Ditto. I also know a number of other individuals are looking for a fully integrated copy of PPACA. I started doing it myself, but it would take much more time than I have available right now.

A 401(k) plan allows a participant to have up to two loans outstanding at any time. The participant could either take two loans with up to 5-year terms ("personal loans") or one personal loan and one principal residence loan. A participant has purchased undeveloped land. S/he is interested in having a home constructed on the lot which will become his/her principal residence. Can we make a principal residence loan in this instance if it has been a few years since s/he purchased the land?

I posted a message today (04/16/2010) @ about 3:10 pm (my time). The time in the message is 3:10 am.

Yes, I've checked the time zone setting under "My Controls/Board Settings". In fact, it gives the current time as exactly 12 hours earlier than my clock/watch/etc.

Is there some other setting I've overlooked?

From the EOB:

The regulations issued on December 29, 2004, provide that, if a short plan year is created by plan amendment, the ADP and ACP safe harbors is available if both of the following conditions are satisfied: (1) the plan year immediately preceding the short plan year satisfied the 401(k) safe harbor rules (i.e., the plan already must be a safe harbor plan when the plan year is changed to create a short plan year), and, (2) the plan year immediately following the short plan year also satisfies the 401(k) safe harbor rules. See Treas. Reg. §§1.401(k)-3(e)(3) and 1.401(m)-3(f)(3). If the plan year immediately following the short plan year is also a short plan year, then the safe harbor requirements must be satisfied for at least the 12-month period following the end of the short plan year (unless the exception for plan terminations, as described in 2.c. below, applies).

According to the EOB, the conservative approach is to amend the plan year BEFORE the short plan year begins. So your short plan year be from 1/1/2011 through 9/30/2011. But that is based on one Treasury officials remarks at an ASPPA conference, and Sal definitely felt there was room for interpretation. Especially considering the only two requirements set forth in the regulations COULD still be satisfied if you made 1/1/2010 to 9/30/2010 your short plan year.

I disagree with everyone. Ok, just kidding, I agree too. I am such a sheep.

Hi all,

Do the rules on non-monetary compensation apply to just indirect compensation or both indirect and direct compensation, on the 2009 Schedule C? So, in other words, do the rules on non-monetary compensation apply to meals, tickets, gifts, etc. received directly from the plan? Is non-monetary compensation received directly from the plan reportable compensation on the Schedule C?

It would make sense if non-monetary compensation concerned both indirect and direct compensation. But much of the guidance I've seen out there treats non-monetary compensation as a subset of indirect compensation. The directions aren't very clear on this.

Or is the logic that non-monetary compensation received directly from the plan is considered indirect compensation?

Thanks for your thoughts.

Go Braves!

Just read a summary of the health care bill that states that Sec. 10105 and 10101(d) of the Affordable Care Act involves new nondiscrimination rules for insured plans. Does this mean that all companies that offer health insurance, must follow basically the same nondiscrimination rules for pension plans? Is there an exclusion for small companies under 25 ee's?

The 1/1/2009 valuation calculates a maximum deductible contribution of $100,000. This is calculated as of 1/1/2009. So if the contribution is not actually made until 1/1/2010, it gets discounted back to the valuation date, correct? So in essence, the maximum deductible contribution can be larger than the $100,000?

Employee properly elected an amount to be withheld in 2009. Due to administrative error, withholding did not occur through the full year and the full elected amount was not withheld. What are the options the employer has to put the employee in a neutral position (as if the full amount was withheld in 2009)? Thanks!

It appears that, for a partial IRA conversion to a Roth in 2010, the IRA holder will need to wait until December 31, 2010 to value the consolidated IRA balances and determine tax consequences (assuming there is basis in the IRAs and they weren't all deductible contributions). My question is, does this "pro rata" valuation date of 12/31 apply when all IRA balances are converted (i.e., not a partial conversion)? Can the IRA holder in this instance use the IRA valuation as of the conversion date?

An employer wants to merger two 403(b) plans - one provides for hardships and loans and the other does not. As I read the regulations, a plan merger would need to comply with the plan to plan transfer rules. Specifically, the requirement that the receiving plan must provide that to the extent any amount transferred is subject o any distribuiton restrictions under 1.403(b)-6, the receivng plan must impose restrictions on distributions... that are not less stringent than those imposed on the transferor plan."

I am thinking this means that the transferred amounts cannot be made available for loans and hardships. But couldn't the transferred plan be amended to provide for loans and hardships before the transfer? And then aren't we in the same place as with 401(k) plans where the IRS has esstentially said you can allow these types of options because it is treated like a plan amendment?

We restated a document for EGTRRA and are going to submit it to the IRS for approval. Is this plan exempt fromt he user fee?

401(k) plan

less than 100 EE's

at least one NHCE

initial effective date, 1/1/99

My little chart says it is exempt, but I want to make sure.

Our company is closing- one of the employers is starting a new company or taking over this company. They have decided to close the 401k plan. However they have mentioned that there will be charges incurred, administrative charges to close it, and these charges will be charged back to the employees. This is a very small company.

Is this legal? do they have to give written notice of any administrative fees they will charge?

I have another 401k plan with a company I used to work with, and they charge quarterly fees for administrative costs, and they have always given at least 30 days notice of any changes to the plan.

There are very few employees in the plan, but there are also some former employees that are still in the plan. If charges are legal and incurred would it be to all members in the plan, I assume. Is there some reasonable way to determine the actual fees and how they are divided amongst the employees?

who would I ask these questions? Attorney General?

Employer A and Employer B (controlled group) have been participating in a Safe Harbor 401(k). During 2010 (not sure when) relationship changed and Employer B no longer part of the A/B controlled group. Employer B now wants to spin-off their portion of the A/B plan into their own plan mid-2010 and want that plan to be a Safe Harbor plan (same provisions that were inthe A/B plan).

If Employer B establishes the plan year as the calendar year, then the first plan year obviously would be fewer than 12 months.

Would this be a "successor plan" for Employer B prohibiting them from establishing a safe harbor plan for the first calendar/plan year (more than 50% of eligibles in the Employer B plan participated in the A/B plan)?

Would the obvious solution to be safe harbor for the first plan year be to establish the first plan year as off calendar year and then (if they want/need to) do a short plan year and then go calendar/plan year?

Company sponsored an individually designed target benefit plan - (set to amended for EGTRRA in 2011). They decided they wanted to switch to a profit-sharing plan. So they signed a volume submitter document profit-sharing document (with a minor variance from the specimen document) and merged the target benefit plan (individually designed) into the profit-sharing plan (VS)

The profit-sharing plan was effective beginning 7/1/09. I would like to get a determination letter since there is a variance from the specimen plan, but am unclear whether I need to do so by 4/30/10 (the deadline for EGTRRA Restatements for M&P and VS plans).

Can anyone point me in the right direction?

This is a complicated situation, so I'll see if I can hit enough of the highlights to get the questions across. Facts are not in duspute:

We (I'm with the sponsor) have a large plan with lots of participants (more than 125,000). All transactions are paperless except for hardship withdrawals, and those few people whose accounts still have money requiring spousal consent.

Participant gets a virus on his home computer that "scrapes" his social security number and password and sends it to the bad guys (BG). BG uses that information to log in to the account, and changes the banking information. Participant receives notice of change in banking information, but disregards it.

BG waits through the required 7 day wait on banking changes, requests a $9,500 loan with direct payment to the newly defined bank.

Another week later, Participant receives paystub that shows a hefty loan payment being deducted from his check. He calls the call center, which triggers research. Needless to say, the money is no longer in the receiving bank. It went to a bank in Russia, and may or may not still be there.

We see two sets of issues:

1. The money has left the account, and we're seeing the participant as the responsible party. But at a high level, do we treat this as a loan and continue loan payments, treat this as a loan but allow him to stop payments, or treat this as some kind of investment loss.

2. What is the tax treatment of the event? 1099 R Early distribution no known exception; 1099 R Early distribution exception applies; No reporting required. Fortunately, it was a 2010 event so we do have time to figure this part out.

Anyone with actual experience in a similar situation?

In the post-PPA world, for a cash balance plan that is not subject to 417(e) whipsaw that defines the accrued benefit as the account balance, is it still necessary to convert the account balance to an annuity if the plan is being tested on an allocations basis (as part of a 410(b) test). Or can the account balance be uses as the allocation for purposes of determining the normal allocation rate?

Opinions?

Second question, is the pvab for top heavy testing the account balance? (Obviously this is a document question but the ones I'm working with are foggy at best on this issue and aren't necessarily PPA final form, e.g. Corbel).

I was asked to do a DB proposal for a company that as of March 2010 terminated all of the rank and file employees and now only the two owners remain. The owners want to set up a plan for themselves effective 4/1/10. If the plan was set up with no past service credit I am wondering if there could be any issues with respect to 1.401(a)(4)-5(a) nondiscriminatory timing of amendments (which includes the establishment of a plan)? Any input is appreciated.

Can a plan sponsor craft their own rules for counting Hours of Service under a 401(k) Plan? In this case, the plan sponsor is a university and has historically permitted instructors (similar to adjunct professors) to participate in the 401(k) subject to the plan's 500 Hours of Service requirement. Instructors are paid based on the number of classes (and class hours) they teach per semester. The university has historically tracked instructors' Hours of Service for 401(k) Plan purposes by crediting them with 2 Hours of Service for each 1 "hour" (really 50 minutes) spent in class. Thus, each hour taught by an instructor results in 3.0 Hours of Service (1.0 hour for the in-class time plus 2.0 hours of prep time). Based on a quick read of the regulations, it does not seem to me that a plan sponsor can craft it's own system for crediting service or establishing Hours of Service equivalencies. Am hoping I am missing another way to think about that. Thanks.