From the Explanation of PPA (page 102):

Under the bill, the PBGC is directed to prescribe rules for terminating multiemployer plans similar to the present-law missing participant rules applicable to terminating single-employer plans that are subject to Title IV of ERISA. In addition, under the bill, plan administrators of certain types of plans not subject to the PBGC termination insurance program under present law are permitted, but not required, to elect to transfer missing participants’ benefits to the PBGC upon plan termination. Specifically, the provision extends the missing participants program (in accordance with regulations) to defined contribution plans, defined benefit pension plans that have no more than 25 active participants and are maintained by professional service employers, and the portion of defined benefit pension plans that provide benefits based upon the separate accounts of participants and therefore are treated as defined contribution plans under ERISA.

Effective Date

The provision is effective for distributions made after final regulations implementing the provision are prescribed.

Has anything moved forward on this from the PBGC's end?

1.Employer establishes a SEP on form 5305-SEP but cannot find the form. Is this correctable in VCP?

2. Same employer maintains a qualified plan at the same time as the employer maintains the IRS form 5305-SEP, in violation of the terms of the SEP document which states that no plan can be maintained. Is this correctable in VCP and how would you propose correcting it?

A qualified retirement plan is sponsored by a sole proprietor. The plan solely covers the owner-employee and is therefore not subject to Title I of ERISA. Was the plan required to adopt an amendment for compliance with the automatic rollover provisions under IRC 401(a)(31)(B)?

Does a cafeteria plan that offers a health FSA need to comply with Michelle's Law (amend the plan, provide the notice)? The plan does not define dependent child, it defines dependent as Section 105(b) dependent. Shoud we define dependent child for purposes of Michelle's Law?

Participant turned 70.5 in 1997, the same year 401(a)(9) was changed so that deferred retirees got actuarial increases and continued accruals. The plan was amended accordingly in 2003, retroactive to 1997, within the remedial amendment period.

The plan was terminated by the PBGC in 2004. The PBGC determined that this was a benefit increase and that it was 0% phased in because it was adopted less than a year before the termination.

Anybody run into this situation or have any thoughts?

Thanks.

This is becoming a comedy of errors.

We have been contacted by several plan participants who say that the company has been out of business for 2 years and no one can find the sole trustee. However, we have recently received and processed distributions for other participants. Wondering whether someone had actually found the trustee, or someone had forged the trustee's signature, we pulled the plan document to compare the signatures. What we found is that the trustee never signed the document when the plan was adopted.

Any suggestions how to fix this?

I need some help on a COBRA subsidy scenario. I am working on an employment termination/settlement agreement. As a result of the settlement agreement, we are changing the termination date of an employee so that he is now eligible for the COBRA subsidy as the termination has gone from "for cause" so he didn't get his 90 day notice period, to "without cause" so now he gets the 90 day notice period in his employment contract. Employee has been on COBRA since last November and has been paying 100% of the premium. He asked for the COBRA subsidy and we agreed to pay him for the 65% so long as we are eligible to get the credit. I believe that there is nothing that would limit this guy from being eligible for the subsidy and so we could get the credit retroactive to March 1. However, the COBRA administrator is saying that the guy had to complete his COBRA subsidy application and send it back within 60 days of them mailing it to him, which it did back in April, in order for him to be eligible for the subsidy. He didn't complete the application and send it back to them within 60 days. However, if he had, he wouldn't have been eligible for the subsidy back then because his termination date was prior to Sept 1, 2008, at that point. However, I can't find a 60 day limit to complete the application in any law or guidance from the DOL. The only 60 day limit I can see is for persons electing COBRA. This guy was already on COBRA when he received the subsidy application, he was just paying 100%. So, two questions: (1) Anyone know if it is permissible to get the subsidy retroactive to march 1? (2) Anyone aware of a 60 day limit on completing the subsidy application? We don't want to give him the 65% if we can't get a payroll tax credit for it. The CFO doesn't want to claim the payroll tax credit (for documentation/IRS audit purposes) since the COBRA TPA is saying he's not eligible due to not timely completing the application.

Thanks!

For various reasons the plan sponsor wants to pay the $1500 for missing multiple years of filings by cashiers check and not by company check. Will the DOL accept a Bank cashiers check or does it have to be a plan sponsor / company check?

Can a 401(k) Plan ONLY allow for Roth (not pre-tax) deferrals?

Thanks so much!

Please pardon the brain freeze. w/r/t a PPA amendment, are there "PFEA-related" items that should be included?

thnx.

We use the pre-approved corbel documents, and we are coming close to the end of the year, unfortunetly it’s going to be close to impossible for us to get all of our restatements done and signed by 12/31/2009.

If we start using an effective date of 1/1/2010 we know that we have only until 4/30/2010 to have those documents signed unlike having till the end of the year for our 1/1/2009 documents, but what other disadvantages would there be for not having all our restatements done by the end of this year?

Is it true that we still have to have the PPA amendment signed by 12/31/2009, we are currently sending them out with our restatements?

Client's compensation is $200,000 per year

Contributes $100,000 to DB plan.

How much can she add to SEP IRA?

Thanks

Also posted in Defined Benefit forum

Client's compensation is $200,000 per year

Contributes $100,000 to DB plan.

How much can she add to SEP IRA?

Thanks

I have not received an acknowledgement in response to the last 2 reasonable cause letters sent to the IRS. The next thing the client / taxfiler received was a penalty notice. Anyone having similar experiences or know a possible reason that I am not getting responses to my RC letters?

This CB plan was effective 1/1/2004 so the 3-year cliff vesting requirement must be effective for plan years commencing 1/1/2008 and forward. Does this apply to only accruals from 1/1/2008 going forward? And the accrued benefit through 12/31/2007 remains on the old schedule? For example, an employee is hired 1/1/2005. The plan originally had a 6 year graded schedule. At 1/1/2009 would he be 60% vested (2005, 2006, 2007, and 2008)? Or would he be 100% vested in the entire benefit because he now has 4 years of vesting service? Or is he 60% vested in his benefit through 12/31/2008 and 0% vested for the benefit he accrued during 2008?

Does anyone know where I might find a checklist showing effective dates for changes in qualification requirements for a DC plan since 1985?

Is a church with a 403(b)(7) plan exempt from the IRS's written plan requirement?

I've been reading through several posts dealing with this subject and keep confusing myself.

I have a new ASG that popped up in 2009. A doctor (who has a safe harbor 401(k) plan where he is the sole HCE and 4 NHCEs) purchased a 20% interest in an outpatient surgery center during the year. The surgery center has a standard 401(k) plan with 20 NHCEs and no HCEs. They do not match, but make discretionary profit-sharing contributions of between 3% and 4% of comp. each year.

The surgery center's plan would satisfy coverage on its own automatically since it has no HCEs.

The doctor's plan, though, is only covering 4 of the 24 combined NHCEs for a 16.67% ratio.

Therefore, I would need to aggregate the plans for coverage and nondiscrimination testing, meaning my safe harbor is blown because I can't aggregate safe harbor and non-safe harbor 401(k) plans. Does this mean I need to encourage the surgery center to adopt a safe harbor 401(k) plan or simply run a combined ADP test for the two entities or have I missed something???

Thanks.

James

J&S liability is determined as of the date of withdrawal. What happens if member of controlled group liquidates and distributes assets to shareholders before plan demands payment? Is there a constructive trust imposed on liquidation proceeds?

I know that a QACA/EACA cannot be added to an exitsing 401(k) during the plan year. My question is can an "unwind" feature be added to an existing QACA/EACA during the year?

Any thoughts are greatly appreciated.