My client funds employer benefits in a pooled account. 401(k) contributions are deposited to individually directed accounts with quarterly statements. I have been providing an Annual Statement with vesting, and a quarterly notice of multiple statements and PPA quarterly notice.

My question is, under PPA, how often am I required to value the pooled account? Currently, I have been valuing it annually.

Would someone kindly explain what the last item (no facility closing event/.........) in bold means? This is the waiver section for Form 10 for an active participant reduction.

What does this mean for an employer that is not in manufacturing and operates in one location? What about the same in several locations (a service employer). What about a manufacturing company with two locations?

Thanks for any help. I don't get this.

Reporting Waivers - Reporting of this event is waived if:

Small plan: The plan has fewer than 100 participants at the beginning of either the current or the previous plan year; or

Funding-based waivers: For the event year:

- No variable rate premium (see Part IV.B);

- Less than $1 million in unfunded vested benefits (see Part IV.C); or

- No facility closing event/80% funded: The plan is at least 80% funded for vested benefits (see Part IV.D) and the active participant reduction would not be reportable if only those participant reductions resulting from cessation of operations at one or more facilities were taken into account.

The May-June 2003 ASPA Journal contained an article pertaining to Davis-Bacon plans that stated "Davis-Bacon amounts can offset any other allocation that may be provided under the plan provided they are not restricted by the annualization rules." An example involving a 10% money purchase plan is provided. This example is also cited by the ERISA Outline Book. However, I can find no authority or reference source that provides for this. Please help.

My client was just asked by their CPA to obtain an engagement letter as the TPA for the plan. The client was also told this is a "requirement".

I have been in business for over 25 years and have used an engagement letter once in that time. I have found that most clients will not sign.

My engagement is getting my fee up front. If there is a requirement to do a retainer/engagement letter, who is requiring??

Can I, as the Enrolled Actuary, choose to keep the prefunding balance at $0, simply by entering $0 in line 11d of the Schedule SB? Thus avoiding the need for a sponsor election.

I'm trying to determine whether the failure to make a distribution is eligible for correction under 2008-113. I'm looking at Section V.D(2)(a) in particular, which allows a correction of "an amount that should not have been deferred compensation under the plan" that is "otherwise treated as defered compensation under the plan and such excess amount otherwise would have been paid to the servive provider during the service provider's taxable year in which the excess amount was...otherwise treated as defered comepnsaiton under the plan".

It appears that this Section was drafted for deferrals that exceeded the participant's deferral election. It does not specifically reference amounts that should have been distributed. However, an amount that should have been distributed under the plan but wasn't certainly "should not have been deferred compensation under the plan" for the remainder of that tax year. In addition, the amount was "otherwise treated as deferred compensation under the plan." Am I reaching too far on this interpretation?

Once the income restrictions fall away, what would discourage an IRA holder from converting his big $ IRAs to Roth IRAs? Other than the obvious requirement that he pay the tax liabilitly and the fact that he's 75+ so is rolling the dice on how much income he can generate and then shelter ... why not? Based on the Washington Follies, there is no way taxes will be going down any further in his lifetime, likely mine, and probably my kids'. (whoops, is my bias showing?) What do you think?

We have a client who sponsors a 403(b) plan with over 100 active and former participants. They have some questions regarding the new regulations for Form 5500 reporting for the 2009 Plan year. I have read the Field Assistance Bulletin No. 2009-2 regarding transitional relief for annual reporting and still don't have a clear answer to their question.

403(b) plan has annuity contracts of former participants. It seems that these former participants would fall under the transitional relief because

1) The contract was issued prior to 01/01/2009

2) There were no obligations to make any additional contributions to the contracts prior to 01/01/2009

3) The employer no longer hand any involvement regarding the rights and benefits under the contracts

4) The employees were fully vested

So the question is, can we segregate these former participants from the participant counts, which will in turn drop their participant count below 100 and relieve them from the independent audit requirement?

Hoping one of you has some insight.

I just ran across a plan that has profit share using the "super-integrated allocation formula." It is a 2 step formula, giving the following:

Level One: At least 8% given to eligible participant's compensation not in excess of $65,000.

Level Two: Any remaining contributions will be given to eligible participant's compensation in excess of $65,000.

I was told that the client has provided in years past a 25% contribution for the 2nd level, and for the 2008 plan year they amended the $65k to $100k.

Does the formula breach any contribution rules?

I have a plan that is not passing coverage with either the ration % or ABT. A colleague insists that you can restructure the plan into component plans to pass 410(b) testing for the 401(k) and 401(m) portions of the plan, as long as you test the plan as a whole for ADP/ACP. I don't believe this is possible. My basis for this position is Treas Reg 1.401(k)-1(b)(4) which indicates plans cannot be restructured to satisfy 401(k) testing and that the testing method used for satisfying 410(b) must be consistent with the method used to satisfy 401(k). Who's correct?

If an employee has an outstatnding loan when they separate from service and then are rehired 45 days later, can they continue making payments on the loan and avoid it going into default?

My wife is a participant in a PSP (no 401k provision) and a DB plan maintained by a mid-size physicians practice. She has separated from employment there after over 9 yrs of service. The Trustees terminated the DB plan a/o 12/31/08.

There are 18 participants in the DB plan and a/o 12/31/07 it had about $750,000. Though she is an RN who had relatively high compensation within the group, we are being told her lump-sum benefit is only around $9,000.

Assuming both plans are top-heavy a/o 12/31/07 and 12/31/08, what could the employer do within the PSP to preclude top heavy benefits in the DB plan from kicking in?

The Plans' putz attorney has advised that top-heavy DB benefits are not applicable b/c the PSP "provides top-heavy benefits." Zero PSP contribution was made for '08 and the '07 and prior contributions were all compensation-based. The PSP has a 5 yr vesting sched, 20% per yr.

We are having a very difficult time collecting benefits from the DB plan (in part because we caught the Trustees' error in failing to notify participants of an intended benefits freeze for 2008 - now they evidently have to re-do the 2008 valuation and appear reluctant to absorb the addl cost.)

Sorry for the complexity but the Trustees have turned me over to an attorney who doesn't understand ERISA and I can't afford heavy-duty legal fees to sort this out. Is it true that the Trustees don't have to disclose results of top-heavy testing to a participant who makes a formal request?

Maybe I should just turn this over to EBSA for investigation - does anyone have an opinion on whether EBSA would take something like this seriously?? Thanks for any feedback, all the best for success!

Our office has been very reluctant to increase what it charges for administration post-PPA. It would be helpful to me for future discussions if any people in other offices would share with me what they are billing, relatively, for their PPA administration. After PPA how much did you increase your annual administration charges for plans with 1, 10, 100, and 500 lives? Thanks.

I have an auditor coming in tomorrow for a routine audit on a 401(k) plan. We were able to get the audit location switched from the client's office to ours (for convenience and also to lessen costs for the client - if I have to sit around for 1-2 days at their office, costs would be dramatically higher).

My question is this: from talking to other people in our office, this auditor is a bit of a strange duck. We had him located in a spare office the last time, and the next door person sweared she heard him opening and closing file cabinets in the office, looking at other clients' files. Know this isn't the bad old days (we had one auditor in the late 80s using our phones blatantly to talk to his bookie, and he wasn't even subtle about it), but what gives this guy the right to basically spy on our other clients? I can somewhat understand them looking around the client's office (they are after all being audited), but WTF?

Does anyone have any experience or know of case law where an intended DB contribution went to the wrong place? I have a situation presented by a colleague where a terminating DB plan paid out the assets. The owner's amount was short, so they funded the contribution to make up his shortfall many months later, but by the due date of the tax return for the year of termination. The problem is that the plan account was closed at the time of final funding, so instead of making the contribution to the plan, it was made directly to his IRA.

Now the plan's under audit and my colleague wants to find a way to get this straightened out.

A spouse beneficiary refuses to accept his deceased spouse's benefit under a pension plan. Can we simply send him distribution forms by certified mail and note in the participant's file that the spouse refused the benefits? Do we continue to accure benefits and pay her PBGC premium? Unusual sitution in this day and age...

Plan provides that an employee shall be eligible to participate on the 6-month anniversary of the employment commencement date or the reemployment commencement date, as applicable, provided he has completed one hour of service and is employed on such 6-month anniversary date. I interpret this to mean that if a person quits before the 6-month anniversary date and is rehired thereafter, the 6-month period begins to run again, even though the individual previously performed the one hour of service that was required to become eligible. I am assuming that the intent was to use the hours of service method of counting service (with a 6-month eligibility computation period and one hour of service requirement). Is this allowed under the law? Can a rehired employee be required to start over earning 6-months of service when he/she already earned the required one hour of service during his previous period of employment? My general understanding was that a rehired employee who had performed the hours of service required (one hour, in this case) prior to termination of employment would become a participant on the rehire date (assuming the rehire date falls after the 6-month anniversary) because the employee does not have to be employed at the end of the six months to get credit for the hours worked during such 6-month period. Reg. 2530.200b-1(b) provides in relevant part

In general, employment at the beginning or the end of an appliable computation period or on any particular date during the computation period is not determinative of whether the employee is credited with a year of service...for the computation period. Rather, these determinations generally must be made solely with reference to the number of hours...which are credited to the employee during the applicable computation period.

However, Reg. 2530.200b-1(b) also provides the following:

It should be noted, however, that in certain circumstances, a plan may provide that certain consequences follow from an employee's failure to be employed on a particular date. For example, under section 202(a)(4) of the Act and secton 410(a)(4) of the Code, a plan may provide that an individual otherwise entitled to commence participation in the plan on a specified date does not commence participation on that date if he or she was separated from the service before that date.

Does this provision of the Reg. mean that the plan can start over counting the 6 months of service for a rehire because the plan provides that the individual must be employed on the 6-month anniversary date in order to become eligible to participate?

Alternatively, perhaps in this case the plan document can be more restrictive about counting hours of service prior to a termination of employment since the plan provides more liberal eligibility provisions than the mimimum service requirements (i.e., only 1 hour of service in 6 months rather than 1000 hours of service in 12 months). Thoughts?

I have a non-profit who has only ever filed an "informational" return, which is to say the 5500 with just basic information and no schedules. They received an IRS letter that their 2006 return was not received. Is an entity filing in this manner eligible for the DFVCP? Also, is an entity filing in this manner now required to file a more detailed return in 2009 and going forward? Any help would be appreciated.

We have historically filed separate Form 5500s for separate investment options (funds) that are used in our various defined benefit and defined contribution plans. However, in preparing this year's 5500, I noticed that some of the funds contain a unitized investment in a portfolio that is shared between multiple funds and I am concerned that this may be treated appropriately.

My question is a follows:

Is it appropriate to prepare separate 5500s only at the unitized fund level or alternatively at the unitized investment manager level?

Attached is an excerpt from page 11 of the 2008 Form 5500 instructions. I have read this several times, but the treatment seems unclear.

The assets of a master trust are considered for reporting purposes to be held in one or more ‘‘investment accounts.’’ A ‘‘master trust investment account’’ may consist of a pool of assets or a single asset. Each pool of assets held in a master

trust must be treated as a separate MTIA if each plan that has an interest in the pool has the same fractional interest in each asset in the pool as its fractional interest in the pool, and if each such plan may not dispose of its interest in any asset in the pool without disposing of its interest in the pool. A master trust may also contain assets that are not held in such a pool. Each such asset must be treated as a separate MTIA.

Any help or clarification related to this issue will be greatly appreciated.

Vanguard has been administering a money purchase plan for one of our clients. Client got a notice from Vanguard that they aren't doing small plans any more and referred them to a company called ExpertPlan.

Does anyone have experience working with ExpertPlan or know anything about them?

Thanks!