A client of mine (governmental hospital) received a notice from their DC plan provider/recordkeeper advising them about FAS 157 - do governmetnal DC plans have to comply with this reporting requirement?

Mass layoff creating a presumption of partial termination of a DC plan occurs in a single month, say April. Who must vest?

No:

1. anyone who voluntarily terminates (of course must be careful regarding constructive discharge) before the RIF.

2. anyone who voluntarily terminates (same as above) after the RIF

What about those employee-participants who are terminated for cause during the year - either before or after the RIF?

I believe they are counted for purposes of calculating the turnover, but it doesn't seem that they should be entitled to vest upon the partial termination.

However, Rev Rul 2007-43 includes a sentence that may indicate that EVERY terminated employee during the year must vest:

"If a partial termination occurs on account of turnover during an applicable period, all participating employees who had a

severance from employment during the period must be fully vested[.]"

Is the partial termination viewed as occuring in April, so that the earlier and later terminations during the year do not require vesting? Thus, the significance of the "applicable year" being the plan year (or possibly longer where there are multiple related layoffs) is to determine whether a partial termination has occurred. But determining who must vest depends on whether their participation terminated as a result of the corporate event (i.e., they were laid off or constructively discharged).

Put differently, if a partial termination occurs in April (and it's the only partial termination for the year), then only those who are laid off as a part of the RIF vests upon the partial termination.

Is there a general consensus on this?

ABC Corporation has 401(k) Plan A and has now started a new 401(k) Plan B. Both plans have a six year graded vesting schedule.

Plan A does not exclude YOS prior to the plan's effective date (1/1/06) but Plan B does (actually the effective date of the plan or a predecessor plan). The effective date of Plan B is 1/1/09. I don't think there is any question that Plan A is a predecessor of Plan B.

Currently Plan A is in the process of merging into Plan B.

If anyone can weigh in on the following issues, it would be much appreciated.

1. Does everyone agree that the change in vesting schedule rules apply here?
   
2. If 1 is yes, would you treat the vesting protection as applying only to amounts already accrued in Plan A, or to future accruals as well? I know the IRS takes the position that the protection applies to future as well as to past accruals, but I get the impression that this isn't necessarily the position embraced in the field. Nor does the IRS position specifically address plan mergers.
   
3. If 1 is yes, do you agree that the three YOS to determine who could make a vesting schedule election applies to all YOS, not just those subsequent to the effective date of either Plan A or Plan B?
   

Thank you for any and all replies!

P.S. I believe Plan B was created to get around the pro-rata safe harbor allocation rules for nonelective contributions in Plan A. It did not just "happen" to exist.

Dog

Can someone explain the new NRA rule (at least age 62) as it relates to DC plans and whether an amendment is required.

Does Gap Period Income need to be calculated on excess deferrals from a tax exempt or governmental 457(b) plan? All the articles discuss WRERA in a general defined contribution plan sense but don't specifically mention that the WRERA would or would not apply to a 457(b) plan. I'm not convinced one could apply it to a 457(b) plan since the 457(b) regulations don't specifically reference 402(g). However, what is the interrpretation of "any income allocable to such amount" in §1.457-4(e)(3) and "with allocable net income" in §457-4(e)(2)? Thanks!

How much time is really allowed when you reach the 180 day extension. Can this be contested? We are about to go to arbitration regards to implementing a alternate schedule or if we lose the arbitration the possibility of implementing a default schedule that can be adversely implemented. We are in a collective agreement and we have a defined plan that is in the critical status, we also have a 13 year rehab plan that has been tenatively approved. We are being told that if we lose the arbitration that a lessor default schedule can be enforced even though another larger group has accepted a better offer. It is my understanding that a arbitrator has the power to implement a better plan or can force us to accept a lessor default schedule. Any input would be greatly appreciated.

PabloQ

I am usually pretty good with keeping up to date. On occassion, one slips by. The new Schedule C snuck up and bit me hard!

Client pays me $1,000. Money does NOT come from trust assets. This fee must now be reported on Schedule C?

Suppose that a client pays me $3,000 for services. In addition, for processing distributions I get $100 from trust assets. These both need to be reported on Schedule C? Am I right in concluding that getting any direct compensation requires that indirect compensation must be reported on Schedule C?

What is the criteria that determines what is reportable indirect compensation? Where can I find details about the reporting to the client about indirect compensation that exempts this compensation from Schedule C?

What about compensation that is already reported on Schedule A? Do I need to again report the broker's commisions on Schedule C?

Sorry about imbedding so many questions, but I really was caught napping on this one.

We are told that EFAST2 eliminated the SSA with the 5500, BUT the SSA must still be file if conditions are "right". Everywhere I look the instructions direct you to the IRS website for details. I find nothing. I can't even find where the form should be mailed. Since I have an amended 2007 Form to file, this issue has come front and center Am I looking in the wrong place, or is dementia finally setting in? Any direction would be appreciated!

A client of mine needs to have their FASB 158 accounting completed. Their auditor wants us to do a yield curve analysis to support the choice of a discount rate. Compare the sum of discounted values using yield curve versus sum of discounted values using one single discount rate, what is the percentage difference between the two sums where we may conclude the choice of discount rate is supported by the yield curve?

If you have a clear case of gross misconduct--embezzlement for which employee has been terminated and arrested--and are denying COBRA rights under group health plan, any reason the gross misconduct exception would not also apply to bar COBRA continuaton under Health FSA where the employee has a positive balance under the plan? Seems in either case a termination due to gross misconduct is not technically a COBRA "qualifying event" so there would be no right to continued coverage and the Health FSA balance would be forfeited to the extent the individual had not incurred reimbursable medical expenses prior to termination.

A partner of a Company that sponsors a 401(k) Plan would like to make elective deferrals into the Plan.

Where on a Schedule K-1 do I find the partners Net Earnings from Self Imployment?

What about the Guaranteed Payments on the K-1. Can this be used towards calculating Net Earnings from Self Imployment?

Any help would be greatly appeciated.

I think I should have posted this here:

I recently submitted a claim for benefits on behalf of my client. The claim is for waiving a DB Plan's recoupment efforts. The Plan assets are held in trust by Bank. Legal counsel for Bank wants me to direct all communication to him, and when I submitted a claim to waive recoupment, the Plan Administrator did not respond. The Bank's lawyer responded, referencing my claim as a letter, and didn't address its points at all. What should I do...write to Plan requesting decision from them? The Plan Doc and SPD specifically state there is a benefits committee that responds to disputes and claims.

Was a DC rollover account in a DB plan subject to a Mininum Distribution for 2009? If not, was some type of amendment required?

OK, so as I understand it, we really do have to complete the "Paid preparer" part of the 945. I personally have a PTIN, for this specific reason. So...

they ask for my signature and my PTIN, and my firm's (a corporation - it says "Firms's name (or yours, if self-employed)" - I'm not self-employed) and EIN. But they don't ask for my name, so I'm not giving it to them (except on the third-party designee line, which is a different issue). Does that make sense (that the form should have my signature but not my name)?

Is it correct that they want an *individual* to sign and be linked to a PTIN (or SSN)? For my small company, it all boils down to me anyway, but is Joe Smith who works for Bisys or whomever using his own PTIN? Somehow that doesn't make sense to me, and I get really hung up on things that don't make sense. I relied on someone else's guidance on this a long time ago and now I'm questioning it.

thx

Does anyone have any experience with freezing a 401(a) plan and the steps involved? The plan in question has several compliance problems and the current TPA has not not been fully their obligations and has contributed to some of the operational plan issues.

I recently submitted a claim for benefits on behalf of my claim. The claim is for waiving the Plan's recoupment efforts. The Plan assets are held in trust by Bank. Legal counsel for Bank wants me to direct all communication to him, and when I submitted a claim to waive recoupment, the Plan Administrator did not respond. The Bank's lawyer responded, referencing my claim as a letter, and didn't address its points at all. What should I do...write to Plan requesting decision from them? The Plan Doc and SPD specifically state there is a benefits committee that responds to disputes and claims.

Can a participant specify that a withdrawal come only from their Roth 401(k) or must the withdrawal come out pro rata from both their Roth account and their pre-tax account?

If a participant's account holds assets that are worthless, are the assets formally distributed when the participant is eligible for distribution or is some other disposition or treatment preferable? If assets are distributed, is Form 1099-R issued showing a zero value?

In defining the classification groups for our cross-tested plans, our document calls for group #1: "An allocation up to the maximum permissible amount under IRC §415". All other groups call for a pro-rata allocation among the individuals in each group.

If there is more than 1 individual in group #1, would you interpret the allocation language to mean that you can basically give the individuals in group#1 any arbitrary amount? For example, we give the 415 max to one individual, $15,000 to a second individual, and $0 to the third individual. Granted, it all has to pass 410(b)/401(a)(4), but if it does, would this sound right to you? FWIW, Group #1 is always used just for HCEs.

Thanks

What is the current turnaround time for an IRS Letter of Determination upon plan termination (Form 5310)?