An ERISA-governed 401(k) retirement plan provides participant-directed investment, and is meant to meet the conditions for ERISA 404© relief. The plan's sponsor and administrator would prefer to provide in the plan and its written investment-direction procedures (and describe in the summary plan description) that a participant, beneficiary, or alternate payee may give his or her investment direction only by computer or telephone, and not by paper. Allowed? Is a rule against paper consistent with the ERISA 404© condition that a participant must have an opportunity to give his or her investment instruction? Does anything else in ERISA make this no-paper rule impossible or impractical? (For clarity, the plan administrator understands that disclosures to a participant must allow a paper option, but is asking rather about whether plan procedures may restrict the form in which a participant renders his or her investment direction to the plan.)

Does anybody have a "sample" claims procedure or know where I might be able to find some good language? I have to update a large number of H&W SPDs and I know the old claims language is inadequate.

Thanks again and have a great day!

Client has a plan year ending 12/31/08 and has now elected to make a discretionary match to the plan. Based on the amount the client wishes to contribute, the ACP test is projected to fail.

Can the allocation of ER Match be reduced for the HCEs that would be scheduled to receive a refund of excess aggregate contributions, thus avoiding the 10% penalty and the return of the excess contribution to the participant? I'm getting two different opinions on this matter. Thanks.

When applying the 401(a) & 410(b) test to a Hybrid 401K/Cash Balance Plan do you; 1) include the Hypothetical Cash Balance Allocation in the total allocation/contribution as a basis for determining the Benefits as a % of Comp for the purpose of establishing rate groups?; and 2) Do you include the same Hypothetical Cash Balance Allocation in the calculations for the Average Benefits Test?

One man Plan. Terminated March 2008. Assets were distributed March 2009. Will file a 5500-EZ and prepare Schedule SB for 2008, and a 5500-EZ for 2009. Does a Schedule SB need to be prepared for 2009?

I have a small DB plan where the benefits were frozen in 2007. There are no more benefit accruals, but there are still life insurance premiums to be paid.

For the plan year starting in 2008, is the TNC equal to $0, or is it equal to the term cost of the insurance?

If we change our eligiblity requirements for a self-funded health plan to be from "normally works 24 hours" to normally works "32" hours - is that a qualifying event for COBRA for the employees who lose coverage as they no longer have the requiste number of hours? I don't see how it is but want to be sure. DOes anyone see an issue with this assuming this doesn't discriminate in favor of the HCEs.

thanks

We took over a db plan with 4 attys (partners)and 10 staff.

partners assumed they would each get what they put into plan when they left.

we told them dbs dont work that way;especially after assets have been lowered by market "downturn"

Besides a cash balance plan;does anyone see "outside agreements" that partnership agreement puts in to "equalize" these inequities?

We are TPA for Company D and this the scenario:

Company D was acquired by company E and is now considered a legal entity of E.

D had a 401(k) plan before being aquired.

After the merger, participants of D's plan make contributions to E's plan.

D is currently operating as D, Inc. a division of E, Inc. sending out invoices and paying vendors and paying employees as D.

The merger happened almost a year ago and participant's are wondering if they can take their money out of D's plan. Are there general rules regarding this, or would something be stated in E's document? E has not contacted us regarding D's plan.

We have not had to deal with anything like this in the past. Any thoughts would be appreciated.

Does anyone use the Lincoln National Life prototype document? We are looking at a takeover client and the SPD states participants must work 1000 hours in a six month period to be eligible. We were wondering if the 1000 hours and six months was an option which was hard coded into the document or if the document utilized blank lines to fill in the hour and month requirements.

We usually prorate the 1000 hour requirement with additional language stating if the participant works 1000 hours during any eligibility computation period they are eligible to enter the plan to avoid any IRS challenge regarding discrimination. However, I cannot find any documentation which states requiring 1000 hours in a period of less than 1000 hours is not allowed. Does anyone know where I might find some documentation?

Assume small TPA firm has services agreement with small 401k safe harbor plan to provide compliance testing, calculate contributions, and process 5500. Plan sponsor advises TPA that Plan Sponsor is undergoing bankruptcy. 2007 completed services, have not been paid for. 2008 5500 coming due soon (7/31/09).

Relationship is good, no acrimony, and amount of past due invoice immaterial to TPA's practice and TPA willing to just let it go in order to not spend time trying to collect.

TPA wishes to terminate agreement to provide services so as not have to complete 2008 work (eg knows won't be paid).

Service agreement doesn't cover specific time periods and says that written notice may be provied by either party to terminate. Service agreement doesn't specifically state how much advance notice must be given. If notice were given now (eg May 2009) that services are terminated and the written notice states that the 2008 services will not be performed, does this alleviate the TPA from having to complete the 2008 work.

I know technically this is a request for a legal opinion that but that is not what I am really after. I am more or less curious if others have run into this issue and how they have handled from a timing standpoint in terms of what is "reasonable notice."

Thank you for any assistance.

I have a client (files the Schedule I) that has it assets held with a collective trust (CCT). My question is do they need to file a Schedule D for 2008 (more than 25 participants in the Plan)? Everything I read about the Schedule D is conflicting on where or not it needs to be files for a small plan and CCT.

Company A is the parent of Company B. Both A and B operate in similar segments of the same industry. They each have collective bargaining agreements with the same union. However, each collective bargaining agreement provides for contributions to a different pension fund. Company B wishes to transfer a substantial number of employees from its payroll to Company A's payroll where the CBA provides for substantially lower contributions to that penson fund (there's no 70% issue here). Company B will continue to be liable to make contributions under its CBA for the remaining employees. Is there a partial withdrawal under Sec 4205 (b)(2), including the PPA "contract out" amendment?

Company B is trying to shift employees from the higher contribution CBA/pension fund to the lower CBA/pension fund. Both Funds have substantial withdrawal liabilities.

Comments would be appreciated.

RHB401

I have an employer who sold "all or substantially all" of its assets in an arm's length transaction to an unrelated 3rd party that would qualify for ERISA 4225(a) provisions on limiting withdrawal liability (WL) based on a percentage of the liquidation/dissolution value of the employer after the sale.

Unfortunately, the real estate on which the business was operated was included in the employer's assets and sold at the same time. If the proceeds of the real estate are included, ERISA 4225(a)(2) doesn't cause the WL to decrease. I have been trying to find justification for excluding the real estate (arguing that WL should be based solely on the business' operating assets) without luck. Has anyone heard of this argument being made (ideally, successfully)?

Does anyone know what the status of church plan documents will be under the new 403b prototype program? For church plans under Code Section 3121 and QCCO's, it appears they cannot use the proposed prototype document. And what if the plan is funded using with a 403(b)(9) Retirement Income Account where a plan document IS required? What document should they use? Will all Church plans need to use custom attorney drafted documents?

Thanks

Company has a SIMPLE IRA-DFI using IRS document 5305. They now (i.e. asap) want to allow employees to invest anywhere. So naturally, they should “amend” their SIMPLE to a SIMPLE IRA-Non-DFI using the other IRS document (5304).

But the IRA Answer Book (13th Ed., Q12-24) says that an employer can only amend their SIMPLE IRA at the start of a calendar year. So…

If an employer keeps all plan provisions identical (e.g. eligibility, etc. ), can the employer move from a SIMPLE-DFI to a SIMPLE-Non-DFI document mid-year?

Or would this be considered a plan amendment and so must wait until January 1?

Thanks for the help.

Steve

Have several related??? companies

A Owned by Mr. G

B Owned by Mr. G(90%) Mr. T (10%)

C Owned by Mr. G 78% Mr. T 22%

D Owned by Mr. G 26% Mr X 74% but contains all the employees for C (Leased Employees who were originally employees of C but a separate company was set up due to some tax reason)

Controlled Groups for testing?

A and B

B and C

How is D handled? Does this fit under affiliated service group rules?

Because not are all in the same controlled group - then this would not fit under a prototype doc, am I correct?

Thanks for any input

PF

Brain cramp: too much painting, yard work and running around with the kids this weekend....

I have two people over 50 who put away $20,500 (calendar year plan)); one is an HCE, the other isn't.

Can I use $15,500 for the HCE and the full $20,500 for the NHCE in the ADP test?

I am trying to complete a 5500-EZ. Question 10(g) asks for amounts received by the plan other than from contributions. I've read the instructions and know that rollovers, transfers and net income go on this line. It says not include unrealized gains or losses. Am I correct in assuming the interest and dividends are reported on line 10(g)? And where would the unrealized gains and losses be reported?

I am accustomed to a Form 5500, Schedule I, in which you can take the BOY and add in the contributions, unrealized, etc. and it balances with the amount of the assets at the EOY. Does the 5500-EZ not work this way?

Thank you in advance for the assistance.

A Form 5310 was filed for a DB plan with a plan termination date of Feb 29, 2008. Normal retirement Age is 58 (or 5 years if later). Plan Year end 12/31.

The IRS reviewer asks:

"Please demonstrate that the plan's definition of normal retirement age satisfies Regulation 1.401(a)-1(b)(2). Or, alternatively, amend the plan's definition of normal retirement age."

We understand that under 1.401(a)-1(b)(2), the Normal retirement age must not be earlier than the earliest age that is reasonably representative of the typical retirement age for the industry. But, (iii) states that in the case of a normal retirement age that is not earlier than age 55 and is earlier than age 62, whether the age is not earlier than the earliest age that is reasonably representative of the typical retirement age for the industry is based on all of the relevant facts and circumstances.

Does anyone have insight regarding what the IRS will consider in this "relevant facts and circumstances".

The employer is a PC that does dermatology work.

Alternatively, if we amend the plan now to have the NRA become 62 with an unreduced ERB at age 58, would that cause the IRS to invalidate any prior actuarial valuations that calculated the plan's contributions?

Not sure what to do with this one - any comments appreciated.