Can a non-safe harbor plan ammend the document and provide notification to participants that it will become a safe harbor (non elective contribution) plan at any time during the year or does it have to start on January 1st for a calander year plan?

Individual worked for a large non-profit and is a participant their defined benefit plan. She has been retired and in pay status for a few years. Recently, her husband died. The plan then reduced her benefit by 50%. Plan reps refer to this as a "true" joint & survivor annuity. Apparently, the benefit is reduced regardless of whether the participant or non-participant spouse dies first.

Participant says that she did not know she signed up for this. The benefit election form shows participant checked a box next to a benefit described as “Joint & Survivor Annuity with a survivor benefit of ___% (enter 50, 66 2/3, 100).” Participant checked this box.

The SPD for this plan describes Joint and Survivor Annuity as follows: “Benefits will continue for another person in the even of your death. You may elect to receive an adjusted income during your life and, upon you death, 100% of this income will continue for the life of the person you designate. Alternatively, you may elect to receive an adjusted monthly income while you are both alive and then 50%, 66-2/3% of that amount will be paid to the survivor for life when either of you dies.”

My Question:

It appears from the description above, that the SPD is offering a 100% joint and survivor annuity and a “true” JSA. However, the benefit election form did not differentiate b/w the two. It only had that one option I described above.

It seems participant would have an argument at the very least, that the benefit election form was ambiguous as to whether she was electing a 50% JSA or a true JSA. On a larger scale though, does this plan lack the option of a Qualified Joint & Survivor Annuity as required by IRC section 401? Anyone have any suggestions or advice here? Is it possible this plan is not qualified or that the non-profit status of the plan my allow it not to offer a QJSA?

Thank you thank you for any help

Is anyone working through the ASPPA CPC module on non-qualified plans?

Is there anything that would prohibit the establishment of a cash balance plan for, say, 5 years, the termination and distribution of assets, and the restart of a cash balance plan in, say, 2 years?

The real purpose would be to allow the self direction of allocations to bypass the low NRA prohibition.

This is not my idea and not something I would advocate - it is a question posed to me.

Thanks for any comments.

Client never got a separate tax id for their retirement plan trust. Plan investment accounts have been opened using the company EIN.

Should they order a tax id for the trust now? If so, are there any issues/extra steps to address when changing the plan's tax id number?

DB plan is terminating in a standard termination. PBGC timeframes, unless there is a Notice of non compliance, are pretty straight forward, albeit strict.

Does anyone have a sense of how long 5310 LOD's upon termination are taking?

Is there any reason the plan could not submit both the NOIT to participants and NTIP simultaneously?

We have a client with two plans, a 403(b) plan for elective deferrals, and a second plan for match contributions. Would both plans be subject to Title I and the Form 5500 requirement, even though no match contributions are deposited into the 403(b) plan?

Thanks

I am trying to get an clear picture on what effective interest rates to use for EOY plans. The only example I have from Mr. Holland did not address an existing PFB. Here are my examples please let me know if you agree or disagree and if you disagree please explain why and how you think it should be done.

Example 1: what would be the PFB for doing calculations (determining Shortfall, burn, etc), for a 12/31/2010 EOY valuation.

PFB existing at 12/31/2009 = $2000

Excess contributions for 2009 plan year at 12/31/2009 = $800

EIR for 2009 = 5%

EIR for 2010 = 6%

So I am thinking the PFB for determining shortfall, etc would be:

(a) Existing PFB brought forward at the current year EIR to be $2,120

(b) Excess contribution for 2009 at 12/31/09 brought forward to 12/31/10 at prior to be $840

Sum of a and b = 2,960.

Example 2: Or do you think it should be $2000 plus $800 brought forward at 6% to get 2,968?

The way I read the final regs I think it would be Example 2. What do you think.

As added by the Pension Protection Act, Section 101(l) of ERISA requires the Trustees of a Pension Fund to provide an estimate of the dollar amount of withdrawal liability. The Section then states that the Trustees may impose a reasonable charge to cover the "cost of copying, mailing and other expenses involved in furnishing the notice." This language seems to only allow the Trustees to charge for the expenses of sending the notice and does not allow a charge for the actuarial fees in preparing the amount of withdrawal liability. Is this right? I have a Pension Fund that wants to charge $2,500 for the actuarial fees in preparing the estimate (which seems excessive in any event). Thanks.

The 8717 instructions describe an exemption from the User fee "...that applies to all eligible employers who request a determination letter within the first five plan years or, if later, the end of the remedial amendment period that begins within the first five plan years with respect to a plan...An application for a defined benefit plan from an eligible employer for a plan that was first effective on or after January 3, 1996, will automatically meet this requirement..."

I'm submitting the 5300 for a cash balance plan that was originally effectiving 1/1/2000, and is on Cycle D. The plan received a determination letter on 2/13/2003.

Does this exemption apply to my plan?

Thanks!

Safe Harbor Plan with enhanced match. No other Employer contributions permitted. Calendar year/plan year. Employer now (effective 3-1-10) wants to amend the Plan to add a Profit Sharing feature. Understand the prevailing thought is can't make changes to a safe harbor plan mid year (couple of limited exceptions) but just wondering what others may have done.

Seems crazy that the rules would not prohibit the Employer from establishing a separate PS Plan for this feature yet not permit the addition of the PS feature to the safe harbor plan.

OK, let's say we're the TPA. Participant sends us a letter of impending foreclosure. Let's say we prepare the paperwork for the client to execute, and the client signs off on it and we don't send them support for the hardship.

My opinion is that this would NOT make a fiduciary because the plan includes objective criteria and there is generally no judgment involved (for example, you either have medical expenses or you don't). I can think of a handful of situations where judgment would be involved.

Others in the office take the opposite opinion and say "approving it is a fiduciary function." I say approving it would be "performing purely minesterial" activities related to plan administration.

Assume the Plans use the safe harbor standards.

What do YOU think?

Hopefully this is an easy question. Are there any circumstances where a state university 403(b) plan WOULD be subject to ERISA Title 1? The plan has employer contributions, but I'm assuming this is irrelevant because the plan would be considered a governmental plan under ERISA.

We are in the process of finalizing w2 for the nonqual plan. I have a conflict with box 1. One item I pulled says to include Income in Box 1 and Box 12 using code Z. Another item only mentions Box 12 using code Z.

Anyone know which is correct.

thank You

Our employer allows employees to make their owed amount of insurance premiums to be taken out before tax. They also offer a FSA.

Does our employer need a separate premium conversion plan document for our pre-tax health plans that fall under section 125? Also, do these premium conversion plan documents expire every year, as in, the 12 months defined by section 125.

I guess my basic questions are: As the employer, is this something we have to keep on hand? Is this something we have to do every year? If so, what does an actual document look like and how do we go about filling out one? I've been trying to research this topic but am having trouble finding meaningful answers.

I need help in finding our what shock claims are when you are talking medical cost? Can anyone help?

Say we have a married couple named Jack and Diane

Jack earned W-2 compensaiton in 2009 of $22,000 and is age 60.

Diane had no W-2 compensation and is age 45.

Jack participated in a 401k plan in 2009.

They file a joint tax return and have AGI below all applicable limits.

Jack made a 401k Roth contribution of 22k (16,500 + 5,500) in 2009.

Do we agree that Form W-2, box 1 for Jack would show $22,000 since all contributions are Roth and taxable?

Is it true then that he would be able to make a $6,000 Roth IRA contribution for 2009?

And is it true that he could make a $5,000 spousal Roth IRA contribution for 2009?

This means with W-2 compensation of $22,000 Jack would make retirement plan contributions of $33,000 in total.

Is the above accurate?

Thanks.

I noticed the following language in today's newsletter from benefitslink (McKay Hockman article):

Note that a recharacterization may only be made when a traditional IRA is converted to a Roth IRA. A recharacterization may not be made when the conversion is from a 401(k) (or any other qualified plan) to a Roth IRA.

http://www.mhco.com/Library/Articles/2010/...har_010810.html

Any additional info explaining why (reg citation?) recharacterization back to a qualified plan is not permitted would be great. Thanks!

Basic question. Plan has last day rule. Employee terminates 12/31. Are they eligible for part of the contribution? Relius excludes them from the contribution since they have a termination date.

Why is it that the last two Presidents want to get rid of 401ks as opposed to making them better?

First it was Bush with his LSA, RSA, and ERSA Plan.

Now its Obama and Retirement Annuities.

Obama to meddle with your retirement account?