I think the answer to my question is no - you can't do what I want but I thought I'd ask anyway.

Plan fails the ADP and ACP test.

The only participant due a refund is catch-up eligible and has not used any catch-up amounts prior to the ADP test for calendar year 2008.

After running the ADP test the HCE needs an excess contribution refund of $3,000, but 100% of the refund is recharacterized as catch-up and no refund is made due or made by the plan.

The plan also fails the ACP test and the HCE needs an excess aggregate contribution refund of $1,000 to correct the ACP testing failure.

However, if 1% of the NHCE, ADP is shifted from the ADP test to the ACP test, the ACP test will pass but the ADP test will now have a larger refund due. Under these facts the HCE would now need refund of exactly $5,000 due to failed ADP after shift. Because the HCE had used no catch-up prior to the test 100% can be recharaterized as catchup.

The Plan document allows for shifting, can this be done?

It seems like gaming the system to me if it can be done but there are what I consider more abusive games (see cross testing and DB/DC combos) that can be played that are perfectly allowable under the code and regs.

Getting conflicting information from sources on these topics...are these statements true?

1. An "unfunded plan", as it relates to required reporting, referes to a fully insured plan. As such, three is no requirement to distribute the full Summary Annual Report.

2. However, the Summary Plan Description is still required for compnaies with 100 or more employees. Most often, this can be found in the Certificate of Coverage, which is produced by the fully insured carrier.

Thanks for any thoughts on this...

I have an annual profit sharing plan. The termiated participant was paid 20% of his 12/31/2006 balance during 2008. 2007 there was a gain, 2008, loss. If the participant was due 2,200 as of 12/31/2007, but the participant was mistakenly paid 20% of the 12/31/2006 balance, which as an example was 2,100. How would his vested balance be calculated at 12/31/2008. I have always used ending balance plus distribution paid during year times vested percent, less amount paid. This way it shows he was overpaid, but is this particpant due the difference between the vested balances at 12/31/2006 and 12/31/2007, which would be $100 less the loss for 2008?

I hope this isn't too confusing. Has anyone ever had this happen?

read the name then the number

Must a Form 4 be filed in connection with the award of non-vested restricted stock units (i.e., no actual issuance of shares unless and until vesting criteria are satisfied)?

I am taking over a small 401k plan from a prior recordkeeper. The prior recordkeeper is charging a $100 fee to the client for the services of collecting the plan document, final accounting, etc. and shipping to me. In addition, the prior recordkeeper has stated that they will hold all materials until the client pays this $100 fee. Maybe they need the revenue and have to shake down even small invoices. Is this legal? Is it legal to hold client materials until an invoice is paid?

If an employee is a participant in the Plan as of the Change in Control date, but did not have an account balance, are they 100% vested in the match if they start deferring after the change in control date?

My mother had me and my brother left as beneficiaries on her 401k accounts.

Me and my brother want to set up the distribution where I receive most of the money. It is divided into four accounts so we have some options.

We wanted to have it where I receive all the money and then I just write him a check or give him cash

for what we decide he is to receive. By doing it this way we get he receives what we decide and is much less complicated than if each of us receive half and then gives me money. If we do it this second way we then have to figure the tax effect of what to give me because all of the money is taxable.

We are concerned about the first choice where I get everything and he disclaimers everything. In accordance with irs section 2518 I believe the disclaimer could not have "received benifit". By me giving him money back this might constitute that unless I give him cash or I give it to someone else and they then give him the money.

We are also concerned about gift tax. Would that money received by him by me be subject to that or can that be avoided another another rule of law. As it is not a gift and maybe it can be called something else. thank you in advance for any advice you can offer.

So I've got a doosy here...any help or thoughts would be much appreciated.

We have a QDRO and preliminary determination letter that permits a benefit payment to the AP on the PPT's early retirement age (which was reached as of 2008). It is a VERY large amount, payable in a lump sum. The Order (Texas famly court) and Letter specifically state that payment will be made to the AP, 'care of' the AP's account in the Texas Child Support Office stated in both the order and letter.

The AP called up plan and requested election forms on 1/1/08. She filled them out as payable directly to her in a lump sum. Do to an administrative error, the fact that the letter/order stated that the benefit was payable to the child support office was overlooked.

Now, last week, child support office contacts plan and says "What happened to that payment? We never received it."

How would you approach this? Obviously, we can request that AP repay the plan, but over a year later, this is in my opinion highly unlikely to happen. A second option would be to take the approach that only a former spouse can be the AP, the former spouse was the AP, she should take the responsiblity for filling out the election forms properly and let the child support agency sue her. However, my thinking is that they will be much more likely to sue the company/plan rather than this person, and they do have a letter and order directing payment to be made to them. The final alternative -- which unfortunately seems to be the only viable one - is that the company request payment from AP and to the extent payment is not made, it pays child support office outside of the plan.

I will add one thought: the check is made out to her, but "care of" the agency. Does this help the second alternative suggested above?

Hi,

Could someone please help me with this. Our office uses Datair's Volume Submitter Documents. Through an oversight, we have not had our clients adopt the 2007 required amendments. Am I right in saying that for calendar year clients, we have until the due date of the employer's 2008 corporate return to adopt this 2007 amendment?

Any help would be greatly appreciated.

Thank you!

A client of ours was a participating employer on the parent comapny's 401(k) plan in 2008. I don't know the exact date they ceased deferring under the parent comapny's plan, maybe around August 2008.

They started their own plan effective 10/1/2008.

Because the participants had a prior plan to contribute to, this new plan is like a spin-off or continuation of the plan they were a part of prior to 10/1/2008. Is their 2008 415 limit prorated or will each participant still be tested on their full 2008 contributions - to the old plan and their new one?

I know that if a plan was a true start-up, and had a short plan year, that the limits would be prorated, but I thought it might be different under a spin-off plan.

Thanks in advance.

My company has a self funded health plan. There is no trust. Claims are paid out of general disbursements account of the company. There are more than 100 participants. Is an audit required? Even if so, does anyone really do this? Thanks.

I am not sure if Form 5500 is required for a HSA plan. If an employer wants to offer a HSA plan to their employees, they must have HDHP. If a HDHP is required, then the employer will need to file Form 5500, correct? However, if the HSA is subject to ERISA, then Form 5500 is not required? Most HSA plans have the Employer contributing to the HSA account, so would that indicate that the Employer is sponsoring the plan as well? So combine the aspect of sponsorship and contributions, I am under the impression that the HSA is subject to ERISA. Im confused

If Company A is merging with Company B and Company A has excess plan assets in a funded welfare plan, can those plan assets be used for the benefit of all new employees (those of both Company A and Company B). Unable to find guidance on point...any ideas?

I think I read somewhere that for plan years 2008 and later, both the refund and gains are taxed in the year distributed, even if distributed by 3/15.

Is this correct? I searched, but can't find where I read this (if indeed, I did read it).

Thanks.

Do you need to run the General Test under 401(a)(4) for an Age Weighted profit sharing plan?

Hello,

I have a discussion with a consultant who thinks that segment rates to use for funding are the ones at the beginning of the plan year, wheras, I think that they are the ones as of the valuation date. Hence, for an EOY valuation, it would be that month end/next month segment rates (e.g. for 12/31/2008 Val, it could be 01/01/2009).

What are you using for the segment rates for EOY valuations?

Thanks.

Under Rev Proc 2008-50, a plan that erroneously allowed an otherwise ineligible participant to enter may adopt a retroactive plan amendment. This amendment can alter the eligibility or entry date terms so the employee(s) who entered is made retroactively eligible.

This is an approved correction method in Appendix B, Section 2.07 for plans that already have favorable determination letters. However it is less than clear whether such amendment would need to then be submitted to IRS for a determination letter. Section 6.05(2)(b) seems to indicate that a submission is needed by the end of the next "on-cycle" year (whatever than means). The particular plan that I am working on is a Volume Submitter with a FDL.

Does anyone know for sure whether an IRS submission is required for such an amendment and, if so, what is the deadline? Thanks.

I know I should be better at searching, but I never seem to have much luck with the search engine.

After a hardship withdrawal, pre-tax contributions are suspended for 6 months. Do Roth contributions also need to be stopped? Can someone please direct me to some documentation on this issue? Thank you so much for your help.

2007 plan year, plan had 107 eligible participants. Used the transition rule for 2007. This year plan has 109 eligible participants. Can we use the 80-120 transition rule again or is the audit required? Im thinking the latter rather than the former.