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.

I know this doesn't come up too often (at least not in our office), but we were having a discussion on it. so tell me what you think:

Participant A turns 55 in 2009 and terminates on 12/1/2009. She requests a lump sum distribution. Should her code be a 2 and does she get a 10% early w/d penalty?

Participant B turns 55 in 2009 and terminated on 12/1/2007. He also requests a lump sum distribution. Should his code be a 2 and does he get s 10% early w/d penalty?

Our opinion of the instructions would be yes & no for A, no & yes for B, with his code being a 1.

Thoughts?

Hi! Our firm administers a PS plan whose document states distributions will occur upon close of plan year coincident with or next following date of term, however over each of the past 3 years, we've inadvertently distributed a participant immediately upon termination. (There were roughly 10 distributions per year that occurred correctly.) Each mistake happened unintentionally, probably because of a "squeaky wheel".

Is this a disqualifying event? We've been tagged for audit and are trying to determine if there is any type of self-correction method - or if it's too late.

TIA!

Annie :-)

I think that a lot of us on this board do DB/DC combined plan cross-testing. Everyone should be aware that HR 4126 has been introduced. The bill would prohibit cross-testing of benefits and contributions. There is a post on the Cross-Tested Plans board and an ASPPA ASAP on the topic was published on 11/30/09. The bill has been introduced to the Ways and Means Committee. Please support the effort against this bill. If you live or work in a state with a Ways and Means member please contact them and tell them about the harm that would come from this proposal.

I have a 30 life DB plan. In 2008 and in 2009, two participants who reached NRA one in each year, elected to take their benefits in the form of a life annuity pension. Now in 2010, they are going to terminate the entire plan. Does the trustee have to purchase an annuity for the two participants already receiving benefits to keep the life pension going that they selected or can he just offer them the "remaining" PVAB as a lump sum?

Thanks .... you guys are the best !

On some of the plans where we have recently applied online for a trust ID number, we are receiving IRS correspondence requesting the filing of a form 1041 - which obviously doesn't apply on a qualified plan trust.

Does anyone know what on the online applicaton is triggering that, and how we might complete it differently to avoid this?

Thanks!

Dog

Can you use the cash accumulative in the insurance policy in a 412(e) plan to pay the premium for the insurance?

Do you have to make the annuity premium since there is not a minimum funding requirement?

The plan wants to terminate and rollover the funds to a profit sharing plan - but does not want to make the contribution for 2009 for the annuity and use the cash in the insurance policy to pay the premium for the insurance so it will not lapse.

This is an owner only plan (1 participant) - can they do this?

Can a 412(e) plan be frozen as long as the insurance doesnt lapse? They want to keep the life insurance going because of the surrender charges. How does this effect their benefit?

Thanks