testing? We have to do testing because of the above comp exclusions. The 401k document has the elections because there is always ADP testing to deal with, but he elections go away if the plan is safe harbor.

Any thoughts?

Just a reminder that Sunday is not only "Spring Forward" day,

it's also pi day.

In recognition, maybe we should get up at exactly 3:14:16 to change the clocks. Ya right.

Calendar year 2009 was a plans first year. I understand the Safe Harbor match satisfies the Top Heavy requirement, but what about the plans first year of existence and a integrated profit sharing contribution....generally if a plan is Top Heavy, you have a Top Heavy p.s formula. How is TH determined in the plans initial year or does it not apply since it is safe harbor and you just use the Non-TH profit sharing integrated formula.

Thanks

I'm familiar with the notion that if an employer wants to "make the plan whole" for a surrender charge when moving from one financial institution to another, the deposit to the plan is considered a contribution allocated under the terms of the plan document.

But a while back I ran across an article that indicated there has been a change that permits a plan sponsor to reimburse a plan for this type of occurance. Of course I now can't find the article and thus have not been able to verify.

Anyone run across a change in this regards, or am I just a bit askew these days?

This is a SIMPLE IRA plan. I'm being told that the employer has either not made or deposited incorrect amounts into the SIMPLE plan for several years. The employee contributions seem to be fine, this is just for the employer contributions.

Can the employer use an EPCRS program to correct or are those not available to SIMPLE IRAs? Is a 5330 needed, plus excise tax, plus lost earnings, needed as well?

Thanks

This is a SIMPLE IRA plan. I'm being told that the employer has either not made or deposited incorrect amounts into the SIMPLE plan for several years. The employee contributions seem to be fine, this is just for the employer contributions.

Can the employer use an EPCRS program to correct or are those not available to SIMPLE IRAs? Is a 5330 needed, plus excise tax, plus lost earnings, needed as well?

Thanks

Plan was a straight profit sharing plan and had a 2 year wait on eligibility & 100% vesting. Then, they added a 401(k) feature with safe harbor non-elective contribution. The 401k and SHNEC have 1 year wait. So there are participants that are eligible to make deferrals and receive safe harbor contributions, but not yet eligible to receive profit sharing contributions.

I have 1 HCE that is not deferring, not eligible for SHCEC (which only goes to the NHCEs), and has not met the 2 year wait to become eligible.

I am cross testing this plan.

1. I believe that my NHCEs that are getting the SHNEC must be bumped up to the Gateway as well even if they're not eligible for the PS yet due to the 2 year wait. Is that correct?

2. My 1 HCE that is not getting anything happens to be non-key. Does he get a top heavy contribution because he is eligible for deferrals?

3. Is my 1 HCE included in my non-discrim because he is eligible to make deferrals even though he is not eligible for ps or SHNEC?

Thanks!

CLient is an LLC with many partners. Several of the partners (Safe Harbor plan) took W-2 sufficient to max their deferral for the year. At year end, several partners' active K-1 compensation (FICA Taxes paid on this comp) is so negative as to wipe out the entire W-2 compenation. Is total comp for these participants a negative number (therefore deferrals are exceeding the 415 limit), or should the W-2 be treated as compensation paid against which deferrals are allowed and the K-1 is considered as a separate issue?

Our office is divided on the issue - seeking additional justification for either side!

A. Farrin

I have a profit-sharing plan that, let's say, "slipped through the cracks" about 3 or 4 years ago. It was not timely amended for the final 415 regs nor for PPA. This was discovered in January 2010 (past the PPA amendment deadline). I prepared an amendment, had it signed and prepared a Streamlined VCP submission, filled out the Appendix F. Schedule 1 and checked the box stating the plan was not timely amended for the final 415 regs. The next box states "Other (i.e., any other interim amendment that complies with the requirements in Rev. Proc. 2007-44 or its successors). Please list:" I checked this box as well and wrote "PPA."

I took a look at Rev Proc 2007-44 and am wondering whether the PPA amendment is an "interim" amendment which I can correct under streamlined VCP.

Does anyone have an opinion as to whether you can correct an untimely amended PPA amendment using streamlined VCP?

If it is discovered that a plan failed coverage for the 2009 plan year and it is just now discovered - plan year ended 6/30/2009 -what is the correction?

Is there a problem in correcting it late?

If your 401(k) plan allows paperless withdrawals of after-tax contributions at any time, when/how do you provide the special tax notice so that it is timely (30-180 days before distribution)?

We are having quite a fuss about this and would appreciate some input. As you know it is fairly common for employers to have employees pay their health insurance premiums on a pre-tax basis. Such a program comes under Section 125. However, in contrast to 125 items like dependent care, etc., amounts "deferred" to pay health premiums do not show up anywhere on a W-2 as they are exempt from FICA withholding. Therefore, if a plan uses W-2 compensation and adds back deferrals including 125, what happens to these health premium dollars?

Example

true gross pay $1000

-health prem. $100

FICA wages $900

401(k) deferral election 5%

Option 1 is they are added back just like other 125 items so that the employee above defers $50 (5%x$1000).

Option 2 is they are ignored and the employee above defers $45 (5%x$900) b/c those are his W-2 wages pre 401(k).

Of course if 1 is correct and the client has been using 2, there is the issue of participants being shorted in their 401(k) deferrals. In addition, if the client wants to calculate under option 2, and makes the appropriate document changes it would seem like a comp test would be needed which might be hard to pass because premiums are a larger % of a lower paid person's compensation.

Document is Corbel, and comp. is defined as W-2 + salary deferrals including 125, excluding expense allowances, fringe benefits, welfare benefits, etc.

Any assisstance (with code sites if possible) is appreciated.

Our company's board of directors has expressed interest in participating in our group health plan. Our plan is self-fund and we are subject to ERISA. What are the challenges and constraints? This project does not seem like a career enhancer for me.

Any advice is greatly appreciated.

I am having a disagreement over the correct trust to use for a Governmental 457(b) plan. I contend that you can use a Rabbi trust for a Gov't 457(b) since it has the exclusive benefit rule and the Rabbi trust is still subject to the plan sponsor's creditors. So a Gov't 457(b) would need a trust (or custodial agreement) that has the exclusive benefit language with out being subject to creditor. The other person says that you can use Rabbi Trusts for all 457 plans. Am I missing something?

If a non electing church employer adopts a 401k plan, certain IRC provisions do apply. However it appears that in terms of coverage, IRC 410(b) does not apply. However the pre ERISA coverage rules apply. I am not sure I understand this - pre ERISA coverage under 401(a)(3) a prior code section states that 80% or more of the eligible employees must be covered.

Can 410(b) rules be applied in lieu of the above?

Also, I assume any plan document would be an individually designed plan since church employers cannot adopt a prototype?

Can H-W company continue to file an EZ if have employee who has not yet become eligible due to min. hours? Thanks for help on this.

What is the difference in spinning assets out of a 401k and into a new 401k due to discontinuing your participation in the plan vs. a plan to plan transfer - ie trustee to trustee non elective transfer?

Thanks