We utilize a loan policy that states a loan can be denied if it extends beyond the Normal Retirement Age set in the plan, which is 65.

The way I understnad that the loan policy is outside the document, and the document states the simple characteristics on the loan but says it will be administered by an outside loan policy.

Is it optional to the plan sponsor that a 65yr old EE can take a loan out. If not, where can I find concrete regulations?

Stretch it further... can a 65yrd old take a principal home loan for 15 years?

In part, ERISA Section 101(j) requires a notice within 30 days after a plan has "become subject to" a restriction described in (1) or (3) of 202(g). The applicable provisions of 202(g) involve shutdown and other contingent benefit restrictions and lumpsum or other accelerated payment distribution restrictions upon bankruptcy, less than 60 and more than 60 but less than 80.

Assume a plan which does not provide for lump sum or other accelerated forms of distribution which is 70% funded. The plan has become subject to the restrictions, but they have no practical effect. Must the notice be given?

What about the inabililty to amend to increase benefits in this funded status? It doesn't seem that restriction must be communicated.

Any thoughts?

Thanks.

Should lost wages that are being paid pursuant to a settlement and subject to withholding be factored into a pension benefit formula?

The x-testing gateway may be 5%-of-pay or if less, 1/3 of the highest percentage-of-pay accrued by an HCE.

The 3%-of-pay 401k safe harbor NEC is counted towards the gateway.

Presuming that rate group and ABP testing will pass, may that 3%-of-pay 401k safe harbor NEC counted towards a gateway alone support accruals for HCEs if none of them accrues more than 9%-of-pay?

There does not appear to be a forum for Sungard Relius users so here is the message I asked for and received from SR:

"The DOL just posted the model for the notice Tuesday. It is 6 pages. We will be releasing a 2009 Sp1 version with the notice around the end of March."

Note, to complete this notice, you first have to complete Schedule H.

At my advanced age, I am reluctantly being push at the EA exams. I'm confused by the calculator requirements. Can anyone suggest a calculator that they would recommend as acceptable?

thank you.

It doesn't appear the proposed reg. on underfunded plans restricts the ability to take a plan loan when the AFTAP is less than 80%, since we are not talking about an annuity start date. But, if the loan defaults, you could have the equivalent of lump sum distribution of a prohibited payment. Thus, it seems inconsistent that you could take a loan.

What, if anything, is being missed here?

I converted all assets in a Rollover IRA account to Roth in September 2008. I recharacterized the entire Roth account back to a Rollover IRA account on 14Jan09. I want to convert this "recharacterized" IRA account again to a Roth account, but I know I must wait 30 days, with the first day starting at 14Jan09. Is the first day I can convert the IRA account to a Roth account, Friday 13Feb09 or is it a day later (which would actually make it Tuesday 17Feb09 given the holidays)? I am told by the trustee that it is a day later, but it looks to me that it should be Friday 13Feb09.

Another twist. When I did the first conversion in Sept08, my trustee, Fidelity, set a flag on the account to pickup later dividends/etc that came in to the Rollover IRA account to move them into the Roth account automatically--some dividends which did come in a week later. However Fidelity forgot to clear that flag. Thus, when I did the recharacterization on 14Jan09, on 15Jan09 (unknown to me), Fidelity automatically converted the day-before recharacterized funds back into the Roth account! I noticed this 11Feb09, notified Fidelity, and they put the funds back into the Rollover IRA account as of 12Feb09. I assume that Fidelity's error will not affect my timings (which is what Fidelity is saying) and that I can now convert this IRA to a Roth on Friday, 13Feb09, the 31st day after 14Jan09, starting with day 1 as 14Jan09. Am I correct in my assumption, or does the trustee's error mean I must wait to a later date to do the conversion to a Roth?

Thanks--unsure

ER established DB SERPs for a few executives. It's top hat and unfunded. One of the benefits of the DB SERP is a death benefit equal to 4x annualized earnings in year executive dies while yet actively employed.

As a hedge against the SERP obligations, the ER purchases COLI policies on these executives. The ER is the owner and the named death beneficiary. The SERP benefits are not keyed in any way to the CVA or death benefits of the policy the ER holds on the life of that executive.

Unbeknownst to the Board of Directors, one of these executives contacts the insurer, signs on behalf of the ER, and effects a change of death beneficiary from ER to that executive's spouse. The executive did not have the corporate authority to do so for the ER, but the insurer nevertheless did this. At the time, the CVA is $180k.

The Board learns of this 6 months later and instructs the insurer to change the death beneficiary back to the ER. The CVA value is then $120k.

Would the amount taxable to the EE as economic benefit be just the 'pure term life' value of having death benefit coverage since, initially it appears, the rights to the CVA never transferred from the ER to the executive or spouse?

If it turns out any rights to the CVA had transferred, would we yet be able to treat the CVA as a non-event, tax speaking, under the idea that since the executive's changing the policy was not authorized, any rights that the insurance company recognized the executive or spouse to have to the CVA were held in a constructive trust for the benefit of the ER (and thus, the only taxable event being the value of the death benefit coverage being the only economic benefit the executive received)?

We have a large plan with participating employers mainly in the newspaper/comercial printing industry. One of the newspaper employers is considering shutting down the printing operations at one of its papers and moving those functions to an unrelated employer (i.e. they may "outsource" the printing of the paper). The employer would thus no longer have an obligation to contribute to the plan under the CBA that covers the employees at that newspaper. The employer would still be obligated to contribute for other employees at several other papers. The employer is asking whether the plan would consider the proposed outsourcing to be a partial withdrawal.

In order for there to be a partial cessation of the employer's contribution obligation under ERISA section 4205, it appears that in addition to the fact that the employer would no longer have an obligation to contribute under one but fewer than all CBAs, the employer (1) would have to continue to perform printing work in the jurisdiction of the CBA, or (2) transfer such work to another location or to another related entity, or (3) continue to perform printing work at the facility. From what has been described to us by the employer, situations 1 and 3 will not apply. No further printing work will be performed in the jurisdiction of the CBA or at the plant. The issue I have is with situation 2. The employer is arguing that it does not apply because the work is being transferred to an unrelated entity. However, the wording of ERISA Section 4205(b)(2)(A)(i) is a little unclear. Could it be interpreted that a transfer of such work "to another location" is all that is required to trigger a partial withdrawal? Any thoughts would be appreciated.

I was just looking at the PPA mortality tables IRS Notice 2008-85 2013 table Unisex 417(e). From Age 115-119 it is 40%...Does this mean that a person who lives to age 114 has a 60% chance of living to 115? Or does it mean a person has a 60% chance of living to age 115 period (which obviously doesnt make much sense at all).

Plan is a Standardized Corbel Prototype 401(k) plan that is top heavy

Because two terminated participants with more than 501 hours are not getting a top heavy allocation (as provided in the document), plan does not pass coverage. It doesn't pass the average benefits test either.

I've read the document, but where does it explain how to fix this without it being a non-standardized fail safe plan? The only place I see it being addressed is in section 4.3(l). Doesn't it say there that the method there is to be used "if this subsection apllies.." ? what if the subsection doesn't apply: Standardized plan ???

The Adoption Agreement provides for HCE to get the top heavy allocation, so I can't not allocate to them.

Do I have the sponsor adopt a 11(g) corrective amendment giving a 3% top heavy to the terminated participant with the latest termination date as it says to do for a non-standardized plan using the fail safe provision? We are still withing the 9 1/2 month correction period.

Do I give the top heavy to everyone...basically calling it a normal 3% profit sharing allocation? Then both those terminated participants will get an allocation, which doesn't make the sponsor very happy.

Could someone help me on this...at least lead me to where on earth I can find this in the document? Am I reading this wrong or what???

1. The roundest knight at King Arthur 's round table was Sir Cumference . He acquired his size from too much pi.

2. I thought I saw an eye doctor on an Alaskan island, but it turned out to be an optical Aleutian .

3. She was only a whiskey maker, but he loved her still.

4. A rubber band pistol was confiscated from algebra class because it was a weapon of math disruption.

5. The butcher backed into the meat grinder and got a little behind in his work.

6. No matter how much you push the envelope, it'll still be stationery.

7. A dog gave birth to puppies near the road and was cited for littering.

8. A grenade thrown into a kitchen in France would result in Linoleum Blownapart.

9. Two silk worms had a race. They ended up in a tie.

10. Time flies like an arrow. Fruit flies like a banana.

11. A hole has been found in the nudist camp wall. The police are looking into it.

12. Atheism is a non-prophet organization.

13. Two hats were hanging on a hat rack in the hallway. One hat said to the other, "You stay here; I'll go on a head."

14. I wondered why the baseball kept getting bigger. Then it hit me.

15. A sign on the lawn at a drug rehab center said: "Keep off the Grass."

16. A small boy swallowed some coins and was taken to a hospital. When his grandmother telephoned to ask how he was, a nurse said, "No change yet."

17. A chicken crossing the road is poultry in motion.

18. The short fortune-teller who escaped from prison was a small medium at large.

19. The man who survived mustard gas and pepper spray is now a seasoned veteran.

20. A backward poet writes inverse.

21. In democracy it's your vote that counts. In feudalism it's your count that votes.

22. When cannibals ate a missionary, they got a taste of religion.

23. Don't join dangerous cults: Practice safe sects!

This arrogant attorney makes the statement that a DB plan can be frozen and thus have no funding requirement.

My understanding, is that while future plan accruals can be frozen, a minimum required contribution calculation must be performed and may still result in a contribution greater than $0.

Seems pretty straightforward to me.

Any comments on the above?

I Wonder Why it is allowable for a non-profit organization to set up a 403B to specifically circumvent the anti-discrimination rules of a 401K. For profit companies don't have this option.

The IRS has indicated that the Section 125 final regulations will come out in the early months of 2009, and will have an effective date of January 1, 2010.

What are employers doing now to comply with the existing proposed regulations? Are employers attempting to comply with the proposed nondiscrimination rules (even though they are not very clear in some parts)? Have employers already restated their cafeteria plan documents to comply with the proposed regulations?

We have a client who has nondiscrimination issues, and it would like to put off compliance until January 1, 2010. However, the client does not want to be the only one out there doing this.

Assume an SAR otherwise meets the criteria for the exclusion from 409A in the -1(b)(5) regulation. Can you still meet the exclusion if the right to time the exercise belongs to the service recipient (rather than the service provider)? I realize that this is not a traditional "SAR," but I cannot find anything in the reg that says it must be the service provider who has the right to time the exercise. What we are trying to do is to give the employer the right to time the payment of phantom equity appreciation, and not necessarily limited to 409A-permitted payment events.

My understanding is that the new law allows account balance participants to avoid an RMD for 2009.

However, my understanding is that DB plan participants must receive an RMD in 2009?

Furthermore, if a DB participant receives a lump sum distribution in 2009 and is over 70 1/2, a portion of such distribution must be received as an RMD and the remainder may be able to be rolled over. Agreed?

Thanks.

We have a 401(k) plan (calendar year w/dual entry dates) that amended the plan for eligibility and vesting. The plan had required 1 year and was amended effective 01/01/09 to require 2 yrs of service for participation.

There is one employee hired 10/01/07 who satisfied the year of service requirement as of 10/01/08. Does this employee enter the plan on 01/01/09 since he had already satisfied the eligibility criteria during the 2008 plan year, or does the new 2 yr service requirement apply to him?

Put another way, which comes first, his entry or the amendment of the service requirement?

Since the plan previously had a graded vesting schedule, we obviously also amended the vesting to 100%. Does this affect anything if we look at participants' right to select which vesting schedule they want?

Yet another question about the safe-harbor non-elective contribution. Clearly at this point owners can't waive for 2008, at least not unde the rules as I understand them so the contribution due for 2008 has to be made, absent backruptcy along with plan termination where the IRS might have some pity for the client. And I think I've found this answer in at lest two threads in my search. You have the dual problems of following written Plan terms and 411 cut back issues.

But can the plan be amended now for 2009 to elimiante the safe-harbor nonelective only for HCEs who are more than 5% owners? That is NHCEs and non-owner-HCEs still get the 3% contribution. Or at worst freeze the 3% contrib for owners through date of amendment but full year 3% for all others? Has anyone seen this before? Probably a better question for the IRS than here but thought I'd try to get some other opinions.

I think the answer is no even though the alternative might be terminating the entire plan which just seems counter to good retirement policy. I know the IRS position is "well you should have done a maybe notice" but it is a bit late for that.