I have a client with a Safe Harbor plan that has a Safe Harbor Match of 100% of the first 4% deferred. The Safe Harbor notices went out timely.

The client (as of yesterday) wants to either suspend the Safe Harbor Match (at least for next year), or amend the plan to a Non Safe Harbor plan beginning 1/1/09. (They haven't decided yet.) Can they do this so late in the game for the plan year beginning 1/1/09? If so, what requirements/notices would be required? (I assume that if it is allowed and they are suspending, a notice to suspend is required, but anything else? I assume that if it is allowed and they are amending, docs need to be done before 12/31, but anything else?)

Thanks for all your help!

In soliciting opinions here. My client had a plan in which they had late and/or non remitted deferrals. they put all the money in the plan plus earnings. is it necessary to go forward with the DOL program? the plan has been terminated and the sponsor is no longer a going concern. this would be the only thing holding up final distributions.

Under any circumstances, can an employee "flex" a spouse's (not an employee) insurance premium which is currently under COBRA? Doesn't makes sense to me why they would want to do that as the spouse is eligible for coverage under the employee's company insurance but nevertheless, the question remains.

Church plans are not my area of expertise, so I have a few questions. I have a start up, which only wants to include the 2 full time pastors and not include the 3 other employees who work 20 hours or less per week. Can this be done? I wouldn't think so if we set up a 401(k), but what about a 403(b)? If we can do this under a 403(b), would we be required to have a plan document? Any suggestions?

I'm reviewing a governmental plan for takeover and was provided a New England Prototype document that was executed in 1996. The Opinion Letter dates from 1990. We would like to amend and restate the plan using our EGTRRA Volume Submitter Plan. The client claims this is the most recent plan document.

Although the prototype subjects the plan unnecessarily to some ERISA requirements that are normally exempt for governmentals, I'm questioning if the plan document should have been updated through the years. Are the compliance rules for plan docs the same as they are non-governmental plans? Thanks.

Form 5500 instructions don't seem to help on this one.

Calendar year DB plan with under 100 participants. 2007 5500 filed by July 31, 2008. 2008 PBGC due 4/30/2009 and not yet filed. Client recently informed that on Sept 1, 2008 made significant contribution. If this contribution is counted for 2007, then no variable premium would be payable for 2008; otherwise, variable premium payable.

Question: Is it still permissible to amend 2007 5500 and Schedules B and I to include September 1 contribution? If so, will signing the schedule B on 12/26/2008 cause a rejection? If so, what are the legal alternatives (e.g., sign original date and attach explanation)? How late can a 5500 be amended? I know that upon IRS audit we've submitted amended 5500s long after the filing due date.

Hard to believe I've never done this before but I've never done this before!

My client maintains a cross-tested plan with a 401k feature (no match). There is very low participation in the 401k feature (approx. 12 participants deferring out of 100+ participants). The client recently informed me that deferrals have not been taken out of bonus payments since 401k was added to the plan several years ago. The administrator or accounting firm has asked that the plan be amended to provide that deferrals not be made with respect to bonus payments. Note that most bonus payments are made to HCEs but that some are made to NHCEs.

Is there anything which would prohibit adding such a provision?

Your input and help is appreciated.

My husband recently passed, I was noted as Bene on the Life Insurance policy but when it came to his Pension, I was not the Bene and they would not tell me who was or if anyone was named at all. I have been reading the U.S. Department of Labor Laws, but with all the legal wording, it's hard to understand. I was told by other employees that a letter was sent out for them to update their information because the employer had changed Service Provider for their Pension plan. This switch was made months after we were married. Knowing my husband and the many hours he puts in, he forgot to update this information. Is it safe to say that when a company changes service providers, the information from the old service provider should not have gone over to the new service provider? Because the plan administrator will not give me any information, only that "I am not listed as Bene", can I still file a claim or do I need to get a lawyer?

GoneToSoon

My husband recently died and in gathering papers, I came across his Divorce Decree from his first wife. The value of his 401K, as of date of trial, would be given when available. It also states, "The 401K shall be split via "QDRO" and the Wife shall be responsible for preparing the QDRO and submitting to the Husband's employer. It has been over 2 years, there has been nothing filed with the courts nor had we received anything from the plan administrator. What could possibly happen now, once I file my papers with the plan administrator?

GoneToSoon

I know that you cannot do this, but can anyone give a precise citation?

If an employer has different plans (the same employer, I must specify); say for example, a 401(k) plan for unassociated-with-the-union employees, a different plan for union employees, and a defined benefit plan (which serves to augment the 401(k) plan), how does that affect the determination of proper coverage?

If the asset statements for a retirement plan do not have the assets in the name of the plan, what happens? What corrective actions must take place?

As I understand it, it remains possible to terminate a plan, then restate it and amend it for the various laws, so as to avoid later problems regarding tainted funds when one wants to rollover the amounts from the plan. Has anyone ever encountered a case of this happening?

Are Catch up contributions taken into account when computing the Average Benefit % Test?

In October 2007 the IRS issued a ruling and two notices that had many people believing that 419 plans were no longer an option. While true for a couple of designs, this is not true for those plans that are deigned within the IRS rules. This article explains what the ruling and notices say, what is left and how to recognize properly designed plans.

DSN_419_article_FINAL_GALLEY.pdf

I have a Profit-Sharing Plan in which the employer has been making annual contributions = 100% of compensation and deducting the full amount on its tax return - basically ignoring 404(a)(3) which states that deductions are limited to 25% of compensation.

Has anyone experienced correcting this type of failure before through VCP or otherwise?

There is a technical operational failure (failure to follow plan document) because the plan document states that the employer contribution can not exceed the deductible amount. However, there is no example of this type of failure in the Rev Proc so I am not sure what the proposed correction would be.

I would like the proposed correction to be something like this: allow the employer to take back the contributions in excess of the deductible limit without violating the excess benefit rule and waive (or compromise in some way) the excise taxes (which are significant).

Any ideas?

Is there any guidance on what funds the forfeiture account should be invested in. Some of my clients like money market, some leave them in the funds the participant has them in, and some want them in the QDIA? I can't find anything on this.

I've been searching through the Regulations and have not found the answer I'm looking for...Can anyone confirm that the Regulations place the responsibility to amend the plan to come into compliance with 409A on the plan sponsor? Thank you.

I am submitting a determination letter request under Cycle C for an S Corp ESOP. What there a deadline by which the plan had to be amended for the final nondiscrimination regulations under 409(p)? If so, do you have a cite?

A participant failed to take a RMD for 2007.

We just took over the Plan from another Recordkeeper.

Now I am trying to calculate the 2008 RMD, and need to get the 12/31/2007 Account Market Value in order to do the 2008 RMD calculation.

Since the 2007 RMD was never done, the 12/31/2007 Account Market Value will still include the 2007 RMD amount that was not distributed.

My question is do I need to deduct the 2007 RMD amount that was never taken from the 12/31/2007 Account Market Value in order to get the true 12/31/2007 Account Market Value to calculate the 2008 RMD?