Any comments are appreciated:

A C-Corp has no employees, only the owner. She maintained a SIMPLE (assumed to be SIMPLE IRA) through 2008. She now wants to do a SEP in 2009. The company will cease to be in existence after 6/30/09.

(1) I don't see a problem starting a SEP since she is not funding the SIMPLE in 2009 or later

(2) Is there a permanence problem with her starting a new plan in 2009 and having it only be around for 6 months?

(3) Her comp for 2009 will be around $150,000. Can she put in 25% of $150,000, or is the comp. limit pro-rated to $122,500, meaning she can only put in up to 25% of $122,500.

Thanks

Say a small defined benefit or defined contribution plan (less than 15 participants) wants to make a plan amendment.

While conceptually and operationally such a change is straight forward I want to discuss paperwork logistics.

My belief is to keep things simple and that there is more than one way to skin a cat.

For purposes of this thread let's ignore the participant notices 204h, etc. I just want to focus on the plan itself.

With that said, to make a plan change is it satisfactory to prepare a written consent by the Board that also satisfies a resolution and provide that with the plan amendment (both for signature)?

And finally, is there specific language that must be included in the consent and amendment, in addition to the actual substance of the plan change? I would think that there is not a precise way that this be done as long it accomplishes a few basic things.

Curious to get comments, with the goal of keep it simple.

Thank you.

Employee with 7 years of service incurs 5 consecutive breaks and then gets rehired. Document uses rule of parity. Is that person forever grandfathered in to vesting and eligiblity, or will it at some point be disregarded?

Assume a church plan is not subject to ERISA and the church amends the plan to increase the normal retirement age and decrease the accrued benefit. On what basis could a participant who has reached normal retirement age argue that his/her benefit could not be reduced. I've read that the anti-cutback rules of Code Section 411(d)(6) do not apply to Church Plans per 411(e)(1).

It appears that any cause of action would have to be found in (i) the Plan document, (ii) state law or (iii) church law.

If the Plan document reserves the right to amend the plan unilaterly and without regard to whether it reduces a participant's accrued benefit, then item (i) is out.

Item (ii) seems like it would have to be like a promissory estoppel basis, that the participant did everything he was asked to do and was promised a certain benefit in return.

Any thoughts on how to argue this amendment would not apply to a participant who reached normal retirement?

I am relatively inexperienced in the benefits area and I'm hoping someone here can help educate me on this specific scenario.

If Mr. Smith owns 80% of a publicly traded company, owns 100% of a not for profit organization, and owns 100% of a privately held company, does this form a controlled group? The entities are in seperate lines of business and do not transact with one another.

It doesnt seem right that they would be in a controlle group, but I can't find the legal provision that would expempt them from the 80% rule. Then again, I am a newb to this area.

Another scenario....A holding company with 3 subsidiaries. Holding is a US publicly traded company, the 3 subsidiaries are in US, Japan & UK. No one is on the payroll for the holding company, hence no benefit or retirement/pension plan. Is it technically correct to say that there is controlled group here? Also, do the rules for a controlled group go beyond US borders?

Thanks for any help provided.

Say a small defined benefit or defined contribution plan (less than 15 participants) wants to make a plan amendment.

While conceptually and operationally such a change is straight forward I want to discuss paperwork logistics.

My belief is to keep things simple and that there is more than one way to skin a cat.

For purposes of this thread let's ignore the participant notices 204h, etc. I just want to focus on the plan itself.

With that said, to make a plan change is it satisfactory to prepare a written consent by the Board that also satisfies a resolution and provide that with the plan amendment (both for signature)?

And finally, is there specific language that must be included in the consent and amendment, in addition to the actual substance of the plan change? I would think that there is not a precise way that this be done as long it accomplishes a few basic things.

Curious to get comments, with the goal of keep it simple.

Thank you.

I am relatively inexperienced in the benefits area and I'm hoping someone here can help educate me on this specific scenario.

If Mr. Smith owns 80% of a publicly traded company, owns 100% of a not for profit organization, and owns 100% of a privately held company, does this form a controlled group? The entities are in seperate lines of business and do not transact with one another.

It doesnt seem right that they would be in a controlle group, but I can't find the legal provision that would expempt them from the 80% rule. Then again, I am a newb to this area.

Another scenario....A holding company with 3 subsidiaries. Holding is a US publicly traded company, the 3 subsidiaries are in US, Japan & UK. No one is on the payroll for the holding company, hence no benefit or retirement/pension plan. Is it technically correct to say that there is controlled group here? Also, do the rules for a controlled group go beyond US borders?

Thanks for any help provided.

I have this plan that we took over for another TPA and I only have the VS doc that they adopted late in 2005. The old TPA would have been required to amend for Final regs and for the 2006 cumlative changes, and possibly for a change in the classes, as the 2007 annaul valuation has 7 classes when the doc I have has 4. I have just emailed the old TPA for this info (and clarification on some other things), but I had a thought that I wanted to post here for other options.

The client says they can't find or don't have anything else (not everyone is organized they are just trying to run their business....). Let's say the TPA did amend the plan for the required amendments, but would charge a fee to resend them (we would). If the client doesn't want to pay, where do I go from here? We need to restate their document, and will include the items I mentioned above (classes are a seperate issue), but if they were audited, what would the IRS think? We would run with the asumption that these were done previously, but we couldn't prove it.

The plan sponsor is going to have to get me something on the classes. But again, I don't know where to go from here if they don't.....

It's like pulling teeth to get info from this client...

Thansk for your thoughts...

I plan to amend to eliminate an excluded class which will allow me to pass coverage. It's just deferral and safe harbor match, both coverage tests fail equally. How do I handle the Safe Harbor match? For the 401(k) piece, the client will be making a QNEC equal to the average deferral percentage for the NHCE's to each NHCE that is brought in. Do I apply the same principle to the safe harbor match by taking the average match percentage for the NHCE's? Does this take me out of the free pass on the top heavy status as well as (k) and (m) testing?

These things get complicated!

Where is there mention of the 30-day wait period for distributions, and that people can waive it and get their distributions sooner?

Employee gets divorced while working for a company. At that time an order is entered stating that employee must pay child support and enroll dependent child in employee's health plan, which presumably the employee does at the company.

Employee leaves employment and goes to work for another employer and enrolls (through cafeteria plan) employee's child in plan as a part of initial enrollment.

Sometime later, employee gets revised order stating that dependent original order is vacated (because the child is emancipated), therefore, employee does not have to pay support or carry dependent on health plan. Dependent is has been added to former spouse's plan although the revised order does not require it (it is silent on issue). Not sure how child was added but assume that the child was added in an open enrollment period held in late 2008 for the 2009 plan year.

Can employee change employee's cafeteria plan election to remove dependent's coverage mid-year?

Thanks for any thoughts.

The revised Schedule SB has modified the disclaimer under the EA's signature:

1. [ ] If the actuary has not fully reflected any regulation or ruling promulgated under the statute in completing this schedule, check the box and see instructions.

2. [ ] If the actuary has no idea whether he has failed to fully reflect any regulation or ruling promulgated under the statute in completing this schedule, check the box and join the crowd.

I hate to revisit this topic, but i'm still not sure which way to go with this. It seems the concensus of this board is that if for a 2008 calendar plan year with quarterly conbtribution requirements, a credit balance election is made in April of 2009 to apply the entire 2008 funding requirement and no cash contributions are made, the funding requirement is met and there is no penalty discount for late quarterly contributions since any credit balance in essence applies the credit balance as of 1/1/08.

However, it seems to me that the proposed regs say that the quarterly contribution is deemed satisfied on the date the credit balance election is made, and if late, a penalty discount would apply.

I also realize that final regs may confirm the concensus of the board, but until then is there any cite or publication that is being relied upon to support the concensus?

Thanks.

Suppose you have a small DB and 401(k).

The employer would like to have a higher benefit for certain HCE's in the DB (say 6% of pay per yr) and provide 2% of pay to all others. In the 401(k) they will provide 7.5% of salary employer contributions every year.

Could the 2% of pay benefit each year be used to meet part of the 7.5% gateway in the 401(k) plan?

Suppose you have outstanding restricted stock that automatically vests upon a change in control. Change in control is currently pending--agreement signed but deal has not closed and will not for another month or two. If the closing occurs as scheduled, it will be during the middle of a blackout period and recipient will not be able to sell shares to cover taxes and so is interested in delying vesting / taxation until after blackout.

If all the parties are in agreement, is it possible to amend the existing restricted stock agreements to change / delay vesting of the awards so that they no longer automatically vest upon closing of the change in control but would now vest upon the earlier of (1) the change in control, or (2) some fixed number of days after the end of the blackout period if change in control occurs during a blackout?

Does that work under Code Section 83? Does it work / continue to avoid 409A? In this situation, the employee would agree to be at risk of forfeiture of the awards through the remaining period so the awards would still be payable immediately upon vesting. Although I know 409A may view some delayed vesting provisions as resulting in an impermissible deferral feature, that would seem only to apply to stock rights subject to 409A out of the gate. Here, there would not be attempt to defer receipt of the stock (compensation) beyond vesting--there just would be a mutual agreement to extend required service period and thus the vesting period.

Does the answer change if the provision in the restricted stock award is amended to provide for vesting to occur upon the earlier of: (1) the fixed date after the blackout ends, or (2) involuntary termination of the executive's employment by the company such that the employee is only at risk of forfeiture if he resigns or is fired for cause?

Thanks in advance for any thoughts or insights.

I recently generated a volume submitter defined benefit plan document and form 5307 using the Sungard Corbel system.

The Form 5307 stated that the date of advisory letter was 3/31/08 but did not provide a serial number; which would appear to be an EGTRRA pre-approval opinion letter. However, the advisory letter we have is dated January 17, 2002. The Form 5307 automatically generates the date of the advisory letter and the serial number.

Has the IRS issued favorable opinion letters for volume submitter plans yet? If not, then I don't know why the form 5307 lists the date of such a letter.

Anyone have an explanation for the above?

I have a call into Sungard but don't when I will be able to talk with them as they are difficult to reach.

Thanks.

We are working on a 2008 calendar year Cross-Tested 401(k) Profit Sharing Plan with a 3% Safe Harbor non-elective contribution (group of physicians with several support people). Two rate groups: physicians and non-physicians. The client didn't realize that an older (non-physician) NHCE paid just under the HCE comp thresshold would meet the plan's eligiblity requirement (1 YOS / age 21) and enter the plan during 2008. So when running the non-discrimination test this person must receive a ridiculous allocation (like 50% of pay) to pass the test to support the contributions already funded and allocated to the physicians.

Is it ok to amend the plan retroactively and bring in the 2 employees that have not met the plan's eligiblity requirements, that were hired, say, prior to 7/2/2007 in order to pass the test? At first glance it appears to be non-discriminatory as we're not picking a specific (otherwise) ineligible employee due to age, vesting, etc. but we are applying the rule across the board for anyone hired on or before the specific date (and there are only 2 of them - everyone else is already in the plan except for those hired after 7/2/2007). If this is ok, what about these 2 employees' eligiblity to make 401(k) deferrals in the past and in the future? Let's say they never will meet the plan's eligiblity requirements? Any other issues I need to be aware of?

Any input would be greatly appreciated!

Thanks!!

A small 401(k) plan failed to submit timely deferral/loan payments in 2007 when they were transitioning to a new manager. The accounts were frozen during the implementation and then they had problems learning how to submit contributions. This, I am thinking, could have easily been avoided by submitting contributions to an interest bearing money market account set up in the plans name at a bank until the kinks got smoothed out at the new provider(Fidelity) or they could have simply opened a holding account at Fidelity. Irregardless they made up the late payments and earnings on the late payments were calculated and ultimately credited to the participants account.

After this they received DOL correspondence requesting them to apply to VFC and provide exhibits that the deposits and additional interest were made.

My question is should the applicant seek relief under PTE 2002-51? Total earnings credited were $1127.93

If not, what would the basis be on the excise tax? The earnings?

E'er and E'ee agree that E'er will pay E'ee $xx if E'ee works two more years. Payment will be made the day after the two-year period has passed and the plan doesn't provide that this timing may be changed by the E'ee. Am I correct that the deferral election requirement under 409A(a)(4) is not applicable?

Thanks,

Ken Davis

Does the E'ee have a legally binding right to deferred comp in the following situation. E'er promises to pay E'ee $xx if E'ee works two more years. The payment is due to be paid the day after the two-year period has passed. If E'ee quits before the two year period has passed, he/she receives nothing. Neither E'er nor E'ee can change the amount of, timing of, or E'ee rights to the payment.

Thanks,

Ken Davis