The owners of a company were the only employees eligible to participate in the first year of the plan. During this first year they invested their account balances in 100% of the company's qualifying employer securities (which the doc allows). Ancillary employees enter the plan during the second year and can choose to invest from a menu of mutual funds, but do not have the choice of QES since there are no shares available. Is there a way to construe the plan as not being disciminatory due to the literal unavailability of the company stock? Thanks in advance.

Does anyone have any current experience with an application for a determination upon termination? How long is it taking these days? I have a frozen mmp terminating 12/31/2009 and would love to communicate a time frame to participants. Thanks!

Guy names his 2 adult kids as 50 / 50 beneficiaries of a sizeable account. Few years later he gets married, and makes no changes to his beneficiaries. Few year's later he dies. And now, of course, there are law suits being filed since the account was very large.

Does the marriage supercede the prior beneficiary designations? It seems that the answer is yes, but our client is asking us to provide some "hard-proof." Anybody have anything that might help? Someone must have sued about this before!!

Hi,

Does anyone know the site (i.e., ERISA Section, IRC Section or Reg) that explicitly defines "within a reasonable period before each plan year" for a standard Automatic Contribution Arrangement (ACA) plan or an Eligible Automatic Contribution Arrangement (EACA)?

Reg Section 1.401(k)-3(d)(3)(ii) defines "reasonable period" for a QACA safe harbor notice. Do the ACA and EACA terms refer to the safe harbor notice requirements because of similar language in the Code?

Thank you, in advance.

May amounts "transferred" from another plan on a nonelective basis, as distinct from "rollovers," be excluded when determining whether an account does not exceed the $5,000 limit for mandatory cashouts under 411(a)(11)?

Hypothetical: A profit-sharing retirement plan has never before allowed an in-service distribution. The plan sponsor might like to add an in-service distribution (including before age 59½ from amounts not attributable to 401(k) deferrals) but only if the participant’s claim includes his or her instruction to pay the distribution as a direct rollover into an eligible retirement plan (including an IRA). The plan sponsor cares about this because it wants to permit an in-service distribution only if the participant will use it to preserve retirement savings. (Yes, I’m aware that nothing precludes an IRA holder from taking a distribution from the IRA a day later.)

Can a plan provide this without violating any relevant ERISA or Internal Revenue Code provision?

If this can’t be done, why not?

If the plan provision is possible, is there another reason why a plan sponsor shouldn’t want to do this?

Plan was already cross-tested and had two groups, owners and other employees. Now they are changing to have each employee in his own rate group. Would that require a SMM? The employees are still going to get their gateway contribution.

Would a wholly owned subsidiary of an entity in an affiliated service group be considered to be part of that affiliated service group even if it performs no services whatsoever for the group? For example, assume Company A and Company B are joint owners in Company C and the three entities consisitute an affiliated service group. Company D is a wholly owned subsidiary of B, but performs no services in connection with the group. Company D is not part of the affiliated service group. If an employee leaves Company C to work for Company D would they be eligible for a distribution from Company C's 401(k)? They are no longer working for an entity in the affiliated service group, but they are working for an entity that is part of a controlled group that has a member in the affilated service group. HELP!

Can 401(k) be added to a profit sharing plan this late in a calender year plan?

Our Multiemployer Plan adminstrator just retired and appointed the head Secertary was appointed to be the new Plan Adminstrator by the Trustees. The office manager is the chairman of the trustee's and the secretary's boss. Is this a good thing? Just 1 Example: What if the manager scolds her or he refuses her to take a vacation day on a certain day? Can she somehow do something with the plan to get back at the manager. I think it's not a good idea. What do you Think?

Also what is the duties of a Plan Administrator?

We recently took over a company who I just discovered is not allowing their separated participants to take the employer money out of the plan until two years after the date of termination. As in a participant could be 100% vested in employer money, terminate, but is not permitted to remove it from the plan until two years after the date of termination.

To be quite honest, I have never seen something like this. Is this even allowed? I'm having a hard time finding anything that supports this.

Any thoughts, opinions, or insight about where to look would be greatly appreciated.

Thank you.

Once an executives, at a not for profit company sponsoring a 457(b) Top Hat plan, employment ceases is there a deadline for the ex-employee to make a required distribution (i.e. 60 days, 1 year...) from the 457(b) (other than 70 ¹/₂) ?

I'm still working my way through the final regs published on 10/15/09 as time allows.

Does anyone know if the final regs provided any guidance on short plan years and the impact on minimum funding ? Thanks in advance.

I received a renewal notice for 5500 software a week or so ago. I had not yet renewed but had planned to by year-end. Today, I received the following email:

Dear SunGard Customer:

According to our records, your firm has not renewed your Relius Government Forms software. Our 2010 version of the software will soon be available, and we want to earn back your business!

Order the 2010 version and receive 2011 for free! This is a limited time offer, so you must purchase by 5 PM ET, December 23, 2009.

The telephone number in the email is the Relius number. This offer seems desperate as the incentive seems far loftier than what would be needed to obtain my renewal by 12/23. Did anyone else receive a similer offer? Does anyone know if S/R is in financial trouble? Is this for real or am I the victim of clever spam?

I am hoping for an additional opinion on this issue since I have now had more than one client want to do this.

Plan is setting up a QACA. They have monthly entry dates and increases would take place at the beginning of the year. For employees that are automatically deferring starting prior to 7/1, they want to increase during the initial period (For an employee entering 2/1/10, they would increase 1/1/11). For employees that are automatically deferring starting after 7/1, they want to wait until the end of the full initial period until they are increased (For an employee entering 8/1/10, they would increase 1/1/12). The individual increase schedules would meet the min. deferral requirements.

I don’t think that this meets Uniformity. While there is an exception for partial years, it seems to me that this would apply more towards having increases on a specific date (say July 1 for all) or possibly every 6 months. Separating the employees out into two groups like this just doesn’t look right. Am I looking at the rule in the right way?

So I have an employee that will be terminated after the final payroll of this year and they will have of made their final contribution to their Medical FSA plan.

The employee still has a positive balance in their account.

Does COBRA have to be offered to this employee or can we (the company) just allow the employee to be reimbursed for items that might have incurred after their term date?

A 401(k) plan with a 1/1 plan year merges into another 401(k) plan that has a 10/1 plan year. The merger occurs on 10/1/08.

The 1/1 plan runs an ADP test from 1/1/08 to 9/30/08 and it fails. Are refunds due 12 months from 9/30/08? Or are they due 12 months from 12/31/08?

Here's my situation: An employer wants to pre-fund his PS plan early in the plan year, and then allocate the funds later for the same plan year.

Is there a code section which dictates the point at which a contribution needs to be allocated to a specific participant in a defined contribution plan?

I've been unable to find something that is more specific than "the end of the year", but it seems dodgy to deposit unallocated money. Does a "Last Day Rule" make a difference in the freedom to do this?

Thanks.

An employer has sponsored a calendar year safe harbor 401(k) for several years, using a 4% match to satisfy the SH requirements. They're thinking about discontinuing the plan but have handed out the SH notice anyway. Problem is that they did not indicate what the SH contribution would be for next year.

Don't they have to give the notice at least 30 days prior to the beginning of the year? Or is it 30 days before the first payroll of the year?

And if the notice is not distributed timely to participants, does that mean the plan will not be a safe harbor plan for 2010?

Thanks!

In a multiple-employer plan, what happens to participant accounts of an employer who elects to discontinue it's participation in the plan if the terminating employer is not intending to sponsor a separate 401k plan? Is it considered a partial plan termination? Do those participant's accounts remain part of the multiple employer plan or should they be distributed? The plan in question is a safe harbor so vesting isn't an issue.