I have a plan that has a few individuals that terminated in 2006 or 2007. We forced these participants out in 2008.

In several cases they were not employed when we paid them out but were rehired later in the year. Do I need to add these distributions back into my top heavy test since they had hours of service in 2008?

In several other cases we believed the individuals that terminated in 2006 or 2007 were not employed when we forced them out. We learned in March 2009 that they had actually been rehired before 12/31/2007. We weren't notified that they had been rehired until March 2009 during the census gathering process. The client did not report these individuals during the 2007 testing process. In these cases, their accounts should not have been forced out. I believe we need to request that they return the distributed assets? I believe that these distributions should not be added back in as they were paid out in error.

Thanks for your responses.

Easy quick question, is there a list some where of all special enrollment events to allow individuals to be added to the plan. I looked on the DOL website, but didn't find a list. I am looking for the effective date when a student can enroll in the plan (Beginning of the semester when they become full time again or wait to open enrollment?)

I do not normally work on form 5500 for welfare plans. one plan I am looking at has a participant count on the form 5500 page of 1000 as taken from the info by the provider. The other Sched A info given us by the provider says: Approximate number of persons covered at end of policy or contract year and lists 1800. I assume the difference is that family members are included. I was thinking to use that number on the Sched A but when I looked at prior yrs forms done by another consultant, I note that he used the same number from the first form, 1000. I'm not sure which is correct then for Sched A.

A safe harbor 401k plan had a 6 month 401(k) eligibility provision, but incorrectly applied a 2 year eligibility period on participants from getting the safe harbor contribution. They want to go back now and deposit safe harbor contributions for everyone they missed during these affected plan years. They would include lost earnings on these contributions correct?

Can someone tell me who i should report on this line?

The instructions read "Include any individual who terminated employment during this plan year, whether or not he or she (a) incurred a break in service, (b) received an irrevocable commitment from an insurance company to pay all the benefits to which he or she is entitled under the plan, and/or © received a cash distribution or deemed cash distribution of his or her nonforfeitable accrued benefit. Multiemployer plans and multiple-employer plans that are collectively bargained do not have to complete line 7h."

Do I include anyone who terminated in 2008 and is not 100% vested? What if they were paid out also in 2008, do I include them?

Any guidance is greatly appreciated.

My firm is considering adding the Roth 401(k) feature for our clients while doing restatements. We handle both the admin work and the investments too. Investments are in individual stocks/bonds and we work under pooled accounting, allocating gains and losses across all participants in one master account. I'm trying to figure out if we can use this same method for Roth deferrals. The treasury regs refer to "separate accounting of contributions, gains, and losses".

To me, this sounds like we could continue to use pooled accounting. However, I've also found an IRS publication which states "A separate account must be estabilshed for each participant making designated Roth contributions". This makes it sound like pooled accounting would not be acceptable.

Anyone dealt with this issue and/or have any input? Thanks in advance.

Chris

Participant took a hardship withdrawal in 2008. The plan administrator forgot to stop the deferrals for 6 months.

What is the correction method for this?

I know the deferrals need to come out of the plan in 2009. How is he taxed? Is it taxed for 2009?

Does the excess deferrals get forfeited and the plan sponsor makes him whole outside of the plan?

Does he have to amend taxes for 2008 and the company amend taxes for 2008?

Is there a self correction method?

Are there penalties?

What about the match- does that get forfeited?

Does the money come out with interest? There probably was a loss on the amounts because of the economy.

Plan deposited deferrals late and wishes to correct by providing interest and filing Form 5330. A "VFCP Filing" is not desired. I understand there is also a notice that needs to be distributed to members discussing the late deferrals and related correction. Is there available any guidance on the content of that notice? Thanks.

We currently have an Employer who has paid a generous match of 150% on the dollar up to 5% for years. The Employer has definitely been affected by the economy and can no longer afford this contribution. They match each payroll and want to amend the matching contribution starting in July to a discretionary matching contribution. We drafted an amendment for the change, we drafted an SMM, as well as Supplemental Notice for Employees. We informed the employees that this would not affect the accrued benefit they've already received or were entitled to prior to July 1, just the match going forward.

This is not a safe harbor plan. Is it necessary to notice the employees, when just changing from a fixed match plan to a discretionary plan?

I have an existing roth IRA with a mutual fund company. I want to make future roth contributions to a new company. Does anyone know if this is allowed? Would I have to close the first account. FYI I have not made any contributions so far this tax year. Are their any penalties or taxes I should know about? Thanks for the help.

Do I use 2A for a Characterisitc code if the Plan is cross tested or do I only use it if HCE's are basicly the only ones getting the Cross testing allocation?

Company A merged their 401(k) into subsidiary B's 401(k) plan. Company A did not do ADP test for 2008 before merging the plans. ADP test for Co A fails, testing the companies separately. Now money needs to be returned to the HCEs of Co A. I believe that the distribution must come out of the merged 401k plan to satisfy the ADP Test. However does the interest have to come out as well, since the merged plan accepted money that was not eligible to be rolled over? Thanks.

A plan has a non-uniform NRA of 62. Therefore, the benefits must be normalized to the testing age of 65.

Does the normalization follow the AE in the plan document with respect to whether mortality is used? Does the normalization of the benefit and the most valuable benefit use the same rules. For example, if AE has pre-retirement mortality than the normalization occurs with mortality otherwise interest only.

The IRS came out and stated that normalization for the most valuable benefit must use mortality in the accumulation factor. It does not appear to make sense that the regular benefit testing would use a different methodology than the most valuable.

Thanks in advance for any all assistance.

I know that a conversion of a DB plan to a DC plan entails the termination of the DB plan, in accordance with PBGC rules. Does anybody have cites for this? THANKS!

We are considering adding a post tax premuim option to our medical plan for 2010. The purpose would be to allow employees who missed qualifing events etc to enroll or change enrollments. I would be interested in any information on this subject.

One particular question is: if an employee missed adding a new baby to the plan within 30 days, can they drop the pre-tax plan and opt into the post tax plan?

Does anyone know any good resources for informaiton on post tax premuim medical plans.

We are considering adding a post tax premuim option to our medical plan for 2010. The purpose would be to allow employees who missed qualifing events etc to enroll or change enrollments. I would be interested in any information on this subject.

One particular question is: if an employee missing adding a new baby to the plan within 30 days, can they drop the pre-tax plan and opt into the post tax plan?

Can anyone answer this question:

It is my understanding that when an alternate payee (ex-spouse) is receiving a portion of the member's benefit, the 415(B) limit is based on the full amount. Is this correct or should the 415 (B) limit be based solely on the portion that the member is receiving? The alternate payees portion of the benefit is not included in the members gross/taxable benefit on the 1099 unlike child support orders in which the taxability is the members responsibility.

If the full benefit is used, can alternate payees receive QEBA payments? If so, when does one apply the QEBA to the alternate payee and what method should be used to determine the portion that is applied? Or do I need to apply the QEBA solely to the members portion of the benefit and leave the alternate payees portion alone?

Hello

I am wondering if someone can help me with the correct way to calculate the 15 year of servioe catch up.

Here is what I am wondering. At one time there was a glitch the IRS created and all prior Roth contributions to a 403 with the employer reduced the $15,000 catch up dollar for dollar. I have heard that is no longer true and that now it it just the Roth contributions as well as the pretax contributions that exceed the 402g limits in past years that would reduce the $15,000 dollar for dollar. If this is correct can someone let me know where to locate the communication that this was corrected?

Also it appears any employer retirement plan cash deferral applies to this calculation as well. Meaning when you look at the overall contributions to see if they have averaged over $5000 a year in contributions that you look at all plans with the employer which could include SIMPLE IRAs, SARSEPs and 401k plans but not 457 plans. Again if this is the case what could I use as a reference that this is true?

Thanks for your help on this

Can anyone answer this question:

It is my understanding that when an alternate payee (ex-spouse) is receiving a portion of the member's benefit, the 415(B) limit is based on the full amount. Is this correct or should the 415 (B) limit be based solely on the portion that the member is receiving? The alternate payee’s portion of the benefit is not included in the member’s gross/taxable benefit on the 1099 unlike child support orders in which the taxability is the member’s responsibility.

If the full benefit is used, can alternate payees receive QEBA payments? If so, when does one apply the QEBA to the alternate payee and what method should be used to determine the portion that is applied? Or do I need to apply the QEBA solely to the member’s portion of the benefit and leave the alternate payee’s portion alone?

6 nonexcludables for the plan year: calendar year 2008. Two have large benefit accruals exceeding 0.50% of pay. The other employees whose accruals also would have exceeded 0.50% of pay? Well, they all quit before their 1,000 hours for calendar year 2008.

One NHCE has an accrual of 0.41% of pay. Can the plan be amended to increase an accrual for the NHCE (or all) under -11(g), or is 401(a)(26) outside the scope of a -11(g) amendment?

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