Does the DB and DC plan combination have to pass a comparability test from a rights and features perspective in order to permissively aggregate?

For instance DC plans can take a lump sum at termination of employment whereas a DB plan can only do it at early retirement and retirement?

Would this be a failure in the “features”?

Our company has now purchased two other companies. Both, including our site have 401(k) plans. It will be a controlled group situation. Can anyone share the risks and benefits of merging the three locations together under one plan? Is there a benefit other than the possibility of a reduced expense situation? Are there risks to merging these plans in a down market?

Really appreciate any helpful advice!

We have an individually designed plan that filed an 8905 that we are putting on a pre-approved volume submitter plan. It looks like we will need to use a separate trust agreement which we understand destroys reliance on a pre-approved plan. If this is the only change to the pre-approved plan, can we file a 5307 or do we need to file a 5300? If we file a 5307 and it goes through, do we get the 6 year reliance or are we still on the 5 year reliance for an individually designed plan? Any thoughts would be appreciated.

I have an ESOP that was timely submitted in Cycle B. To date, nothing has happened on the application. Does that plan receive extended remedial amendment protection with respect to any interim amendments required since the filing? If not, why not?

What is the proper order for credit balance adjustments for the following example:

COB as of 1/1/2008 = $100,000

MRC for 2008 $50,000

Discounted contributions as of 1/1/2008 $100,000 (contribution date 3/15/2009)

Actual Rate of Return for 2008 -40%

Effective Rate 6%

When does the sponsor need to elect whether or not to add the $50,000 excess contribution to the PFB?

Assume the sponsor elects to add the $50,000 excess to the PFB. What is the COB and PFB at 1/1/2009?

The AFTAP based on 1/1/2009 assets and 2008 contributions is 75%. Assuming COB and PFB are sufficiently large enough to burn to get to an AFTAP of 80%, does the mandatory burn take precedence over an election to use the COB or PFB to offset the MRC for 2009? In other words, can the sponsor make an election to use the COB and PFB to offset the MRC for 2009 before a mandatory burn takes place for the AFTAP?

Is 1099 compensation includable for retirement plan purposes? Plan Doc defines comp as W-2. what if employee was independent contractor and then hired full time midway through the year? do you only take into account his full time W-2 compensation?

I am working to put together a report on the history of retirement plans from the beginning of time. Does anyone have a good link or know of a good book or two that could help me put this report together? Thanks for your help!

A plan has a fiscal and plan year of 6/1 to 5/31. And the limitation year is the plan year.

The 415 regs are effective April 5, 2007 and apply for limitation years beginning on or after 7/1/07.

So this means to me that the 415 regs apply for the specific plan above for the plan year beginning 6/1/08.

The plan was terminated as of 5/31/07 and assets distributed 4/7/08.

First question is did the plan need to be amended for the final 415 regs? Since the regs were effective 4/5/07 (prior to date of plan termination) it seems that there is no harm if a plan amendment adopting the 415 regs was signed. Of course they would never apply since the plan assets were distributed prior to the date the rules appply (i.e. 4/7/08 versus 6/1/08).

Regarding application of the remedial amendment period:

My understanding is that the remedial amendment period for the final 415 regs is up until the due date of the filing of the 2008 tax return. The 2008 fiscal year ends 5/31/09 and thus isn't even due yet. So does this mean that an amendment is not required until for example 8/15/09 (due date w no extensions) to avoid disqualification and thus really never had to be doen for this plan?

Thank you.

I have several questions regarding the treatment of the otherwise excludables....

Plan information: 12/31 PYE, Prior Year Testing Method

I need to rerun the 2007 ADP/ACP Test. Since we are beyond the 12 month correction period, I believe I can not disaggregate the otherwise excludables into a separate group. Since the plan uses the prior year testing method, what averages do I use? In 2006, the plan did apply the otherwise excludable option. Do I now need to do a weighted average to adjust the 2006 average to be used in 2007.

In addition, since I am not allowed to disaggregate for 2007, how does that impact my 2008 test? For 2008, can I disaggregate?

Any help would be appreciated!

Has anyone used the DOL's online payment system for the DFVC Program fees? I'm not even sure if I want to mention it to a client as an option, not having tried it myself.

Thanks!

For 1 our unions, a spousal surcharge of $150/month goes into effect for 2010 for anyoen who has a spouse who has coverage with their employer but the employee still wishes to cover the employee on our plan.

Does anyone have a certification/affadavit sample form to use for this purpose?

Much thanks!

Lexy

I've been doing some research into this subject and think I've sorted most of it out, but does anyone have any insight into how the privacy rules/restrictions found in the Gramm-Leach-Bliley Act would impact a third-party administrator of Employee/Executive benefit plans? My reading of the statute/regs is that since the protections of the law extend to "Consumers" or "Customers," both of whom are defined as "individuals," that a bank or other company providing NPI (nonpublic personal information) in the course of the administration of their employee benefits programs would not be considered a "consumer" because that company is not an individual providing that information. Rather, it is providing the information (some of which might be considered NPI) of its employees in the course of providing them with compensation, etc.; not only would the company not be considered an "individual," but the information is being provided for business purposes rather than in connection with "financial services for personal...use" (can't remember the specific language used in the GLB Act). If anyone 1) can confirm that my interpretation is correct, or 2) knows that TPAs actually are subject to some/all of the GLB Act requirements, or 3) knows any other information or sources that would shed some light on this issue, the help would be much appreciated.

Has anyone seen any examples of how to correct a violation of Code Section 417(b)(2), which provides that a plan's QJSA must be actuarially equivalent to its straight-life annuity, or 1.401-(a)-20, Q&A-16, which provides that a plan's QJSA must be at least as valuable as any other form of benefit for married participants?

This is a private school that sponsors a non-Erisa 403(b) Plan. Plan has been working well until 2009. Unexpectedly (according to the client), the investment company stopped receiving contributions. This was temporary at first and the explanation given was that the accounts needed to be switched over to a new recording system. Well 30 days worked it's way into 60 then 90. NOw as of May 1st the investment company says that they cannot handle 403(b)s anymore. I am hearing this from our client - so I'm not sure what kind of warning was given. Also, there has been turnover at the investment company and so our client had to deal with a switch in contacts.

The client has been withholding but now wants to refund all deferrals that were not deposited (from 1/1/09 - 4/30/09). What would you advise? He also is thinking that instead of returning deferrals, opening a money market account in the name of the 403(b) plan and depositing all deferrals into the plan's money market account until this mess is figured out. At this point, a new investment house is needed and the client is not sure how quickly this can be done.

Thanks for any help.

I hear so much about joint tenancy for properties of married people. But I also hear that this is not a good idea. I don’t really understand the reasoning behind this, and was wondering if anyone knew advantages/disadvantages…A local San Diego Wills and Trusts Attorney has suggested putting the property in the name of a trust, but I’m not sure I want to deal with the hassle of all this paperwork. Is it really worth it?

“Resolve to be tender with the young, compassionate with the aged, sympathetic with the striving, and tolerant with the weak and the wrong. Sometime in life you will have been all of these.” --Lloyd Shearer

401k participant who had a participant loan partially repaid died. He had designated as his beneficiaries his surviving (second) spouse 50% and his only child (from prior marriage) the other 50%. Both death beneficiaries are planning on having a direct rollover of their respective death benefits to IRAs.

The deceased participant's estate is now the debtor on the loan. The estate is cash strapped, and will be for quite some time.

Where the debtor on the loan is the Estate and the owner's of the IRAs would be the spouse and the child "as beneficiary of" the deceased participant, may the IRAs be assigned 50% each of the promissory note that the Estate is now obligated to pay?

I am a pension receipient of a multiemployer Plan for a union staff Just got notice that they are underfunded for this yr, so using 2008 assets (correct word?) numbers. However, sent notice of potential reduction of pension benefits. How much advance notice need the union give us before cutting the checks down?

Last part of question : sorry, but very upset:

I looked at the payments guaranteed by PBGC. Could I really get a 2/3 cut in my check?

Thank you very much.

Hi All,

I have a 401(k) plan with immediate eligiiblity for 401(k) and match

If we don't to allow a refund after 90 days to folks automatically enrolled, how would that work with the 30-day notice requirement in aplna with immediate plan elgiiblity at date of hire?

Lexy

Plan has been terminated 3/31/09. 2009 val date is 1/1/09. The only participant is the owner. 2009 val results are as follows:

TNC = $0

Shortfall Amortization Payment = $10,000

Carryover Balance = $5,000

I think that I can recognize the plan termination amendment made in Feb. '09 and prorate the charges. Agreed?

Assuming I can prorate, is the correct result:

1. ($10,000 - $5,000) x 3/12 = $1,250, or

2. $10,000 x 3/12 - $5,000 = $0

401K audit - how can one test the income allocation in selected individual participant accounts?

The schedule of individual account balances only has the market value (MV) and number of shares on both 1/1/08 and 12/31/08, the total contribution $ amount and shares for the year, and dividend $ and shares for the year, by participant and by the invested fund.

The net asset value on the plan level at year end agreed to Form 5500. But how can I ensure the income allocation is correct at the participant level?

We have not been doing this test, but a recent webnar training mentioned it. Anyone out there has been testing the income allocation at participant level?

Any input will be appreciated. Thanks!