We have a Corbel SUngard plan document for a pension client where such document includes a resolution to adopt the plan. The plan also had a tack on amendment (and separate resolution) to reflect changes due to EGTRRA, PFEA and Rev Rul 2001-62, which also was provided with the plan. And subsequently we added another amendment to adopt the 415 regulations, along with yet another resolution for that amendment.

All the above materials are provided by the Corbel system.

We are now in the process of preparing a plan restatement that Corbel provides that allows for the plan to be amended to include an automatic annual plan freeze provision, where the plan can be unfrozen at any time to provide accruals and then automatically frozen again at the end of such year.

The question is regarding document logistics.

I expect to provide the newly restated plan with a resolution, along with the tack on amendments for the 415 final regulations (and separate resolution) and the EGTRRA (et. al stated before) amendment with separate resolution. And if it is appropriaate I will add yet another tack-on amendment (and separate resolution) which is for PPA.

Does anyone have comments regarding the appropriateness of the above approach? Of coourse I could consider preparing one resolution that applies to the restatement and all tack-on amendments.

Thanks.

I have a Plan Document that was Amended and Restated as of 1/1/2006.

The vesting on the ER Match and Profit Sharing Contribution was a 7 Year Graded Vesting Schedule.

When was the Plan required to go to a 6 year graded Vesting Schedule?

Took this on 6/26-Passed

Many QDRO questions, lots of 415 limit, 2 questions on calculating future balance in Cash Balance plan. Relatively few math questions.

Test needs a GOOD spell check and grammar check!

The client has not funded their 2007 non-elective SH contribution. If we run the ADP testing the test fails and the owner will get a refund of $14,000.

I understand we need to contribute the 3% SHNEL ($20,000) with earnings. Do we also need to run the ADP testing and process the refund, pay the excise tax on the late withdrawal?

Do we have to fund the SHNEL plus a QNEC? If a QNEC is required, would that be calculated under a scenario for late correction of ADP/ACP testing (with refund of the HCE’s deferral, as described in EPCRS), or would it be the QNEC that would have been required to bring the NHCE’s to high enough percentages to pass ADP testing without refunds?

This seems to be a bit of a grey area and not specifically addressed in EPCRS. Any help would be appreciated.

Thanks,

401(k) Plan has match formula of 100% of deferrals up to 1% of compensation with last day and 1,000 hour requirement and allocated on the last day of the plan year.

Owner wants to suspend match August 1, 2009 and pay match through July 31, 2009.

Based on the discontinuence of safe harbor match contribution guidance I believe it is ok to use compensation and deferrals up to July 31, 2009 to determine the match but how would you deal with the last day, 1,000 hour requirement:

1. Allocate the match to those employed on 12/31/09 with 1,000 hours using comp through 7/31/09 OR

2. Allocate the match to those employed on 7/31/09 with 583 hours using comp through 7/31/09.

Any thoughts on the above options or different ideas would be appreciated.

Thanks

Medical practice has a 401(k) plan.

The plan operates on a calendar year basis.

One physician retired as of 6/30 but will be receiving payments based on A/R receipts for 18 months.

Plan defines compensation as 3401(a) comp.

A/R payments are included in the physicians' W-2 income.

Should the plan continue to treat the A/R payments as compensation for this physician under the plan even though he is no longer working?

Thanks!

Does anyone know of any other companies BESIDES Newkirk that produce either generic or customized 401k enrollment materials? Thanks in advance.

An employer has two plans. Neither is exclusively a union plan.

One covers employees out in the field and the other is for office employees.

The plan that covers field employees is a safe harbor matching plan. The office plan is not a safe harbor plan and has a discretionary match and profit sharing plan. The office plan has most, if not all the HCEs in it, but nonetheless, the field plan has a couple of HCEs.

Other than passing coverage testing separately, does anyone see a prohibition against this sponsor providing for a safe harbor arrangement in one plan and testing the other under ADP/ACP rules?

Thanks in advance for any feedback.

I have an auditor of a pension plan asking me if there is any regulation (specifically DOL) that requires the Plan to maintain supporting documentation for employees who are eligible but elect to defer nothing out of their pay check. I've looked and can't find a regulation...has anyone here come across a regulation like this?

I guess I always thought that it was just "best practices" that the Plan Sponsor should try to maintain these forms so that they have themselves covered in case a participant comes back and tries to say they did want something taken out of their pay they have a signed document that "proves" they elected "$0".

Any help would be appreciated.

I have a daily valued 401k Plan and we're making some changes to the investment lineup. Removing a couple funds and mapping to like funds. Is there a 30 day notice requirement? I can get a communication out to employees very shortly but it won't be 30 days- more like 20 days. There will be no blackout. Please advise- thx in advance.

Hi,

I am trying to straighten out when the participant statements are due to them per the PPA...

For 'pooled' or non-participant directed, plans that have valuations once per year, when are the statements due ? What about semi annual valuations ?

For plans that have individual accounts, such as smith barney, and the participants receive monthly statements, however, the valuation is only done at year end, when are statements due ?

For those plans that have online recordkeeping, I believe that since they are receiving yearly vesting data that they provide them quarterly..

For plans that have quarterly valuations, I believe that they have 45 days after the quarter end, is this correct?

I remember reading an article that originally yearly valuations also had 45 days but that was extended... however, I cant find the article again....

The participant statement and PPA notice (with vesting info and such) are one in the same for the due dates...correct?

Any help would be greatly apprectiated

Thanks!

J

Company A will soon go public. Some of the executives will be allowed a number of shares proportional to their annual production, other factors and the balances in their 401k plans. The plan allows for in-service transfers and several qualifying executives have taken them. Is there any prohibition of the firm considering the in-service transfer balances as part of said employees' 401k accounts for the purpose of allocating the shares among the various executives? It is assumed that all in-service balances were recently transferred and that no comingling with other rollover monies has taken place.

Need to distribute Roth dollars for ADP corrective distribution. Will be distributed beyond the 2 1/2 month deadline. Have always withheld 10% federal for these. Is this required? Not sure if there were any changes to this when the rules changed to be taxable in the year distributed for distributions made prior to the 2 1/2 months.

Can I use the SHNECs (which are QNEC's) in the ADP test?

I know I need to include it for the HCE's too, but in some cases, it might help...

Is an in-service distribution of employer contributions subject to a 10% penalty if it's before 59-1/2?

An employer has a 401k plan in place right not. They want to change investments and will do so. However, some of the employees do not want their existing money to go to the new investment platform. The employer would like to give them the option of taking their money out of the plan or moving it to the new investments. Because there is not a distributable event, this will not work.

So another option that was presented was to start a second 401k plan. Terminate the first plan, start the second plan with identical provisions to the first plan. Now there is a distributable event so the participants can roll their money into the second plan or take it in cash or roll to an IRA. Thats what they want, but I know this won't work, just not sure why. Anything I can point to prove this won't work?

Another option that I'm not sure about. What if they freeze instead of terminate the first plan, and start the second plan. but the second plan is written to not allow for transfers into it. Does that open up options on what to do with the money in the first plan?

Thanks for any comments

PTE 92-6 allows for the sale of a plan's insurance policy to the participant covered by the policy as long as certain conditions are met. One of those conditions is that "the contract would, but for the sale, be surrendered by the plan". I'm not sure I understand what that means. Any thoughts on what the DOL might be getting at here? Thanks.

If a 401k plan specifies in its adoption agreement that it is safe harbored and the employer will make the match, but then did not give the annual safe harbor notice before the 2005 plan year began, is the matching contribution required for 2005?

The ADP/ACP tests would apply because there was no safe harbor notice.

But does the plan also have to make the safe harbor match specified in the adoption agreement?

Does the employer have to make a contribution equal to 50% of 3% (or actual ADP) and then the match to correct for 2005? The 50% employer contribution is what EPCRS currently calls for if the employee had no effective opportunity to make elective deferrals. Does not notifying employees of the safe harbor match deprive employees of an effective opportunity to make deferrals (or more deferrals) to then be entitled to the match? The employees nevertheless could make elective deferrals even without the safe harbor notice.

Revenue Procedure 2008-50 asks for comments about how EPCRS ought to be modified in the future to add a correction for such a failure. The IRS is auditing this particular situation and the agent asserting that 50% employer contribution by analogy and requiring it in addition to the safe harbor match in order to avoid disqualification of the plan.

What experience has anyone had with other IRS auditors dealing with this type of situation?

Thanks for any information or suggestions you make.

A client currently maintains a 401(k) plan. Because of the changes in the Roth IRA rules for next year, many of the partners and other HCEs would like to take a distribution and roll over to a Roth IRA. I advised that distribution can only occur if the plan is terminated, and then they cannot establish a new plan for 12 months. The partners/HCEs would be okay with that, but they don't want the NHCEs to go without a plan.

What if we spin-off the NHCEs to a new plan that excludes HCEs, and then terminate the original plan and distribute benefits to the HCEs. Does this work under the successor plan rules? The new plan is a successor plan with respect to the NHCEs, but is it a successor plan with respect to the HCEs who aren't eligible.

I have a client who is one of three persons in an S corporation owning a farming operation. They have no employees and approximately 4 independent contractors. Client wants a ball park estimate of what it might cost to set up a DB plan for the business. I have no experience in setting up DB's and deem them to be more complex than DC plans. Can anyone venture a ball park range for setting up a DB plan based on the sparse info provided above? Thanks for any help.