Pre-PPA, a plan had routinely a minimum contribution requirement in the $100K area. In 2008, Plan dumped in about 70K extra 2007 to get 2008 AFTAP to 80%. In 2008, PPA contribution was about $65K, which employer made. Then, when WRERA came along, contribution was revised to about $48K. So, Plan had excess contributions that were cheerfully added to PFB. Since 2008 funded at least 80%, PFB will be used to reduce 2009 minimum even though assets tanked in 2008. Use of PFBh will be reduce minimum to about $50K because of asset smoothing and switching the segment rate basis.

What has happened? My fees have increased, the amount of paper has increased, the confusion has increased, but contributions have decreased at a time when the intention of PPA was for them to be stepped up.

But there is some comfort that the valuation process now reflects continuallly up-to-date mortality tables -- that is, provided the general health of the participants follows the government prescribed one-size-fits all law of mortality.

I am trying to figure out how far you can go with operational delays and other similar operational defects for a grandfathered plan before you risk the plan being treated as having had a material modification. i.e., if the plan is unable to locate a participant for whatever reason and the money has to stay in the plan for a period of time. In that case would it make a differeence if you make up the lost payments. Also, would these operational errors adversely affect only the participant whose paymetns were late, or possibly causes all of the other participants to lose their grandfathered status.

Any suggestions/thoughts on this matter are welcomed. Also, please advise if you know of any articles discussing this issue.

Who exaclty is an "eligible" participant for catch up contributions? I know the participant has to be over the age of 50, and, I thought, the participant would have had to exceed the 402(g) limits, ADP Limit, or plan deferral limit.

In the following example, is this participant elgible to do cath-up contributions:

The plan is a 401(k) Profit Sharing - for 2008 the owner receives a profit sharing contribution of $46,000, and is over the age of 50. Can he also defer $5,000 as catch up contributions to reach the $51,000 limit?

DCAP. Now is eligible for state assistance that pays for day care. Qualifying event for change of election?

Thanks

The Children's Health Insurance Program Reauthorization Act (CHIPRA) of 2009 took effect on April 1, 2009. The law provides that the DOL and HHS will work with state Medicaid and CHIP agencies to produce model notices by April 1, 2010. And employers are required to provide employees with the initial notice beginning with the first plan year that begins after the date the initial notices are issued.

I am confused. I thought that employers needed to issue notices now to employees. Is that true? Or can employers wait until the model notices are issued? If they have to notify now, what is the deadline to issue the notice? And are they left to draft their own notices?

Thanks.

This is unrelated to the 2009 suspension of RMD's.

Can a active participants (a non-5% owner) who previously elected to and has been receiving annual RMDs stop taking these payments? The participant wants to now suspend all future RMD's until he actually retires.

The plan is written to say that a non-5% owner can defer payments. The plan is silent on whether a participant who previously elected payments can at anytime recind that election.

Any input is appreciated.

Plan has 1 YOS (12 months/1,000 hours) requirement with entry on 1/1 or 7/1 (dual entry)

EE was hired 6/5/07, left 4/15/08 (after working 1k hours from 6/5/07-4/15/08) and then is rehired 11/21/08.

Document says any employee who terminates prior to entry date but after satisfying eligibility requirements, enters the plan upon later of reemployment date or next entry date.

Since the EE quit before 12 months, does he have to now wait until 1/1/10 to enter plan?

This circumstance has always confused me.

Thanks

Can anyone help me understand this?

I have a DB plan that terminated and paid all participants out on 5/16/2008. We promptly filed the 2008 Form 5500 for the final filing. Basically it was a 2007 form with the 2007 crossed off everywhere and 2008 replacing it. We had done this before with no problems.

I got a letter today... 11 months later, saying they could not except the schedule B... it had to be an SB. (I am aware of the notice that went out saying they won't except SB. Does any one remember what it was called?)

My question is when did they officially release the SB? Am i suppose to use the PVABs as the funding targets? anyone else dealt with this?

Andrew

Does a discretionary amendment made pursuant to the HEART Act have to be adopted by the end of the plan year the amendment is effective or can the plan be amended in 2010 and the discretionary amendment relate back to a prior plan year?

We have a client that filed their corporate tax return for 2008 in late January, 2009. When the valuation and Form 5500 were delivered to them today, they informed our office that they have not funded their 2008 SHNE contribution yet. I know that they have until the filing deadline date to fund, but since we are already past 3/15/09, what are the ramifications for not funding by then? I'm reading up on 404(a)(6), but thought I would pick some brains here before I spend hours reseaching. The client wants an answer today, of course! Thanks for any guidance on this. It's never come up before in 20+ years of admin work.

I'm sure you have all seen this but for those who have not, it is the most inspiring thing I have heard in a long time.

A perfect example of don't judge a book by its cover.

Cynics beware.

Susan Boyle

Is it required that catch-up contributions be matched in a safe harbor 401k plan?

Thanks

An employee terminates employment with a balance in their Health FSA. They are offered COBRA for the Health FSA.

At the same time, they are hired by another employer, and become eligible for their FSA plan. Can they still continue COBRA through the former employer, and at the same time be covered under the new employer's FSA plan?

Thanks.

I generally try to encourage clients to use NRAs at age 62 or later (safe-harbor), but for the occassional client that insists on using a lower NRA (usually to help increase the tax deduction where high-3 comp avg. is less than 415 dollar limit) is there any good statistical info that is either free or via a modest subscription service that provides some industry norms for retirement ages (any DOL workforce surveys or anything like that). Of course the small family businesss that breeds purebred dogs might have a hard time finding good statistics, but for common occupations there must be some data free or at a reasonable price. Any ideas ? thanks.

There appear to be two different effective interest rates on the Schedule SB: at Line 5 and at Line 11b.

In a small plan, a $25,000 contribution for 2008 was paid on 2/13/2009.

For the 1/1/2009 valuation, to determine BOY assets, I believe that I should use the 2008 Line 5 effective rate to discount that contribution to the valuation date.

The Line 11b effective rate, that will appear on the 2009 Schedule SB is -18.41%.

Am I correct that the Line 11b effective rate is only used to calculate the 1/1/2009 prefunding balance?

Thanks!

Anyone know of regulations that would limit the amount of contributions to a company non-qualified deferred comp plan if their DB plan's AFTAP is between 60-80%?

Plan's very large, national investment service provider for 401(k) participant-directed plan refuses to make RMDs, even after being told it is a 401(a) plan qualification issue; the TPA and legal counsel have been unsuccesful in convincing them this is required. They will not distribute without a written participant election for distribution on file. TPA or Trustee instructions to distribute they will not accept. Anyone else run into this kind of situation or have a solution (other than participant-by-participant EPCRS corrections)?

Yes, we are still doing end of the year valuations for all of our plans under 100...

I have several questions:

Am I correct in the following assumptions?

1) All plans regardless of size are required to have quarterly contributions for the plan year following a plan year with a shortfall.

2) For an end of the year plan with prior year shortfall, even though, the 2008 required contribution has not been calculated until after 12/31/2008, contributions were still needed to be made on 4/15/2008, 7/15/2008, 10/15/2008 and 1/15/2008. These missed payments are then penaltized.

follow up questions.

1) Do pbgc covered plans have to notify the pbgc of missed quarterlies with form 10?

2) Is the 5% penalty applied the same way as for beginning of the year plans?

Thank you,

Andrew

How are people doing them? Manually? How long are they taking? Relus' isn't ready nor are they committing to when they will be. We're proceeding manually at this point. Slooowly.

DBPP. Participant turns age 70.5 on 9/1/09. If he elects to defer RMD start date until 4/1/10, is the RMD for 2010 12 times the monthly accrued benfit (2010) plus 3 times the monthly benefit for 2009 (10/1/09-12/31/09)

Thanks!