How long are participant distribution election forms valid for? We have been using 180 days, but I want to confirm that is correct. Also, would that really mean if a distribution was processed and some time later the former participant receives more money (funding safe harbor or psp contributions in next plan year, etc) would you require a new distribution election or can you act on the original instructions even if it is older than 180 days?

We operate in a daily valuation environment and quite often have people take distributions and then get more money later and are trying to figure out the best way to handle the second distribution. In some cases there could be a year or more in between distributions - participant terms early in plan year and takes distribution but was due safe harbor or profit sharing that is not even computed until Feb/March of the next year and not funded until September. Is it ok to use the original form?

We are also trying to figure the best way to indentify these people. Those with small balances are easier to find because we run lists to determine who is under $1000 for mandatory distributions, but again, should we be paying them according to their original instruction or expect a new one and if none is received pay them in a lump sum? We use Relius Administration and there is a terminee w/residual balance report, but it seems to pick up rehires that have balances again and not always terminees with balances after a distribution has been paid. I'm going to work on a custom crystal report to add the "termination distribution processed" field to a report we use now with employee balances and term dates.

Thanks for the feedback!

While doing the 2008 5500 I discovered that Form 5500 was filed for 2005, 2006 and 2007 using the employer's old EIN which was changed in 2005.

If I amend 2005-2007, do I include just the Form 5500 showing the new EIN or should I include the Schedule I for each year and Schedule P (for 2005) since the EIN is on these forms. Nothing else has changed on either schedule.

Want to get DOL everything they need and don't want client to have to see all the schelules and panic if they are not necessary.

Thanks for any input

I've set up a lot of 401(k) Plans that give each participant their own brokerage account, be it Schwab, Morgan Stanley, etc. The accounts are titled in the name of the plan FBO the participant. The participant invests as (s)he sees fit.

Monthly statements go to each participant's home, as well as to the trustee and the TPA.

I can see some merit in the required DOL safe harbor statement regarding diversification and furnishing the link to their website. I have a big issue with furnishing what is essentially a boiler-plate notice QUARTERLY. It strikes me as entirely paternalistic, time and tree wasting. Change your underwear, don't talk to strangers, look both ways and diversify! QUARTERLY?

Does anyone administer this type of arrangement and have an artful way of selling this need to the sponsor (other than the DOL says you have to)?

Does anyone stick this stuff on the Summary Annual Report for non-participant-directed plans?

Can anyone make a recommendation for a company that issues buyer's and seller's bonds under Section 4204 of ERISA? I am having trouble finding a company that underwrites such bonds. Thanks. Brian

As a small non profit are we required to have a vesting schedule for our 403(b)

( 1yr, step down, 2yr 100 %) or can we immediately vest employer contributions?

I work for a broker of 401(k) plans - we have a client with a late contribution from 2008 (about $7K) - I used the VCFP calculator to calculate the lost earnings ($150) and the client will be sending in the contribution and earnings to the trust. My question is this - is there a disadvantage to going through the VFCP program (and filing the application) versus just self-correcting (and not going through the VFCP)? This is the only late contribution and there are no other compliance issues with the plan. Can anyone else who has been thorugh the VFCP process let me know whether this causes more issues for a plan (like bringing about an audit)?

The top heavy regs permit a match to be used to meet TH requirements, which results in the match not then being used for ACP testing. (Treas. Reg. Section 1.416-1, Q&A M-19.) I'm not positive, but I believe that particular reg Q&A language predates a like change to the IRC effective with EGTRRA. (IRC Section 416©(2)(A), last sentence.)

In other words, I believe that the match could be used towards TH (with the ACP impact) even before the enactment of EGTRRA.

Does anyone know if that is correct?

The correction is being done for the 2007 plan year. In 2009, there are no NHCEs employed. Does the employer luck out in not having to make a contribution? Almost seems too good to be true!

Hi, I need to prepare a presentation to our HR Rep population with an overview of Employer welfare plans. Can anyone share such a presentation or a document summarizing the key aspects of employer welfare plans?

Employee has a Deferred Compensation Agreement that begins 15-year payments upon termination of employment. As part of negotatied severance, parties want to delay the payout for 1 year after severance. Is this ok per 409A?

Just wondering what people are doing for reporting assets on Sch I, line 1a?

Are you adding the receivables like we used to do?

OR

Are you adding the discounted receivables that we use for MVA for the Sch SB?

I guess the same question would apply to line 2a(1) too.

I should probably know this, but it has not previously been an issue I've considered. Does the designation of a beneficiary other than the spouse of an employer sponsored life insurance policy require the spouse's consent? Does the answer change if it is a community property state?

I was thinking that the 3% safe harbor NEC had to go to everyone, but wanted to make sure. Can I exclude an HCE from getting the 3% NEC for any reason? I was thinking that we couldn't put an hours requirement or any other requirement on the NEC.

thanks

I think I already know the answer is "no", but I'll ask anyways:

Trustees want to switch to a new investment platform, but face significant surrender fees for doing so. Can they use the forfeiture account to pay these surrender fees? The plan document does allow for forfeitures to be used to pay fees.

Thanks

For FSA's????

The multiemployer 401(k) plan will be amended to include non-union employees of participating employers. It appears that this will cause the plan to become a multiple employer plan as well.

Has anybody encountered such an arrangement? Would ADP/ACP testing and application of other qualfiication rules be applied by "carving out" the non-union group? Would each employer have to file a separate 5500, or only those with non-union participants? Would this cause the arrangement to CEASE to be a multiemployer plan?

This is a new arrangment for me and I'm afraid there could be a number of landmines. Any insights would be most appreciated!

Does anyone have any thought what definition the IRS is looking toward when it uses the term "going concern" in the final regulations?

I posted this on the Corrections board also

Employer sponsors a SARSEP. Employer called us recently concerned about several potential issues with their plan. I just want to make sure that I have a firm grasp of possibe repercussions of the potential errors:

1. Document has not been updated since 1993. I think we can correct using VCP.

2. Potentially less than 50% of the employees participated in a given year. If that occurred the employer ceased to be an eligible sponsor. Is the IRS just going to allow the plan sponsor to cease contributions at this point? It seems like that from reviewing Rev. Proc. 2008-50.

3. Potentially the plan could have failed the deferral percentage test in any number of years. Under VCP employer should be able to correct in any such error by making nonelective contributions for any such and adjusting for earnings.

4. Potentially employees may not have been provided with an opportunity to participate. Under VCP this requires nonelective contributions adjusted for earnings.

5. Potentially excess contributions (elective deferrals) could have been made. Under VCP this requires refunds adjusted for earnings.

Am I grasping this correctly; particularly point #2? As I research further I find a lot of information indicating that after the point at which they failed the 50% test, all contirbuions would need to be distributed. So if they failed the 50% test in 1998, all contributionsfor 1998 & beyond would needd to be distributed. Is that correct? I do not see that mentioned in Rev. Proc. 2008-50, but maybe I am missing it.

Thanks in advance for any guidance

Here is the situation:

Company A owns 50% of Company B. Both Company A & B participate under one plan as a multiple ER plan. Effective 1/1/2008, Company A buys the remaining 50% of Company B, therefore creating a single employer plan. Company B is now a participating employer.

When they were a multiple ER plan, all testing was done separate. For 2008, how should the testing be handled? I am thinking, it would be one test, since in theory, the assets "merged" together effective 1/1/2008. The employers would not be able to utilize the transition rule and continue to due ALL testing separate for 2008 and 2009. Of course, they continue to have different levels of benefits for match (BRF test) and Profit Sharing (General Test).

1. Should a revised H&W SPD include the new COBRA subsidy rules?

2. Should a revised H&W SPD include the new rules under the 2009 legislation (e.g., mastectomy under WHCRA)?

3. If so (and I think the answer is YES to both), does anybody know where sample language can be found? I would rather use model language that is IRS approved or at least "industry approved" rather than spend a lot of time reinventing the wheel crafting such languge from the statutes.

Again, thank you everybody! It's always something...