Earlier this year, Seller's 401(k) plan was terminated prior to the closing of a stock deal. Seller incorrectly calculated the match made on final elective deferrals b/c it failed to pro-rate the comp limit for the short year. Consequently, a handful of participants each got several thousand dollars too much match. Most of these accounts have been rolled over -- some to Buyer's plan. EPCRS says Seller should send a letter to participants letting them know the extra match was not an eligible rollover distribution. Questions are as follows:

(1) To whom should participants be instructed to send the money? Seller's terminated plan has no need/use for it -- the trust is in the process of being zeroed out. Has there been a mistake in fact here such that participants could be instructed to send the money back to Seller (which is now a sub of Buyer)?

(2) Buyer's plan now holds some of the extra match in rollover accounts. Does Buyer have the authority to unilaterally reverse these amounts out of these accounts (like Seller could have if the $ were still in Seller's plan)? If so, what should Buyer do with the money? Put it in an unallocated account in its own plan and use it to pay expenses and reduce contributions? Send it to Seller (now its sub) under the mistake-in-fact theory above?

A calendar year plan with over 100 participants (last year, this year, every year) failed to make its 2009 quarterly contribution due 4/15/2009. It did not correct by 5/15/2009. On June 22, plan sponsor indicated they didn't make the quarterly contribution but not for financial reasons.

Instructions to PBGC Form 10 states "A reportable event must be filed within 30 days after a plan administrator or contributing sponsor knows or has reason to know that a reportable event has occurred." The instructions indicate the PBGC may assess penalities of up to $1,100/day.

Question: Is PBGC Form 10 due (a) May 15 (b) June 14 or © July 22 ?

Has anyone experience in dealing with the PBGC regarding similar circumstances? My inclination is to have the plan sponsor make the contribution post haste so that this can be include in the Form 10 filing.

I received no responses in March but the issue has resurfaced so i will inquire again. Any response would be appreciated. Thanks.

The Form 990 includes a section where Officers, Directors, Trustees, Key EEs and HCEs need to be listed disclosing compensation amounts. One of the items includes "The annual increase in actuarial value of a qualified defined benefit plan, whether or not funded or vested". Has anyone seen this and does anyone know what actually needs to be reported?? Thanks.

I have a very small 501C3 ( not a church or religious ) that had an employee contribution only 403B plan in the past with a few different insurance and fund companies. THere are only 6 participants. They stopped all contributions in the Fall of 2008 with concern over the new rules.

Now I am considering low cost options for them to start a new "plan ".

Oppenheimer and Metlife both have a Non Erisa Plan Document for use. THey also suggest that the employer really does not need a TPA as their enrollment and distribution forms and procedures will comply with the new rules.

Your thoughts and recommendations would be appreciated.

Employer 1 is selling assets to (newly created) Employer 2. Employer 1 and Employer 2 are unrelated.

Certain employees will terminate employment with Employer 1 and become employees of Employer 2 performing the same tasks for Employer 2 that they performed for Employer 1.

Employer 1's plan provides for a distribution upon "termination of employment." It does not appear to have adopted the "severance from employment" standard.

Employer 2 will adopt its own 401(k) plan.

My questions are:

1. Does the same desk rule continue to apply to plans that do not adopt "severance from employment" as a distribution option?

2. If the answer to #1 is yes, does the rule set forth in Rev Rul 2000-27 (which states that the same desk rule does not apply when the former employer sells less than 85% of its assets) still apply?

We have a new plan effective 3/1/2008. This will be the first 5500 filed. 12/31/2008 the participant count was 216, but since it is a new plan there were no participants on the first day. Correct? There is an audit being doing, but should we be filing a Schedule I or H. Relius 5500 software keeps giving me an error when I try to file an I. I just assumed since the company is doing an audit, it would require the more detailed schedule.

Thanks

Employer SH matches every payroll using the correct formula. However, many employees have huge swings in compensation from payroll to payroll, as they are also paid commissions. Therefore, the deferrals of participants that defer a constant dollar amount are sometimes under 3%, between 3 and 5% or over 5%.

Consequently, at the end of the plan year the total SH match (that is correct on a payroll basis) will many times be out of range on an annual deferral percentage basis.

Does the employer have to make the additional match contributions or withdrawals after the plan year end in order to satisfy SH formula on an annual basis?

Thx

At what age do you have to withdraw ROTH funds, or can you keep on trading tax-free in the ROTH after becoming 75 years old and older ?

Am I missing anything in the following?

DC plan (ESOP) previously allowed employee after-tax contributions to individual accounts with tax-deferred earnings. These accounts are part of the ESOP assets, but they are not invested in any securities of the plan sponsor.

Participant contributed $8,000 (after-tax) in 1986. No after-tax contributions since then.

When participant receives distribution of the account (now worth say, $22,000), participant can take the original $8,000 in cash tax free and roll over the earnings ($14,000) to an IRA (or take the earnings in cash and pay tax on that amount).

Because the after-tax portion was contributed before 1987, it can be taken out separately, and the pro rata recovery rules (distributon = some contribution plus some earnings) for distributions of after-tax contributions made after 1986 do not apply to the $8,000.

And it doesn't hurt that there would be no RMD for 2009.

Participant would like to do this, and I would like to be sure we aren't missing something.

All comments are appreciated. Thanks.

A physician defers the maximum into a hospital 403(b) Plan, and then makes a contribution to his own separate PSP to the maximum Section 415 limitation (without considering the 403(b) plan deferral). Permissible?

Sole proprietor filed tax return and made profit sharing contribution based on net sch c income. Later the accountant finds a mistake and income was 50k or so lower. The return is amended. The amended income would significantly reduce allowable contribution.

The deduction for the contribution must get reduced in the amended filing, correct?

If the contribution was made after the end of the plan year, there is no penalty for over contributing, at least as far as that particular year, correct?

What penalties would apply and or corrections can be made if the contribution was made during the year being corrected?

It is my understanding that, under current Hardship rules, a plan's Safe Harbor source cannot be used. Does anyone know a specific cite or reference spelling out this rule?

I have a plan that currently has a NRA of 54 1/2. At this time they may wish to amend it. Forgetting for the moment that this NRA may be unreasonable and Notice 2007-69, let's say that the client amends it to NRA of 62. My recollection is that the NRA is a protected benefit. Is this correct?

Additionally, the plan is currently a new comparability plan. I was using age 54 1/2 to process the EBARs. With the NRA change, what do I use to calc the EBARs. I would guess age 65. The reasoning for this is because age 54 1/2 and age 62 are not uniform as the NRA is a protected benefit. Therefore, when the NRA is not uniform, Age 65 is to be used.

Am I on the right track or way off track. Any comments and cites are greatly appreciated.

We are looking for some information for comparison for our PTO program.

1. How much PTO do your employees receive? Up to 5 years, our employees get 25 days (accrued per biweekly payroll period), and 30 days from 5 to 10 years. Holidays are included in the PTO time (six mandatory holidays per year: New Year, Memorial Day, July 4, Labor Day, Thanksgiving, and Christmas), so if you have these separated, please indicate how many paid holidays you have.

2. Our policy is that after seven unexcused absences in a rolling 12-month period, the employee is "written up" (i.e., receives a written warning) for attendance. An unexcused absence is any absence that is not requested and approved in advance. So, for example, if an employee calls in sick, that is an unexcused absence. Some employees want these not to be an unexcused absence if they get a doctors note. Or, have other exceptions that would reclassify an absence from unexcused to excused. My sense is that seven unexcused absences in a rolling 12-month period is more than generous and therefore our "anything not requested and approved" standard is very good. It is simple to administer and is not subject to "Well,-if-you-retroactively-approved-her-absence,-you-should-retroactively-approve-my-absence" discussions (arguments) with employees.

Thanks for your help!

Hi all,

We're looking for an actuary in the Philadelphia area to do some FAS 106 actuarial work. If you know of anyone, please respond by email: scott2434@rcn.com

TIA.

.. Scott

Hi all,

We're looking for an actuary in the Philadelphia area to do some FAS 106 actuarial work. If you know of anyone, please respond by email: scott2434@rcn.com

TIA.

.. Scott

I was wondering if anyone knows where I can find a definition of the phrase "total client assets under its management and control" for purposes of meeting the $85 million in assets requirement for a QPAM, under PTE 84-14. Thanks for any responses.

Reposting from "plan terminations" board ...

Under a partial plan termination, vesting of the affected participants is required TO THE EXTENT FUNDED. I take this to mean that vesting is granted to non-vested affected participants only if the plan's assets exceeds the Priority Category 5 plan termination liability. Is this a correct interpretation? If so, I would guess that in the current environment, not much extra vesting will be happening. Or said another way, if the assets are below the PC5 liability, who cares if a partial plan termination has occurred?

Thoughts/comments?

Should a participant be reported on Schedule SSA if he/she has received the first in a series of scheduled installment payments?

I'm looking for information on what others charge for qualified retirement plan distribution fees (Terminations, Retirements, Death, Disability, In-Service, Hardship Withdrawals, etc.) from Defined Contribution Plans: 1) How much do you charge, 2) for smaller distributions equal to or less than the distribution fee, do you just have a fee transaction with no distribution made, or, do you waive the fee on small amounts. If you do waive fees on smaller amounts, what is the minimum dollar amount used, 3) Do you charge more for Roth distributions? Thanks for your feedback!